Mr. BN Gururaj is a dangerous man. He got the petition filed by Devyani International (Owner of largest branch of food chains in India) dismissed in the Karnataka High Court.
He argued on behalf of landlords. Next time, the litigants must ensure that he represents them in the Court than the other side.
What I do not understand is what was the need for the landlords to argue the case ? The challenge was primarily against the levy and its constitutionality and whether it can be charaterised at all as a service.
The landlords were expected to have no adversarial position in the matter.
But fact remains that apart from the Govt. who was unable to collect tax owing to stay, worst sufferers were the landlords.
No one knew whether they at all will ever be able to collect the tax from tenants ? And how ? The Govt. can wield a stick and impose heavy penalties. Landlords will take years to recover it from defaulting and dishonest tenants, if at all they win after great expense.
Landlords must cheer this judgement. They had a deadly lawyer representing them who sounded a death knell to tenants mischief of paying neither to the Govt. nor to the landlords.
But are the tenants so mean ?
If most of the retailers (malls / multiplexes) can barely utilise the CENVAT credit because the system itself is faulty, can we blame them from crying ?
Kind regards,
Rebecca Andrews
--- On Mon, 14/3/11, Gururaj BN <gururaj.bn@gmail.com> wrote:
From: Gururaj BN <gururaj.bn@gmail.com>
Subject: WP challenging service tax on renting meet ignominious end!
To: "Sivakumar S" <sivakumar@s3solutions.in>, "Rebecca Andrews" <rebecca.andrews88@yahoo.in>
Date: Monday, 14 March, 2011, 12:41 AM
Today, Hon'ble High Court of Karnataka (His lordship Mr.Justice Hulavadi G.Ramesh) 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 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.
Thus, came the end of glorious but misconceived petitions filed by tenants. Yours truly, the undersigned, appeared for R13 and R14 and got the writ petition dismissed!
On 31.3.2011, a batch of writ petitions will be posted for final disposal before the same learned 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.
B.N.Gururaj,
Advocate,
22/2, 3rd Main Road,
Chamarajpet,
Bangalore - 560018.
Ph. 080-26679379
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