IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH MONDAY, THE 1ST DECEMBER 2008 / 10TH AGRAHAYANA 1930 WP(C).No. 30061 of 2008(D) -------------------------- PETITIONER(S): --------------- K.M.PAREETH, S/O MUHAMMED, AGED 56 YEARS KAVATTU HOUSE, ERAMALLOOR VILLAGE, KOTHAMANGALAM TALUK. BY ADV. SRI.M.V.SABU RESPONDENT(S): --------------- 1. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, DEPARTMENT OF LOCAL SELF GOVERNMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. THE KOTHAMANGALAM MUNICIPALITY, REPRESENTED BY ITS SECRETARY, KOTHAMANGALAM. 3. THE SUPERINTENDENT OF CENTRAL EXCISE, MUVATTUPUZHA ZONE, OFFICE OF THE SUPERINTENDENT OF CENTRAL EXCISE, ARAKUZHA ROAD, MUVATTUPAUZH. BY ADV. SRI.V.M.KURIAN FOR R2 P.GOPINATHA MENON FOR R3 GOVERNMENT PLEADER SRI.C.K.GOVINDAN FOR R1 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01/12/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M. JOSEPH, J. ```````````````````````````````````````````````````` W.P.(C) No. 30061 OF 2008 D ```````````````````````````````````````````````````` Dated this the 1st day of December, 2008 J U D G M E N T Petitioner is a trader. He took a shop room from the 2nd respondent Municipality under Ext.P1. On the basis of the Finance Bill 2007, service tax is levied on renting of immovable property from 1.6.2007. Petitioner has been issued Ext.P3 notice dated 24.7.2008 asking him to pay service tax from 1.6.2007 to 30.8.2008. Petitioner challenges Ext.P3 and seeks a direction not to demand service tax. Petitioner also seeks a direction to receive the monthly rent fixed as per Ext.P1 excluding the service tax demanded in Ext.P3. A declaration is sought that the liability to pay service tax is on the service provider and the petitioner is not liable to pay service tax. Petitioner also prays that Ext.P4 representation may be disposed of. 2. I heard learned counsel for the petitioner Sri.M.V.Sabu, the learned counsel for the Municipality Sri.P.Gopinath Menon and the learned counsel appearing on behalf of the 3rd respondent. Two contentions are raised by the learned counsel for the WPC.30061/08 : 2 : petitioner. Firstly, he contends that service tax cannot be passed on and it has to be paid by the Municipality. Secondly, he submits that the agreement is dated 24.6.2008 and yet demand is made for service tax from 1.6.2007 onwards. Learned counsel for the 3rd respondent would contend that the matter is squarely covered by the virtue of the decision in All India Federation of Tax Practitioners Vs. Union of India [2007 (7) STR 625(SC)]. There is also a bench decision of this court in All Kerala Chartered Accountants Association Vs. Union of India [2002 (2) KLT 512]. According to him, it is an indirect tax and there is no prohibition against service tax provided passing it on to the tenant. Learned counsel for the 2nd respondent would contend that the petitioner is actually liable for the period from 24.6.2008. I record the said submission. As far as the contention that service tax cannot be passed on to the tenant, I do not think there is merit in the contention. Service tax in question is levied as an indirect tax. There is no prohibition against it being passed on to the tenant. It is the case of the respondents that under section 12B of the Central Excise Act read with section 83 of the Finance Act, 1994, WPC.30061/08 : 3 : the tax liability can be passed on. I am in agreement with that contention. I am of the view that service tax can be passed on. It is, therefore, ordered that the petitioner will be liable to pay the service tax for the period from 24.6.2008. Subject to the same, the writ petition is dismissed. Sd/- (K.M.JOSEPH, JUDGE) aks // TRUE COPY // P.A. TO JUDGE