MEATTLES PVT. LTD Vs. HDFC BANK LIMITED

JUDGEMENT

(1.) This is a suit for declaration, recovery of money and injunction. The plaintiff had let out premises measuring 2700 sq. ft. in property bearing No.3909- 3912 Hamilton Road, Mori Gate, Kashmere Gate, Delhi to the defendant vide registered lease deed dated 25.11.2004. The lease expired by efflux of time and now the defendant continues to occupy the premises as a month to month tenant. The renting of immovable property for the commercial purpose was subjected to Service tax by inserting sub-Section 90(a) in Section 65 Chapter V of the Finance Act , vide Section 135 of Finance Act 2007. As a result, Service tax became payable with effect from 1.6.2007. The plaintiff called upon the defendant to pay arrears of Service tax. The defendant, however, took the stand that it is not liable to pay Service tax to the plaintiff. Accordingly, the plaintiff has sought recovery of Rs.14,08,553/- towards arrears of Service tax for the period June, 2007 to January, 2012. It has also claimed interest on the aforesaid amount @ 18% per annum amounting to Rs.6,07,390/-, thereby making a total sum of Rs.20,15,943/-. The plaintiff has also sought a declaration to the effect that the defendant is liable to pay service tax on the lease rent. A mandatory injunction has also been sought requiring the defendant to pay Service tax on the lease rent.

(2.) The defendant has contested the suit and has denied any liability to pay service tax. It is further alleged that in terms of the lease deed dated 25.11.2004, the liability to pay service tax is of the lessor.

(3.) The following issues were framed on the pleading of the parties on 26.9.2012:-