HC dismisses pleas of AR Rahman, GV Prakash, Santhosh Naryanan challenging service tax levied
Express News Service
CHENNAI: The Madras High Court dismissed the petitions filed by popular music composers AR Rahman, GV Prakash Kumar and Santhosh Narayanan on Thursday. The composers had challenged proceedings against them for not remitting full service tax by suppressing various receipts between 2013 and 2017.
The High Court also trashed another plea by a hotel management institute on the same matter.
The music composers had challenged the original order and show cause notice issued by the Commissionerate of CGST and the GST Intelligence relating to liability to service tax under the Finance Act 1994 for transfer of copyright in musical work.
Despite dismissing the petitions, the judge allowed AR Rahman, Santhosh Narayanan and the Amirtha International Institute of Hotel Management to approach the appellate authority by way of statutory appeal
“Such appeals, if filed within four weeks from the date of receipt of a copy of this order, shall be entertained by the authority without referent to limitation (delay) but subject to all other statutory compliances,” Justice Anita Sumanth said in the order.
As far as GV Prakash Kumar’s plea is concerned, she permitted him to file a response to the show cause notice within four weeks and take matters forward in accordance with the law since the challenge was “far too premature”.
In the case of AR Rahman, the CGST Commissionerate’s notice proposed a levy of service tax for the period from April 2013 to June 2017 asserting that he was not the owner of the musical work composed.
GV Prakash Kumar was asked to pay the service tax on the ground that he has suppressed various receipts and failed to remit the tax while Santhosh Narayanan challenged the original order issued in August 2022.
The music composers contended that they are the sole and absolute owners of the copyright that subsists in the musical works and not the producers of the movies. They also challenged the jurisdiction of the concerned authorities who had issued them the original order and show cause notice and raised the issue of change of service tax regime as GST came into being.
Referring to intrinsic issues of the matter, the judge said, “The nature of the Intellectual Property Right (IPR) vesting in the music composers, the terms inter se the composers and film producers/third parties, whether there has been an assignment of the IPR, the terms of the assignment, if at all, are all questions of fact that would have a bearing upon the intrinsic question, relating to the applicability of the Exemption Notification to these petitioners.”
She held that it is best that such issues be decided by the authorities who can call for relevant information from the petitioners, including the agreements they signed in the period mentioned.
Interpretation of contractual clauses is not a matter that should concern this court, she added.
The Amirtha International Institute of Hotel Management, which was engaged in conducting professional and executive diploma courses in hotel management, too was issued a show cause notice in 2018 by the DG of GST Intelligence proposing to levy service tax for the period from January 1, 2013, to June 30, 2017, as the activity amounted to service.
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