Service Tax on Renting of Immovable Property for Commercial Purposes: Supreme Court stays operation of Delhi HC order against HDFC Bank, issues Notice [Read Order]

A Division Bench of the Supreme Court has stayed the operation of the Delhi High Court Judgement against HDFC Bank Ltd. with regard to the service tax demand on the bank to the tune of Rs.27,87,374/- on renting of immovable property for commercial purposes.

The counsel for the petitioner submitted that the High Court erroneously imposed the liability towards the service tax, on renting of the immovable property for commercial purpose, upon the Bank (tenant) whereas the service actually was provided by the landlord.

It was further submitted that the Bank is paying service tax on the services rendered to customers.

It is further submitted that the High Court erred in placing reliance upon Raghubir Saran Charitable Trust vs. Puma Sports India Pvt. Ltd. (2013) although the said judgment was assailed in C.A. No 25744-25745/2013 where leave was granted on 26.08.2023 by the Supreme Court.

“In the pending case as an interim measure, the concerned appellant (tenant) was directed to furnish bank guarantee with the sum involved subject to which, the impugned judgment of the High Court was stayed”, the Supreme Court Bench of Justices Hrishikesh Roy, M M Sundresh and Prashant Kumar Mishra noted.

Subject to deposit of the sum quantified by the High Court for the entire service tax i.e. Rs.27,87,374/-, the operation of the High Court judgment is stayed, the bench stated, granting interim relief to the bank.

To Read the full text of the Order CLICK HERE

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