DELHI INTERNATIONAL AIRPORT PVT. LTD. Versus UOI AND OTHERS

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.10785 OF 2014 @ SPECIAL LEAVE PETITION (CIVIL) NO.22941 OF 2014

DELHI INTERNATIONAL AIRPORT PVT. LTD. …. Appellant

Versus

UOI AND OTHERS …. Respondents

The appellant and the Airport Authority of India entered into an Operation, Management and Development Agreement (“OMDA” for short)dated 04.04.2006 whereby the appellant, undertook inter alia, to perform the functions of the operation, management, development and design, upgradation, modernization, finance and management of the Indira Gandhi International Airport at Delhi and to perform Aeronautical Services and Non-Aeronautical Services. The appellant was given on lease the premises of the Airport for performing the obligations as mentioned in the OMDA. In pursuance of its business and operation at the Airport, the appellant entered into an agreement dated 09.11.2006 whereby licensees named therein were granted a licence to set up and operate duty free shops within the airport premises. Thereafter Respondent No.5 herein was incorporated and a settlement agreement dated 07.02.2008 was signed whereby licence agreement dated 09.11.2006 was novated in favour of Respondent No.5. Inconsideration of said licence, Respondent No.5 was required to pay to the appellant a fixed monthly licence fee and also a share of the gross revenue generated by various products categories which were to be sold at the duty free shops. The Finance Act, 2007 introduced the levy of service tax on services in relation to renting of immovable property through the introduction of Section 65(90)(a). The charge of service tax was accordingly introduced in Section 65(105)(zzzz). Thereafter section 65 (105) (zzm) of the Finance Act, 1994 was amended with effect from 01.07.2010 and section 65 (105) (zzzz)of the Finance Act, 1994 was also amended with retrospective effect from01.06.2007. In view of the amended clause 65 (105) (zzzz), service tax was levied retrospectively from 01.06.2007 on renting of the immovable property. In view of such retrospective amendment the appellant called upon Respondent no.5 to send the entire amount of service tax w.e.f.01.06.2007, which led to the filing of W.P. No.4274 of 2010 by respondentno.5 in the High Court of Delhi. The High Court by its order dated23.06.2010 extended the interim order passed in similar matter in favour of respondent no.5 to the effect, “In the meanwhile there shall be no recovery of service tax from the petitioner in respect of renting of immovable property alone.” During the pendency of said petition, the appellant again vide its letter dated 28.06.2010 demanded payment of service tax from respondent no.5….read more