* IN HIGH COURT OF DELHI AT NEW DELHI Date of Decision:18.06.2020 + W.P.(C) 3597/2020 M/S ALLIED ENGINEERS & BUILDERS PVT. LTD. . .Petitioner Through: R.M. Sinha and Prateek M. Sinha, Advocates. versus M/S MUTHOOT FINANCE LIMITED & ANR ..Respondents Through: Arvind Kumar, Assistant Commissioner of Central GST. CORAM: HON BLE MR. JUSTICE MANMOHAN HON BLE MR. JUSTICE SANJEEV NARULA JUDGMENT SANJEEV NARULA, J. (Oral) CM APPL. 12795/2020 1. Exemption allowed, subject to just exceptions. 2. application is disposed of. W.P.(C) 3597/2020 3. Petitioner has preferred present petition under Article 226 of Constitution of India seeking following reliefs: It is therefore respectfully prayed that this Hon'ble Court may kindly be pleased to issue writ of mandamus or certiorari any other similar writ or order or direction, directing respondent no.2 to disclose as to whether respondent no.1 has taken credit of GST amount earlier Service Tax qua (GST REGN. N0.07AABCT0343BIZO) - charged by petitioner in rent bills raised against respondent no.1-the tenant-the end user, so W.P.(C) 3597/2020 Page 1 of 5 as to petitioner can recover Service Tax now GST amount from Tenant -the respondent no 1. Such other or further orders may be passed in favour of petitioner and against respondents as this Hon ble Court deems fit and proper under facts and circumstances of case. 4. Petitioner avers that it is sole/absolute owner/lease rights holder and in possession of shop/office premises situated on ground floor, Plot No. C- 2, J Block, L.S.C., Wazirpur, Opp. Water Tank Ashok Vihar, Delhi 110052. afore-noted property has been leased in favour of Respondent No.1, vide lease agreement dated 27th June 2011, on monthly rent of 81,000/-, for term of 15 years. Clause 13 of lease deed is stated to be bone of contention between Petitioner and Respondent No. 1. said clause reads as under: That lesser shall be liable to pay all taxes/charges in respect of demised premises including property/Municipal Taxes, levies etc, Service Tax and all other taxes" lesser shall also be responsible and liable for payment of any new/additional charges rates, taxes, surcharges, penalties, etc. whatsoever raised by competent authority/forum etc, at any time, pertaining to demised premises for its use or otherwise. 5. It is asserted that earlier when total turnover of Petitioner was below threshold limit required for service tax registration, invoices for monthly rent were issued without levying service tax. Later, when turnover crossed threshold limit, it got registered with service tax department and started levying service tax on rent amount. Presently, Petitioner is raising invoices with GST at prevailing rate. 6. Mr. Sinha, Learned Counsel for Petitioner argues that Petitioner has been charging Service Tax/GST at rate of 18% on monthly rent, but W.P.(C) 3597/2020 Page 2 of 5 Respondent No.1 has not been paying said taxes. Notwithstanding said default, Petitioner has been regularly depositing taxes with tax department. Mr. Sinha draws our attention to tabulation in petition, enumerating monthly rent invoices for period from November 2012 to June 2020. said table captures bill amount, Service Tax/GST component and balance amount due and payable by Respondent No. 1 against each invoice. Mr. Sinha argues that even though Respondent No.1 has discharged liability towards rent amount, but taxes levied on invoices are outstanding. 7. Relying upon provisions of Finance Act and judgement of this court in case of Pearey Lal Bhawan Association Vs. Satya Developers Pvt. Ltd, 173 (2010) DLT685, it is contended that even though primary liability for payment of service tax/GST is on owner of property, but same is ultimately payable by tenant. It is further argued that both service tax as well as GST can be adjusted against out-going taxes. Therefore, whatever amount is paid by Respondent No.1 towards said taxes, would eventually be entitled for adjustment. Keeping in view scheme of taxation, Respondent No. 1 in all likelihood would have taken credit of Service Tax/GST deposited by Petitioner with tax department. However, despite taking credit, Respondent No. 1 has not reimbursed taxes and therefore availment is unauthorised. In order to verify this position, Petitioner issued legal notice dated 20th May, 2020 to Respondent No. 1 and requested them to provide Tax returns. Despite service of notice there has been complete silence making it evident that credit of Service Tax/GST has been availed. 8. Mr. Sinha submits that since there is no other efficacious remedy under law to seek requisite information , he is making innocuous prayer of W.P.(C) 3597/2020 Page 3 of 5 directing Respondent No. 2 to disclose and confirm as to whether Respondent No.1 has taken credit of Service Tax/GST amount charged by Petitioner in monthly rent invoices. Petitioner is not seeking any reimbursement of taxes by way of present petition. Mr. Sinha submits that tax liability has been discharged by payment to tax department, but since ultimate liability of payment of service tax and GST is on end user tenant, Respondent No. 2 should be directed to provide requisitioned information. 9. In our view, present petition is misconceived. Apparently, Petitioner has not received entire amount against monthly rent invoices for period commencing from November 2012 to June 2020. Petitioner contends that outstanding amount is towards tax component levied on said invoices. In present case, we have not been called upon to adjudicate as to whether liability to pay taxes is on Petitioner or Respondent No. 1. This question would have to be determined inter-se Petitioner and Respondent No.1, in appropriate proceedings, having regard to terms and conditions of lease agreement and in particular Clause 13, extracted in foregoing paragraphs. Here, we are only concerned with respect to prayer made in present petition seeking direction to Respondent No. 2 [Principal Chief Commissioner of GST and Central Excise] to furnish information sought for by Petitioner. Concededly, as owner/ landlord of property in question, Petitioner was required to register itself, and discharge service tax liability from date it was covered under threshold limit applicable to service tax. Likewise, under CGST Act, 2017, renting of certain immovable properties is treated as taxable services. Here also it is Petitioner who has obligation to discharge GST liability. service tax/GST paid on rent can be availed as Input Tax Credit for utilisation against outgoing payments, W.P.(C) 3597/2020 Page 4 of 5 provided, however, criteria for availing Input Tax Credit is met. However, availment of credit of taxes paid by Lessee does not affect liability of registered taxpayer to pay taxes. In so far as tax department is concerned, it is Petitioner who is registered with them and is liable to pay taxes. Under GST, point of taxation, that is liability to pay GST will arise at time of supply, as determined for goods and services. This obligation to pay Service Tax/GST is irrespective of Respondent No. 1 taking credit of taxes paid. Thus, in our view whether Respondent No. 1 has availed credit of Service Tax/GST or not is immaterial and will not effect Petitioner s right, if any, to recover same. At cost of repetition, we reiterate that this right of recovery would have to be determined in context of clauses contained in lease agreement, in appropriate proceedings. 10. Lastly, we would also like to observe that Learned counsel for Petitioner is also unable to show any provision of law that puts obligation on tax department to furnish information for which mandamus is being sought. In case petitioner has no such legal right, prayer cannot be granted. We find no merit in petition and same is dismissed. Needless to say, rights and contentions of parties are left open. SANJEEV NARULA, J MANMOHAN, J JUNE 18, 2020 nk W.P.(C) 3597/2020 Page 5 of 5 Allied Engineers & Builders Pvt. Ltd. v. Muthoot Finance Limited & Anr