Srinivasa Enterprises vs Jt. Commissioner of Commercial Taxes

B.S. Patil, J—Learned Additional Government Advocate is directed to take notice for the 1st respondent. Shri N.R. Bhaskar, learned Central Government Standing Counsel is directed to take notice for the 2nd respondent. A short question arises for consideration in this writ petition. Dispute is essentially between petitioner and 1st respondent. Matter pertains to payment of service tax by the land lord - petitioner for and on behalf of the tenant - 1st respondent for the period from June 2007 to February 2012 in a sum of Rs. 1,04,98,167/-. According to petitioner, the said amount of service tax was periodically paid on behalf of tenant - 1st respondent by petitioner - land owner to the 2nd respondent. It is urged that both petitioner and 1st respondent were under the impression that even though the premises was rented in favour of a Government Department, namely, to house the Office of the Joint Commissioner of Commercial Taxes, service tax was payable on the services received by the 1st respondent. In fact 1st respondent has also not objected for the same.

Indeed, Office of the Commissioner of Service Tax through the Deputy Commissioner has issued a clarification on 15-11-2012 addressed to the Joint Commissioner, Department of Commercial Taxes, Peenya Industrial Area, Bangalore, regarding the applicability of service tax on buildings rented out to Government Organization with effect from 1-7-2012. It is thus clear that as per the said clarification, for the earlier period prior to 1-7-2012, service tax was not payable if the building was rented to house a Government Organisation. It is in this background, based on the communication received from the Office of the Commissioner of Service Tax, Bangalore, 1st respondent - Joint Commissioner of Commercial Taxes has issued a letter dated 21-12-2012 informing the petitioner that service tax was wrongly deducted by the petitioner from June 2007 to February 2012 and paid to the concerned authorities, therefore, the said amount had to be withheld from out of arrears of rent payable to the petitioner and that petitioner would be at liberty to seek refund of the amount from the competent authority to whom the service tax was wrongly paid.

According to the learned counsel for petitioner, service tax has been paid not by petitioner but by 1st respondent through the petitioner and therefore, it is for the 1st respondent to seek refund of the amount and hence, there is no justification for the 1st respondent to issue the impugned letter dated 21-12-2012.

Learned Additional Government Advocate submits that as the amount is paid by the petitioner-land owner, petitioner shall be entitled to seek refund of the same and that 1st respondent would co-operate and address necessary communication to the 2nd respondent to enable the petitioner to get the refund of the amount which has been wrongly paid towards service tax.

In the light of the above submission made by the 1st respondent, I am of the view that it is not necessary to consider the challenge made to Annexure-D letter by going into the contentions advanced by the learned counsel for petitioner. Suffice to observe that both petitioner and 1st respondent shall make appropriate representation addressed to the 2nd respondent bringing to the notice of the 2nd respondent the service tax that has been wrongly paid, whereupon the 2nd respondent shall consider the same and pass appropriate orders and refund the amount, in case it is found that service tax for the period from June 2007 to February 2012 was wrongly paid.

Petitioner and 1st respondent are permitted to make necessary representation/application within two weeks from the date of receipt of a copy of this order, whereupon the 2nd respondent shall consider the same and pass appropriate orders and in case it is found that service tax was wrongly paid, steps shall be taken by 2nd respondent to refund the same as expeditiously as possible, at any rate within a period of two months from the date of receipt of the application. Learned Additional Government Advocate is permitted to file memo of appearance for the 1st respondent within two weeks. Shri N.R. Bhaskar, learned Central Government Standing Counsel is permitted to file vakalath for the 2nd respondent within two weeks.