Renting of Immovable Property - AP High Court Stays
DDT had brought you this story yesterday. The High Court observed,
The generic contentions urged on behalf of the petitioner, are eminently arguable though we are not prima facie satisfied to an extent warranting interdiction of the operation of the provisions of Section 65(105)(zzzz) in so far as their prospective application is concerned. The challenge as to the retrospectivity of the provisions, in our considered view and prima facie is on more substantial grounds.
On the prima facie analysis above, the respondents are directed, pending further orders, not to initiate any coercive steps for recovery of the service tax on the renting of immovable property by the petitioners, on the basis of the provisions of Section 65(105)( zzzz) as amended by the Finance Act, 2010, for the period 01/06/2007 to 01/04/2010. Petitioner shall, however be, liable to pay the applicable service tax as per the provisions of Section 65(105), for the period subsequent to 01/04/2010 but subject to the result of the writ petition.
Now what is the sanctity of 01/04/2010?
The High Court seems to have basically stayed the retrospectivity of the tax and that could be the reason for the comment that the petitioner is liable to pay the tax after 01/04/2010.
But when the tax itself is not valid, will its retrospective implementation be valid?
Government seems to be determined to levy this tax and if the government is determined, it will have its way – courts and laws notwithstanding.
Ultimately they have to pay the tax – with interest!
Click here for the High Court Order.