Madras HC dismisses pleas of music composers AR Rahman, GV Prakash challenging service tax relief
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 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.
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 Prakashkumar’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”.
The music composers challenged the order-in-original 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.
In the case of AR Rahman, the 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 order-in-original issued in August 2022.
They 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 order-in-original and show cause notice and raised the 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 for their appreciation, including the agreements. Interpretation of contractual clauses is not a matter that should concern this Court.
The Amirtha International Institute of Hotel Management-which was engaged in conducting professional and executive diploma courses in hotel management-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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