Union Of India, Rep.... v. The Union Of India, ..., Kerala High Court, Judgment, Law, casemine.com

Citation Codes

Equivalent Citations

citation codes

Case Number

R.P Nos. 408 of 2012 in WP (C) No. 6885 of 2009, 409 of 2012 in WP (C) No. 1582 of 2010, 411 of 2012 in WP (C) No. 27172 of 2008, 412 of 2012 in WP (C) No. 20158 of 2009, 419 of 2012 in WP (C) No. 2113 of 2009, 420 of 2012 in WP (C) No. 24923 of 2010, 421 of 2012 in WP (C) No. 8924 of 2008, 423 of 2012 in WP (C) No. 6826 of 2008, 424 of 2012 in WP (C) No. 17288 of 2009, 428 of 2012 in WP (C) No. 11131 of 2011, 430 of 2012 in WP (C) No. 10360 of 2009, 431 of 2012 in WP (C) No. 21075 of 2008, 432 of 2012 in WP (C) No. 8982 of 2008, 434 of 2012 in WP (C) No. 11136 of 2011, 435 of 2012 in WP (C) No. 18989 of 2010, 442 of 2012 in WP (C) No. 37486 of 2007, 444 of 2012 in WP (C) No. 32768 of 2007, 448 of 2012 in WP (C) No. 13662 of 2008, 451 of 2012 in WP (C) No. 6257 of 2008, 452 of 2012 in WP (C) No. 31987 of 2010, 453 of 2012 in WP (C) No. 25487 of 2011, 457 of 2012 in WP (C) No. 2796 of 2010, 463 of 2012 in WP (C) No. 6237 of 2009, 464 of 2012 in WP (C) No. 25163 of 2007, 465 of 2012 in WP (C) No. 31409 of 2010, 466 of 2012 in W.A No. 1382 of 2011, 515 of 2012 in WP (C) No. 1833 of 2008, 516 of 2012 in WP (C) No. 21212 of 2010, 517 of 2012 in WP (C) No. 6282 of 2009, 526 of 2012 in WP (C) No. 32693 of 2008, 561 of 2012 in WP (C) No. 32002 of 2010, 562 of 2012 in WP (C) No. 30562 of 2010, 571 of 2012 in WP (C) No. 36158 of 2010, 572 of 2012 in WP (C) No. 27913 of 2009, 573 of 2012 in WP (C) No. 36379 of 2008, 577 of 2012 in WP (C) No. 14693 of 2009, 578 of 2012 in WP (C) No. 34970 of 2009, 579 of 2012 in WP (C) No. 7815 of 2009, 580 of 2012 in WP (C) No. 32828 of 2009, 581 of 2012 in WP (C) No. 1073 of 2009, 582 of 2012 in WP (C) No. 34871 of 2009, 583 of 2012 in WP (C) No. 27956 of 2009, 584 of 2012 in WP (C) No. 36828 of 2009, 585 of 2012 in WP (C) No. 35829 of 2007, 587 of 2012 in WP (C) No. 31183 of 2010, 588 of 2012 in WP (C) No. 29837 of 2010, 589 of 2012 in WP (C) No. 1182 of 2010, 590 of 2012 in WP (C) No. 17490 of 2009, 591 of 2012 in WP (C) No. 34542 of 2010, 592 of 2012 in WP (C) No. 26736 of 2009 & 745 of 2012 in WP (C) No. 36822 of 2007,Against the Order/Judgment in W.P.C 6885/2009 Dated 24-02-2012

Advocates

By Adv. Sri. John Varghese, SC, Cen. Board of Excis
By Adv. Sri. G. Sreekumar (Chelur)

Judges

C.N Ramachandran Nair
Babu Mathew P. Joseph, JJ.

Acts

Section 65(105)(zzzz) and Section 66 of the Finance Act, 1994 as amended by Finance Act, 2010

See more information ...

