W.P.(C)/2998/2017 of MANJEET HOTELS PVT.LTD. & ANR. Vs AIRPORTS AUTHORITY OF INDIA & ANR.

*IN THE HIGH COURT OF DELHI AT NEW DELHI

+W.P.(C) 2998/2017 & CM APPL. 13126/2017 (stay)

MANJEET HOTELS PVT. LTD. & ANR...... PetitionersThrough:Mr.DayanKrishnan,SeniorAdvocate with Mr. Anuj Malhotra,Advocate.

versus

AIRPORTS AUTHORITY OF INDIA & ANR.

..... Respondents

Through:Mr. Anil Kathuria, ASC with Mr.Neeraj Arora, Advocate for R-1.Mr. Snehasish Mukherjee, learnedcounsel for the Respondent No.2

CORAM:JUSTICE S.MURALIDHARJUSTICE PRATHIBA M. SINGH

O R R13.09.2017

1. The Petitioners seek the release of the Bank Guarantee (‘BG’) dated16[th]February 2008 in the sum of Rs. 70 lakhs issued in favour of theRespondent No. 1 by the Petitioners. Although the petition when it was filedalso prayed for the release of two other BGs in favour of Respondent No. 2,Mumbai International Airport Private Limited (‘MIAL’) for Rs. 16.50 lakhsand Rs. 93.08 lakhs, the said two BGs lapsed and were not renewed.

2. The case of the Petitioners is that, after the decision dated 30[th]July 2014of this Court in W.P. (C) No. 4274/2010 (Airport Retail Private Limited v.Union of India), no service tax was payable by the Petitioners on the licensefee for the period prior to 1[st]June 2007. It is stated that on the above basisthe Petitioners’ own Writ Petition No. 545/2007 was disposed of on

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2[nd]May 2016 by the High Court of Bombay. During the pendency of theabove writ petition, the Petitioners had furnished the three BGs.

3. The Petitioners after succeeding in the writ petition, asked for return ofthe BGs by letters dated 12[th]May 2015 and 15[th]June 2016. By replies dated16[th]June 2016 (by Respondent No.2) and 23[rd]June 2016(by RespondentNo.1), the Petitioners were asked to approach this Court for return of theBGs.

4. In the present petition, on 22[nd]May 2017, the Court granted finalopportunity to the Respondents to file replies. Respondent No.1 wasrestrained from encashing the BG subject to it being kept renewed by thePetitioners during the pendency of the petition.

5. Mr. Dayan Krishnan, learned Senior Advocate, states that the said BG hasbeen kept alive pursuant to the above direction of this Court.

6. In its reply, Respondent No. 1 states that since it has already deposited theservice tax with the Central Government, it cannot seek refund and that it isonly the service tax provider who can claim the refund. Reference is made toSection 73 (5) of the Finance Act, 1994.

7. The Court finds that the above submission is based on misconception ofthe legal position. The Petitioners took the stand that they are not to liableto pay the service tax for the period prior to 1[st]June 2007. It is for thatreason that instead of paying service tax under protest they furnished BG

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in favour of Respondent No.1. If the AAI, on its own, deposited the servicetax with the Central Government, the AAI would be entitled to refundthereof in accordance with law. The AAI would have to satisfy the CentralGovernment that it has not passed on the burden of the service tax liabilityto the Petitioners, which in fact, it did not.

8. For the above reasons, the Court is of the view that there is nojustification for Respondent No.1 to continue retaining the BG issued in itsfavour. Accordingly Respondent No.1 is directed to forthwith return to thePetitioners BG No. PBG 2007/70029 dated 16[th]February 2008 issued in itsforasumofRs.70lakhsand,inanyevent,notlaterthan30[th]September 2017.

9. Although Respondent No. 2 has not filed counter affidavit, the factremains that the two BGs issued in its favour have lapsed thus rendering thereliefs sought in respect thereof infructuous.

10. The writ petition is allowed in the above terms but with no order as tothe costs. The application is disposed of.

S. MURALIDHAR, J.

SEPTEMBER 13, 2017/dk

PRATHIBA M. SINGH, J.

W.P.(C) 2998/2017