Pantaloon Retail India Limited, the retail arm of the Kishore Biyani-led Future Group, has filed a petition against the union finance ministry in Gujarat High Court.
The retail conglomerate has challenged the finance ministry’s notification and circular, which issues 12.36 per cent service tax on renting of immovable property.
On February 4, 2008, the service tax department, quoting the finance ministry’s notification and circular, issued a notice asking the retail giant to furnish details of the company’s property in Vadodara.
According to Pantaloon, the property was rented in 2006 from Iskrupa Mall Management Co. Pvt. Ltd, on license basis.
The legal advisers of the company, in a statement, said, “When it is transfer of property, it cannot be termed as a service renting of immovable property and, therefore, service tax cannot be levied on such property.”
The court, led by a division bench of Justice MS Shah and KA Puj, has directed the union government not to make any forceful recovery of service tax and issued a notice to the attorney general of India.
The matter has been posted for hearing on April 22.