Smart Summary

Factual and Procedural Background

The review petitions challenge a common judgment in writ petitions and writ appeals in which this Court upheld the constitutional validity of Section 65(105)(zzzz) and Section 66 of the Finance Act, 1994 as amended by Finance Act, 2010, providing for levy of service tax on renting of immovable property service. The Court had followed the Full Bench decision of the Delhi High Court in Home Solutions Retails (India) Ltd v. Union of India (2011 (45) VST 413). The Court noted that Special Leave Petitions were filed in the Supreme Court against the Delhi Full Bench decision and that the Supreme Court had granted conditional stay orders in those SLPs directing payment of service tax from 1.10.2011; following that, this Court had stayed collection of arrears until 30.9.2011 and left parties free to avail themselves of any beneficial Supreme Court orders when finally pronounced.

The Department filed the present review petitions seeking modification of this Court's interim direction to incorporate conditions contained in a different Supreme Court interim order in Civil Appeal No. 8390 of 2011 and connected cases (filed by M/s. Retailers Association of India) under which the Supreme Court directed payment of 50% of arrears up to 30.9.2011 and furnishing of security for the balance 50%. Some respondents opposed the review petitions.

Legal Issues Presented

Whether the review petitions should be allowed to modify this Court's interim order to incorporate the conditional stay terms (payment of 50% and furnishing of security for balance) contained in the Supreme Court's interim order in Civil Appeal No. 8390 of 2011 and connected cases.
Whether this Court is bound to follow the interim orders passed by the Supreme Court in the Special Leave Petitions pending against the Delhi High Court Full Bench decision which this Court had followed in reaching its judgment.

Arguments of the Parties

Review Petitioners (Department)

Sought modification of this Court's judgment to incorporate the Supreme Court's conditional stay terms issued in Civil Appeal No. 8390 of 2011 and connected cases (payment of 50% of arrears and security for balance).
Standing counsel submitted that the Supreme Court had sought details about the demand in the pending SLPs which parties had not furnished, and that this omission explained why the Supreme Court's stay in the Retailers Association matter was not extended to these cases.

Respondents

Opposed the review petitions, contending that this Court should not pass an order inconsistent with the interim orders the Supreme Court had passed in the Special Leave Petitions pending against the Delhi High Court Full Bench decision relied upon by this Court.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Home Solutions Retails (India) Ltd v. Union of India (2011 (45) VST 413)	Full Bench decision of Delhi High Court upholding validity of statutory provisions challenged (basis followed by this Court).	This Court followed the Full Bench decision to uphold the constitutional validity of Section 65(105)(zzzz) and Section 66 of the Finance Act, 1994 as amended by Finance Act, 2010, and referenced the related Special Leave Petitions pending in the Supreme Court when framing interim directions.
Civil Appeal No. 8390 of 2011 and connected cases	Supreme Court interim order directing payment of 50% of arrears up to 30.9.2011 and furnishing of security with solvent sureties for the balance 50%.	Identified by the Department as a differing Supreme Court interim order which the Department sought to have incorporated into this Court's interim order; this Court held it could not grant the modification but will apply any future Supreme Court modifications in the pending SLPs.

Court's Reasoning and Analysis

The Court observed that it had followed the Delhi High Court Full Bench decision in reaching its earlier conclusion; because Special Leave Petitions are pending in the Supreme Court against that Full Bench decision, the Court considered itself bound to follow the interim orders the Supreme Court had issued in those SLPs. The review petitions sought to import conditions from a different batch of Supreme Court interim orders (Retailers Association matters) into this Court's order. The Court declined to allow the review because it could not modify its order inconsistent with the Supreme Court's interim order in the SLPs arising from the Delhi Full Bench decision that this Court had followed. The Court noted the Department's submission that the Supreme Court had sought details of demand in the pending SLPs which parties had not furnished, explaining why the Supreme Court's Retailers Association terms were not extended to these cases. The Court directed that any further interim orders issued by the Supreme Court modifying the stay in the SLPs pending against the Delhi Full Bench decision in Home Solutions will be applied to these respondents; the Department may obtain details of arrears and recover amounts or enforce security conditions as ordered by the Supreme Court. Respondents must comply with any such Supreme Court modifications within three weeks of intimation, failing which the Department may recover the entire arrears.

Holding and Implications

DISPOSED OF

Holding: The review petitions are dismissed insofar as they seek modification of this Court's interim order to incorporate the conditional terms from Civil Appeal No. 8390 of 2011 and connected cases. The Court held that it is bound to follow the interim orders of the Supreme Court in the Special Leave Petitions pending against the Delhi High Court Full Bench decision that this Court had followed.

