TaxTMI 
TaxTMI 
2014 (5) TMI 1226
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....f lease dated September 1, 2012 (hereafter the said deed) was executed by and between the petitioner and the respondents. One of the terms and conditions of the said deed provided as follows: 6. The lessor/lessors shall pay all rates, taxes, assessment, charges and other outgoings whatsoever of every description which under the statues are primarily leviable upon the lessor and shall keep the premises free from all encumbrances and interference in this behalf. Rates and taxes primarily leviable upon the occupier shall be paid by the Government. 2. Simultaneously with the execution of the said deed, the respondents were put into possession of the leasehold space. From time to time bills were raised by the first petitioner on the respondents towards lease rent inclusive of the component of service tax. While the respondents paid the lease rent in respect of the leasehold space, the service tax was not paid. Requests and reminders followed at the end of the first petitioner to which the respondents replied that "the issue of payment of service tax is under consideration of competent Authority of Government of India, and necessary action will be taken after receipt of their....
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....ring as sanctioned by the GOI are as follows: (a) The monthly hiring charges @ Rs. 42/- per sq. ft. will be Rs. 16,34,967.00 (Rupees Sixteen Lakh Thirty Four Thousand Nine Hundred Sixty Seven only). (b) There will be no annual escalation during the lease period. (c) The registration charges, stamp duty, service tax etc (if applicable) is the liability of the lessee. (d) The maintenance of the building and associated fittings will be the liability of to M/s. Bengal Shrachi Housing Development Ltd. (e) The local taxes etc. if any will be paid by the M/s. Bengal Shrachi Housing Development Ltd (f). The electricity charges as per consumption will be paid by the Coast Guard to M/s. Bengal Shrachi Housing Development Ltd. (g) Other terms and conditions as per letter of offer. According to him, the respondents having agreed to bear service charge and the same being their liability in terms of the extant law (the Finance Act 1994), there could be no escape from the conclusion that they are to bear the same. 5. Unreported decisions of the Delhi High Court dated October 20, 2010 and the Allahabad High Court dated January 16....
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.... question of fact; rather the point involved is simple,-who between the first petitioner and the respondents, in terms of the agreement between the parties, is liable to bear the service tax. 9. In Pearey Lal Bhawan Association (supra), one of the issues that fell for consideration of the Delhi High Court was, "on whom does the incidence of taxation fall, in this case, having regard to the materials and documents on the record;". Relevant passages from the decision are quoted below: 12. The controversy requiring decision by the Court is narrow and limited. It is whether the burden of service tax, levied on the service or facility of leasing (of the suit premises) should be borne by the lessor (i.e. the service provider) or the lessee (i.e. the defendant, user). There is no dispute that the parties did not visualize that this kind of a levy would be made in respect of lease, or rental of commercial properties; it is also undisputed that the levy was made effective in 2007, after the parties had entered into the agreement. The defendant denies liability to pay, submitting that the conditions in the contract clearly stipulate that all taxes, etc. are to be borne by the pla....
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....f the relevant statute, we find that service tax is statutory liability. It is a tax which is required to be collected by the service provider from the person to whom service is provided, and thereafter to be deposited with government treasury within the prescribed time. 6. Thus essentially the statute is being imposing the tax upon the person to whom service is being provided, and the service provider is merely a collecting agency. 7. In that view of the matter, the writ petition is allowed. The respondent no. 2 is directed to make reimbursement of service tax to the petitioner without further delay. 11. I share the views of the Delhi High Court and the Allahabad High Court extracted supra. 12. Turning to the facts of the present case, it appears that clause 6 extracted supra delineated the respective obligations of the lessor and the lessees. The parties agreed that the rates and taxes primarily leviable upon the occupier would be paid by the Government. That the respondents were not oblivious of their obligation to bear service charge is reflected from the letter dated April 30, 2012. Although the said deed does not specifically refer to service tax, the ....