2023 (5) TMI 723

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....carpet area of 30700 sq. ft. which he has leased to the Life Insurance Corporation of India (represented by respondents No. 4 to 6) in this Writ Petition, under a registered lease deed dated 18.11.2010 (a copy of which is produced as Annexure-A to the writ petition). Under the terms of the lease, LIC was required to pay Rs. 2,45,600/- per month as rent. 2. It is the case of the petitioner that he was obliged to pay the service tax by virtue of the provisions of Chapter V of Finance Act No. 1994. It is his contention that he was merely the service provider and since the tax is payable by the person, who had availed the services i.e., the tenant, his only obligation, in law, was to collect the tax and remit it to the Department. It is his ca....

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....as stipulated in clause-III of the agreement. The rent is inclusive of Municipal and all other taxes as are assessed and levied as on date without any deduction except Income Tax at source under section 194-I (Wherever applicable), the rent for each month is to be paid before the 10th day of subsequent month subject to the observance and performance of the covenants on the part of the Lessees and the conditions herein contained. (emphasis supplied) 5. As could be seen from Clause V, it is specifically stated that rent was inclusive of municipal as well as other taxes as are assessed and levied without any reduction of income tax at source under Section 194-I. Thus, the rent was inclusive of the municipal and other taxes which are asses....

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.... above, is a separate tax levied on the value of the services availed and not on the property. It is, therefore, clear that the endorsements issued by the LIC refusing to pay the service tax paid by the petitioner are illegal and cannot be sustained. 9. Learned counsel for the LIC, however, sought to rely upon the judgment rendered by the Hon'ble Supreme Court in the case of Union of India and Others v. Bengal Shrachi Housing Development Limited and Another, reported in 2018(1) Supreme Court Cases 311 to contend that it is the obligation of the service provider to pay the tax. The Hon'ble Supreme Court in paragraph 18 has stated as follows - "18. It is thus clear, on a conspectus of the authorities of this Court, that service tax is an i....