ST - Church of South India's Central Diocese is neither an assessee nor a person
THE Commissioner of Service Tax passed an order clamping liability to pay service tax, interest and penalties on the Karnataka Central Diocese of the Church of South India Trust Association (CSITA) on the premise that the Diocese:
1. Was Trust Association registered under the Companies Act, 1913 owning immovable property in Bangalore city;
2. Were renting out the space in their properties for erection of hoardings and letting out, office/commercial premises under the category of 'Sale of Space or Time for Advertisement and Renting of Immovable Property Services'.
The Counsel pleaded that the Karnataka Central Diocese is a Unit and is not a separate legal entity; that Karnataka Central Diocese is neither an assessee nor a person for the purpose of service tax. The Counsel for Revenue does not oppose the submission that petitioner is not a legal entity but serves as a Unit of the CSITA and that if at all any proceeding is to be initiated, it is against CSITA.
The Karnataka High Court in a recent judgement quashed the Commissioner's order. The Court however held that, if the Finance Act, 1994 in respect of the service tax applies to Church of South India Trust Association which is the organization which owns and holds immovable property, it is open for the respondent-revenue to apply its mind before taking any action for the purpose of issue of proposition notice.