Implications: The direct effect is that any further interim orders issued by the Supreme Court modifying the stay orders in the Special Leave Petitions against the Home Solutions Retails Full Bench decision will be applied in these cases; the Department is authorised to call for arrear details, recover amounts as ordered by the Supreme Court, and enforce security conditions. Respondents must comply with such Supreme Court orders within three weeks of intimation or face recovery of the entire arrears. The opinion does not pronounce any new precedent beyond applying existing Supreme Court interim orders to these matters.

Show full summary ...

Union Of India, Rep. By The Secretary To The Government, Ministry Of Finance, North Block New Delhi - 110 001. v. The Union Of India, Rep. By The Secretary To The Government, Ministry Of Law, Justice And Company Affairs, New Delhi - 110 001.

ORDER

RAMACHANDRAN NAIR, J

All these review petitions are filed for reviewing the common judgment in the writ petitions and writ appeals which were disposed of by this court, whereunder we upheld the constitutional validity of Section 65(105)(zzzz) and Section 66 of the Finance Act, 1994 as amended by Finance Act, 2010 providing for levy of service tax on renting of immovable property service. This court just followed the Full Bench decision of Delhi High Court in Home Solutions Retails (India) Ltd v. Union of India (2011 (45) VST 413), upholding the validity of the statutory provisions challenged in this court. However, it was brought to the notice of this court that in the Special Leave Petitions filed against the Full Bench decision of Delhi High Court (supra), Supreme Court granted conditional stay orders directing payment of service tax on renting of immovable property service from 1.10.2011 and following the Supreme Court order in the very same special leave petition, we stayed the collection of arrears of tax until 30.9.2011 It was also stated by us that unnecessarily all parties need not go to the Supreme Court against our judgment with special leave petitions, as we have only followed the Full Bench decision of the Delhi High Court, which is pending in appeal before the Supreme Court. We therefore disposed of the writ petitions leaving it open to the parties to avail the benefit of the Supreme Court judgment to be applied in these cases also as and when Supreme Court finally decides the matter.

2. The review petitions are filed by the Department stating that in another batch case in Civil Appeal No. 8390 of 2011 and connected cases, filed by M/s. Retailers Association of India against the judgment of Bombay High court, Supreme Court has passed a different conditional stay order directing payment of 50% of the arrears upto 30.9.2011 and furnishing of security with solvent sureties for the balance 50%.

3. The prayer in the review petitions is for modifying the judgment under review incorporating the above condition in the interim order passed by Supreme Court. Notice is not served on respondents in all the cases, but respondents appearing in few cases opposed the review petitions by stating that this court should not pass a stay order in variance with what Supreme Court has passed in the special leave petitions pending against the Full Bench decision of the Delhi High court relied on.

4. After hearing both sides, we do not think that the review petitions could be allowed because, we are bound to follow the interim order passed by the Supreme Court in the special leave petitions pending against the judgment of Delhi High Court as we have followed the Full Bench decision of Delhi High Court to decide the cases against the respondents.

5. The standing counsel for the review petitioners submitted that Supreme Court has sought details about the demand in the pending special leave petition which are not furnished by the parties and that is the reason why the stay order is not modified in line with the stay orders issued in Retailers Association case (supra).

6. We therefore dispose of the review petitions by stating that further interim orders, if any, issued by Honourable Supreme Court modifying the stay orders in the special leave petition pending against the judgment of Delhi High court in Home Solutions Retails (India) Ltd case (supra), will be applied in the case of all respondents and the department is free to call for details of arrears and to recover the amount which is ordered by Supreme Court and enforce other conditions in regard to security also ordered by Supreme Court in the case pending before Supreme Court. There will be a direction to the respondents to comply with the Supreme Court orders, if any, issued modifying the stay orders in Home Solutions Retails (India) Ltd case (supra), on being intimated by the department, within three weeks from the date of intimation, failing which department can recover the entire arrears of tax.

Review petitions are disposed of as above.

Union Of India, Rep.... v. The Union Of India, ...