Supreme Court Upholds Delhi High Court's Directive For PVR INOX To Approach CESTAT On ₹17 Cr Service Tax Demand

Supreme Court Upholds Delhi High Court's Directive For PVR INOX To Approach CESTAT On ₹17 Cr Service Tax Demand

On Tuesday, the Supreme Court declined to interfere with a Delhi High Court order directing multiplex company PVR INOX to seek relief from the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) regarding a ₹17 crores service tax demand.

A Bench comprising Justices BV Nagarathna and N Kotiswar Singh instructed PVR INOX to file an appeal with CESTAT within 15 days, dismissing the company's appeal against the August 5 order of the Delhi High Court.

The case revolves around the applicability of service tax on income from renting immovable properties during the period before the Goods and Services Tax (GST) was implemented. On April 1 of this year, PVR INOX received a notice from the Commissioner of Central GST, Delhi West, demanding ₹17 crores, including interest and penalty, as tax.

PVR INOX contested this demand, arguing that the jurisdiction for such tax demands should be Mumbai and that some notices were incorrectly issued to Satyam Cineplexes, which PVR had previously acquired.

The Delhi High Court had refused to grant PVR relief, noting that the company had a sufficient remedy through a statutory appeal to CESTAT. The High Court opted not to quash the show-cause notices, leading PVR to escalate the matter to the Supreme Court. The Supreme Court has concurred with the High Court's view that PVR INOX should first pursue its appeal before CESTAT for redressal.