UNION OF INDIA vs BENGAL SHRACHI HOUSING DEVELOPMENT LTD.

The Supreme Court upheld the decision of the lower courts that the lessee is liable to pay service tax under the Finance Act, 1994, despite the lease agreement stating that the lessor would bear all taxes. The Court clarified that service tax is an indirect tax primarily levied on the recipient of the service, which in this case is the lessee. The Court affirmed the interpretation of Clause 6 of the lease deed, concluding that the liability to pay service tax lies with the lessee, thus dismissing the appeal.