Renting- Many cases tossed out as tenants are not assessees and hence no locus- standi - Karnataka High Court
AN advocate who is closely connected with this case, informs us:
Yesterday, the 14th of March, the High Court of Karnataka was pleased to dismiss WP No. 30344/2010 filed by Devayani International Pvt Ltd, challenging the charge of service tax on renting of immovable property. In this petition, besides UOI, CBEC, Commissioner of Service Tax and the adjudicating authority, all the land lords or lessors had also been impleaded as respondents, and ad interim ex parte stay obtained against recovery of service tax from the tenants.
The dismissal was on the ground of maintainability. Since Devayani International was a tenant / lessee, it was not a service tax assessee. Not being a service tax assessee, it cannot have any grievance against taxability of renting of immovable property. Consequently, it could not maintain the petition challenging for lack of locus standi . Essentially, the petition was perceived as one directed against the land lords or lessors, trying to prevent them from collecting service tax in terms of contract between the parties. Proper remedy for the tenants and lessees in such case was to approach the Civil Court and pray for injunction against land lord / lessor from collecting service tax on rental.
On 31.3.2011, another batch of writ petitions will be posted for final disposal before the same Single Judge. Barring a few exceptions, most of them are filed by tenants. Now that a precedent has been created, most of these petitions are also liable to be dismissed as not maintainable. This would not affect the right of land lords and lessors to maintain the petition.
Delhi High Court too is slated to hear the arguments on 21st of March, when Mr. Rakesh Chitkara is to continue arguments, probably followed by ASG Mr. Chandiok and Sr. Govt. Counsel Mr. Mukesh Anand .