2025 (6) TMI 1270

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....ord and tenants. 2. O.S.No.5568 of 2017 filed by the landlord for recovery of the service tax with interest paid by the plaintiff/landlord for renting his premises to the defendants/tenants. Relying on the Hon'ble Supreme Court Judgment rendered in Union of India -vs- Bengal Sharchi Housing Dev Ltd. Reported in [(2018 (1) SCC 311)], the Trial Court dismissed the suit holding that, the plaintiff/landlord, who is the service provider, cannot get reimbursement of the tax paid from the service receiver, in the absence of specific agreement to that effect. 3. Aggrieved by the dismissal of the suit, the present appeal suit is filed by the plaintiff/landlord on the following grounds: In the proceeding initiated for fixation of fair rent, th....

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....r, there must be expressed agreement between the landlord and tenant that the tenant, who is th service receiver, will pay the service tax. 5. The trial Court after due consideration of the provisions in the Financial Act, 1994 and the judgment of the Hon'ble Supreme Court has rightly held that renting a premises for commercial purpose is a taxable service under Section 65 (90-a) and (105). Section 68 of the Finance Act, 1994 clearly fix the liability for payment of service tax only on the service provider. The respondents in terms of the compromise vacated the premises. Either during th negotiation for compromise nor during vacating the premises, the landlord claimed service tax. The terms of the compromise entered between the parties....

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....e Companies -vs- Union of India and otheres reported in [2011(2) SCC 352] and Union of India -vs- Bengal Shrachi Housing Developmnt Limited and another reported [2018(1) SCC 311], the circumstances under which the duty of taxpayer be passed on to the recipient of the service. 9. In all these Judgments, the Apex Court had unequivocally held that service tax is an indirect tax, meaning thereby that the said tax can be passed on by the service provider to the recipient of the service. There is no legal impediment for the parties by agreement pass on the liability. In Bengal Shrachi case cited above and relied by the respondents also, the Hon'ble Supreme Court after explaining the expressions like "taxable persons", " taxable event" and " tax ....

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.... not envisaged about referring it. The covenant regarding payment of charges is found in clause (4) which reads as below:- The Lessee shall pay all charges, payable for consumption of electricity and water charges payable to the concerned authorities and all other outgoings for its business. 12. According to the Learned Counsel for the Appellant, the lease deed dated 22.05.2003 expired on 21.05.2008 due to efflux of time the respondents continue to occupy the premises. The litigation between them for fixation of fair rent was pending when levy of service tax on rent came into force with effect from 01.06.2007. In a similar factual circumstances, the Delhi High Court in Meattles Pvt. Ltd. case (citedsupra), while considering the expressio....