PURSHOTTAM DAS MALPANI Vs. UNION OF INDIA

JUDGEMENT

(1.) Since common questions of law and facts are involved in these writ applications, they are being decided by this common order. The facts are being noted from D.B. Civil Writ Petition No. 16660/2011 Purshottam Das Malpani v. Union of India. The petitioner has questioned the levy of service tax which is being realized by the Union of India under the provisions of Section 65(105)(zzzz), 65(90a) read with section 77 of the Finance Act, 2010 (hereinafter referred to as "the Act of 2010") and prayed to declare that the said provisions are illegal, arbitrary and ultra vires the Constitution and that renting of "immovable property is not a service; prayer has also been made to declare the notification no. 23/2007, ST dated 22.5.2007 as amended to be illegal, arbitrary and ultra vires the Finance Act, 1994 (hereinafter referred to as "the Act of 1994"); prayer has further been made to declare the circular dated 26.2.2010 qua renting of immovable property as illegal and ultra vires the Act of 1994 and Constitution of India; prayer has also been made to quash the circular dated 20.9.2011.

(2.) It is averred in the petition that the petitioner is engaged in renting/leasing warehouses and storage space for agro and other products. The Act of 1994 was introduced by the Union of India under which service tax on few commodities was levied and by the year 2007, more than 106 taxable services were brought in the net of service tax which was in the nature of indirect tax. Vide Act of 2010 read with notification no. 23/2007 ST dated 22.5.2007, levy of service tax was introduced on renting of property service by virtue of clause 65(105)(zzzz) read with section 65(90a) defining taxable service w.e.f. 1.6.2.2007. The petitioner was allotted service tax registration on 22.10.2011 in ST-2.

(3.) It is further averred in the petition that tax on renting of immovable property was challenged in various High Courts through out India. In Home Solution Retail India Ltd. v. Union of India,2009 20 STT 129 the Division Bench of Delhi High Court has struck down the levy being unconstitutional and ultra vires the provisions of the Act of 1994 on the ground that no value addition was involved in the transaction of renting out of the immovable property. Against the DB decision of the Delhi High Court, SLP was preferred before the Supreme Court and' it was admitted, but no interim stay was granted.