Smt K. Himabindu vs. The Tsrtc
Held
The Court held that the petitioner's claim of non-liability to pay GST on the license fee was devoid of merit. The reasoning was based on Clause 43 of the Deed of License, which stipulated that the licensee would pay service tax at 14% on the monthly license fee. The Court noted that the respondents had been collecting service tax separately in addition to the license fee, which the petitioner had paid without protest. Since GST subsumed service tax, the Court found that the demand for GST was not a new imposition but a continuation of the petitioner's agreed-upon tax liability. Therefore, the petitioner could not be absolved of the liability to pay GST in place of service tax. The Writ Petition was dismissed on this ground.
Facts
The petitioner, Smt K. Himabindu, was granted a license by the respondents (TSRTC and its officials) to operate a popcorn stall on their premises. A Deed of License was executed on September 22, 2017, stipulating a license fee. The petitioner contends that the respondents illegally demanded Goods and Services Tax (GST) on this license fee, arguing it violated the terms of the license agreement. The respondents countered that the Deed of License included a clause for the licensee to pay service tax on the monthly license fee, and with the introduction of GST replacing service tax, the demand for GST was a continuation of the agreed-upon tax liability, not a new imposition.
Key Issues
1. Whether the demand of Goods and Services Tax (GST) by the respondents on the license fee payable by the petitioner for carrying on business in the respondents' premises is illegal and arbitrary, violating the terms of the license granted, as per Article 226 of the Constitution of India. Petitioner's arguments: The petitioner argued that the respondents' action of levying GST on the license fee was illegal, arbitrary, and violated the principles of natural justice and the specific terms of the Deed of License. They contended that the demand for GST, effective from July 1, 2017, was contrary to the agreement. Respondents' arguments: The respondents argued that the Deed of License contained a clause obligating the licensee to pay service tax on the monthly license fee. They asserted that GST, introduced on July 1, 2017, replaced service tax, and therefore, the demand for GST was not a new levy but a substitution for the previously agreed-upon service tax, and the petitioner was liable to pay it.
Sections Cited
Finance Act, 1994
AI-generated summary — verify with the full judgment below
HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY,THE TWELFTH DAY OF DECEMBER TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE SRI JUSTICE T.VINOD KUMAR THE HONOURABLE SRI JUSTICE PULLA KARTHIK WRIT PETIT,ION NO: 20885 OF 2018 Between: Smt K. Himabindu, Wo. Subba Krishnaiah, Age. 25 years, Occ. Business, R/o. H.No. 5-23012, Rajeev Nagar Colony, NH-44, Kurnool Road, Jadcherla, Mahaboob Nagar District. ...PETITIONER AND 1. The TSRTC, rep., by its Managing Director and Vice Chairman Bus Bhavan, Musheerabad, Hyderabad,
The Regional Manager,, TSRTC., Mahaboob NagarRegion, Mahaboob Nagar District.
The Depot Manager,, TSRTC., Mahaboob Nagar, Mahaboob Nagar Daskict.
The Deputy Chief Traffic Manager, Mahaboob Nagar Region, Mahaboob Nagar District. ..,RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order or direction more particularly one in the nature of Mandamus or nay other appropriate writ declaring the action of the respondents levying Goods and Services Tax (GST) On the license fee payable by the
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