Supreme Court stays service tax liability on Bank for renting property, directs deposit of pending tax amount.

The Supreme Court stayed the High Court judgment imposing service tax liability on a Bank (tenant) for renting immovable property for commercial use. The petitioner argued that the tax burden should be on the landlord, not the Bank, which already pays service tax for its services. An interim measure required the Bank to furnish a bank guarantee. The Supreme Court issued notice, stayed the High Court judgment, and directed the deposit of Rs. 27,87,374 for the service tax pending further proceedings.

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Issues involved: Liability of service tax on renting of immovable property for commercial purpose, reliance on previous judgment, interim measure of furnishing bank guarantee, stay on High Court judgment.

The Supreme Court heard the petitioner's counsel who argued that the High Court wrongly imposed the liability of service tax on the Bank (tenant) instead of the landlord who provided the service. The petitioner contended that the Bank is already paying service tax for services provided to their customers. The counsel also pointed out the error in the High Court's reliance on a previous judgment which was under challenge in the Supreme Court.

In response to the pending case, an interim measure was taken where the appellant (tenant) was directed to provide a bank guarantee for the specified amount, leading to a stay on the High Court's judgment. The Supreme Court issued notice returnable in six weeks and subject to the deposit of the quantified sum of Rs. 27,87,374 for the entire service tax, the operation of the High Court judgment was stayed.

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