The Punjab and Haryana High Court has recently held that service tax is not applicable to cycle parking stands and ordered the release of the security amount along with interest accrued on the same in favour of the petitioner.
The petitioner had taken vacant land on lease at Bus Stand, Karnal, for parking of cycle/scooters,in the financial year 2012-2013. The petitioner was directed to deposit an amount of Rs. 1,56,000/- as refundable security along with the rental as agreed.
According to the claims of the petitioner, he has regularly deposited the due rent/charges leviable in terms of the Tender for the vacant land. The petitioner was served with a notice by the respondent Department that service tax amount is required to be deposited by the petitioner to which a response was filed to the effect that in terms of Section 65(105)(zzzz) of the Finance Act, 1994, the service was not leviable upon the petitioner for the said parking services.
After completion of the period of contract, the petitioner approached the respondents for seeking release of the security amount, however, no heed was paid to the same, as per the submissions of the petitioner.
The respondent-revenue submitted that as per Clause 11 of the agreement signed between the
parties, the petitioner was liable to pay all applicable taxes and that the petitioner was requested to deposit the service tax which was not done.
It was observed by the Single Bench of Justice Vinod S Bhardwaj that, “Department of Central Excise (as it was then), now the Assistant Commissioner Central GST clearly states that in the present case service tax was not applicable and that no demand of service tax has ever been raised by the concerned department” and ordered to release the security amount and interest accrued on fixed deposit of the same expeditiously and preferably within four weeks of receipt of copy of the order.
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