Service Tax – Renting of Immovable Property - Litigation Continues - Scene Shifts to SC
THE litigation never seems to be ending – after all it's a thousand Crore issue! Netizens will recollect that the Bombay High Court in Retailers Association of India vs Union of India – , has upheld the levy of Service Tax on renting of immovable property, including the retrospective amendment. The judgement was delivered on 4 th August 2011 and immediately after the judgement was delivered, the Counsel for the petitioners requested that the interim orders may be continued for a reasonable period. The High Court ordered that the interim orders will continue to remain in operation for four weeks. The High Court later extended this stay till 30 th September 2011. So they had to get a stay from the Supreme Court before 30 th September 2011 and it seems they have succeeded. It may be noted that the High Courts of Punjab and Haryana, Karnataka, Orissa apart from Bombay and of course the Larger bench of the Delhi High Court upheld the levy and the retrospective amendment. The case is listed for 14 th October in the Supreme Court.
In the most unlikely event of the Supreme Court quashing the levy, the Government will through Parliament bring in another retrospective amendment and all the litigants in the Supreme Court will have to pay the tax with interest and a possible penalty. Government has scant respect for the interpretations of the Supreme Court and the Parliament's power to impose tax retrospectively is well recognised. In matters relating to tax, it is not the Supreme Court which is the ultimately authority, but an Under Secretary in the Board – he has the powers to undo the orders of the Supreme Court. TIOL has said this many times but it has fallen on deaf ears in the trade circles.