Delhi HC grants interim relief to Pawan Hans Ltd against VAT Tribunal order
Jan 18, 2023
New Delhi [India], January 18 : The Delhi High Court granted interim relief to Pawan Hans Ltd against an order passed by the Delhi VAT Tribunal confirming a demand of VAT amounting to approx. Rs 176 crores on account of chartering of helicopters.
The bench of Justice Vibhu Bhakru and Justice Amit Mahajan in a recent order passed last week ordered that respondents shall not take any coercive steps for recovery of the demand as upheld by the impugned order
After issuing notice to respondents, the bench posted the matter for March 16, 2023, for a final hearing. Tarun Gulati, Senior Advocate with Rajat Bose, Ankit Sachdeva, Shohini Bhattacharya and Kumar Sambhav Advocates appeared for Pawan Hans Ltd in the matter
Tarun Gulati, senior counsel appearing for the appellant submitted in the Delhi High Court that the helicopters continue to be in possession and control of the appellant. The pilots manning the said aircraft are under the rolls of the appellant. Further, the maintenance of the helicopters is also done by the appellant.
Senior Advocate Gulati further submitted that the appellant was registered with the Service Tax Authority for rendering the service of "Supply of Tangible Goods for Use Services". And, has duly paid the Service Tax as chargeable under the Finance Act, 1994. He also submitted that the impugned order is palpably erroneous.
"Notwithstanding the same, if it is held that there has been a transfer of right to use the aircraft, the appellant would not be liable to pay any Service Tax as both the taxes are mutually exclusive," he added.
The appellant (Pawan Hans Limited) recently filed the present appeal in Delhi High Court against an order passed by the Appellate Tribunal, Value Added Tax, Delhi. The appellant stated that it is in the business of chartering helicopters and has entered into agreements with various State Government and public sector entities for hiring its helicopters.
According to the VAT authorities, the agreements entail the transfer of the right to use and therefore, the consideration would be taxable under the Delhi Value Added Tax Act, 2004.
Accordingly, the commissioner of Trade and Taxes raised the demand for a sum of Rs 175,99,76,819 for the relevant period (the year 2006 to 2010) and the impugned order has confirmed the demand.
