Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (11) TMI 493 - MADRAS HIGH COURT

2016 (11) TMI 493 - MADRAS HIGH COURT - TMI - Challenge to the order confirming the demand of service tax - SCN notice issued in the name of property and not in the name of assessee - Renting of Immovable Property Service - jurisdiction of respondent to pass the order - Held that: - the issue involved in the instant case revolves upon disputed and complicated questions of fact and the plea of jurisdiction raised by the petitioner essentially involves adjudication into facts and it is not purely .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rty is granted to the petitioner to file an appeal before the Commissioner (Appeals-I), Coimbatore and while entertaining the appeal and computing the period of limitation, the period during which this writ petition was pending i.e. from 26.08.2016 to till the date of receipt of the certified copy of this order shall stand excluded - petition dismissed - decided against petitioner. - W. P. No. 30142 of 2016 W. M. P. Nos. 26110 and 31737 of 2016 - Dated:- 2-11-2016 - The Hon'ble Mr. Justice T .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Property Service under Section 73(2) of Chapter V of Finance Act, 1994 (hereinafter referred to as the Act ); ordering recovery of appropriate interest and imposing penalty. As against the impugned order, the petitioner has an appellate remedy of filing an appeal before the Commissioner (Appeals-I), Coimbatore on payment of 7.5% of the service tax demanded. However, the petitioner has not availed such remedy and has filed this writ petition challenging the order in original. 2. Mr.R.Janakiraman, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is on the service provider and not on the property and hence each of the seven co-owners have to be considered as service providers for the purpose of invoking the provisions of the Act. Further it is submitted that in the hands of the co-owners service tax cannot be levied as the individual recipients are within the threshold limit and there is no liability under the Act. Further there was no definition of person under the Finance Act during the relevant period and service tax can be levied onl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and a fresh notice was issued on 06.04.2015 which is barred by time. Thus the contention of the petitioner is that treating all the seven co-owners as one entity for the purpose of levy of service tax on the rental income is without jurisdiction and the petitioner is entitled to challenge the impugned proceedings by way of this writ petition and when the authority is acting without jurisdiction, the petitioner cannot be subjected to lengthy proceedings and unnecessary harassment and this Court c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rishnan, learned Senior Standing Counsel appearing for the respondent raised a preliminary objection regarding the maintainability of the writ petition on the ground that the petitioner has not availed the appellate remedy available under the Act. Without prejudice to such submission, it is submitted that the petitioner had earlier filed a writ petition before this Court in W.P.No.748 of 2009 challenging the constitutional validity of the enactment and the present impugned proceedings have been .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

niga Valagam is co-owned by seven persons who have joined together and constructed the building. 5. The seven co-owners have jointly leased various portions of the property to different persons and the rent is paid by the tenants to all the seven co-owners jointly. The rent so received in consolidated form is thereafter distributed among the seven co-owners in the agreed ratio. Therefore it is submitted that this does not mean that each of the seven co-owners are separately providing the service .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is treated as an assessee, whereas, the notice has not only been issued to the AOP, namely, VSA Vaniga Valagam but also to each of the co-owners separately as co-owners are jointly and severally liable to pay tax liability of the AOP. Further it is submitted that the petitioner is estopped from raising such contention since they themselves filed the earlier writ petition in the name of VSA Vaniga Valagam in W.P.No.748 of 2009. That apart, the petitioner themselves have admitted in their reply d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hemselves in the agreed ratio. Therefore, it does not mean that the co-owners have individually provided the service of renting of immovable property. In fact the seven co-owners have appointed a Power Agent to act on their behalf to enter into lease agreements, etc. Thus the service provided by the seven co-owners by renting of immovable property is an indivisible service in the name of VSA Vaniga Valagam which is a joint entity of seven co-owners. With regard to the position prior to July 2012 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ggrieved they should file an appeal before the Appellate Authority as provided under the Act. 7. In reply, the learned counsel for the petitioner submitted that the notice was sent only to the property VSA Vaniga Valagam and a copy of the notice has been marked to the co-owners and the petitioner had sent a reply. Even earlier, the petitioner when they filed a writ petition in W.P.No.748 of 2009 they contended that they are not an assessable entity in spite of that show cause notice dated 06.04. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

.04.2015 the petitioner stated that The Assessee is an AOP consisting of co-owners. But while filing an additional written submissions on 14.03.2016 the petitioner took a different stand that there is no AOP. Further it is submitted that the Income Tax Department has accepted that there is no AOP and that the co-owners do not satisfy conditions precedent to constitute a AOP. It is further submitted that reference to the General Clauses Act is untenable since the enactment under which the petitio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ns of the learned counsel appearing on either side and carefully perused the materials placed on record. 9. The petitioner seeks to justify their action in invoking extraordinary jurisdiction of this Court and challenging the order in original by filing this writ petition alleging that the respondent has no jurisdiction to pass the impugned order. The plea of lack of jurisdiction is not raised on the jurisdiction of the respondent in exercise of his powers under the provisions of the Finance Act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and if done so, they fall within the threshold limit and not liable to pay service tax. 10. This is the second time the petitioner is before this Court. Earlier this petitioner filed W.P.No.748 of 2009 wherein they have sought for a writ of Declaration to declare the provision of Clause (90a) of Section 65 and Sub-Clause (zzzz) to Clause 105 of Section 65 of the Finance Act inserted by Finance Act, 2005 with effect from 01.06.2007 as ultra vires and violative of Article 14, 19(1) and 265 of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

writ petition, an order of stay was in force. After dismissal of the writ petition, notice dated 06.04.2015 was issued to VSA Vaniga Valagam and the seven co-owners, in all eight noticeeses. 11. At this juncture, it has to be pointed out that in the earlier writ petition the petitioner was VSA Vaniga Valagam, Veerapandiayar Nagar, Salem 636 004 and in the instant writ petition the petitioner is shown as VSA Vaniga Valagam represented by its co-owner A.Rajendran, Veerapandiayar Nagar, Salem 636 0 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

co-noticees. Therefore to that extent the contention raised by the petitioner deserves to be rejected. The question therefore to be decided is whether the Renting of Immovable Property Service is rendered by VSA Vaniga Valagam which is owned by seven persons stated to be represented by a Power Agent who has leased out the property, income is collected consolidatedly and shared among the co-owners at the agreed ratio in terms of the Family Arrangement Deed dated 15.07.2005. 12. In the counter af .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eir reply dated 05.05.2015 admitted that the assessee is an AOP consisting of seven co-owners. The petitioner now seeks to wriggle out all such stand by referring to additional written submissions made before the respondent on 14.03.2016. 13. It is highly doubtful as to whether the petitioner could wriggle out from the stand taken in the reply dated 05.05.2015. In respect of the income received jointly, the assessment of the property tax have done under three assessments and all other factors ha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version