The Madras High Court dismissed writ petitions filed by music composers AR Rahman, CR Santhosh Narayanan, and GV Prakash Kumar on Thursday, February 2. The composers had challenged proceedings against them for not remitting full service tax by suppressing various receipts between 2013 and 2017.
Justice Anita Sumanth granted Rahman and Narayanan the liberty to file statutory appeals challenging the tax demand with penalty within four weeks. The appellate authorities under the Central Goods and Services Tax (CGST) Act of 2017 were directed to entertain the appeals without considering the limitation period.
In the case of GV Prakash Kumar, the judge pointed out that he had approached the court prematurely and permitted him to file his reply to a show cause notice issued by a Joint Director in the Directorate General of GST Intelligence within four weeks. The judge added that the issues raised in the writ petitions required a study of voluminous records, including the agreements signed with film producers between 2013 and 2017, and could not be addressed in writ proceedings.
In his affidavit, Rahman claimed that the Commissioner of GST and Central Excise initiated proceedings against him wrongly and that he was the sole owner of the copyright of his musical works. He relied on Section 13(1)(a) of the Copyright Act of 1957 and claimed that the composer would be the sole and absolute owner of the copyright on songs and background scores composed for movies produced by others. He added that permanent transfer of copyright could not be considered as a service liable for tax.
However, the Commissioner countered by saying that Rahman had not transferred absolute copyright of his work and had retained certain rights, disqualifying the assignment as absolute transfer. The Commissioner added that any legally enforceable right retained by Rahman disqualified the assignment as absolute transfer.