Home Case Index All Cases Service Tax Service Tax + HC Service Tax - 2018 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (2) TMI 1498 - HC - Service TaxNon-payment of service tax - Renting of immovable property service - allegation under the SCN is that MIDC has not paid service tax on services charges collected from the holders of the plots situated at various Industrial areas/estates of the MIDC - circular dated 18th December, 2006 bearing No.89/7/2006. Held that: - the activities performed by sovereign or public authorities under the provisions of law which are in the nature of statutory obligations are covered by clause 2 which provides that the fee collected by such sovereign or public authorities for performing such activities is in the nature of compulsory levy. Only if such authority performs service which is not in the nature of statutory activity and the same is undertaken for a consideration which is not in the nature of statutory fee, service tax would be leviable if the activity undertaken otherwise falls within the ambit of taxable service. Section 14 of the MID Act provides that the function of the MIDC is not only to develop industrial areas but to establish and manage industrial estates. The role of MIDC is not limited only to establishing industrial estates and allotting the plots or buildings or factory sheds to industrial undertakings. The function and obligation of the MIDC is also to manage and maintain the said industrial estates as provided in Section 14. Therefore, it is the statutory obligation of the MIDC to provide amenities as defined in clause (a) of Section 2 of the MID Act to the industrial estates established by it. Thus, it is the statutory obligation of MIDC to provide and maintain amenities in its Industrial estates such as roads, water supply, street lighting, drainage, etc. As provided in the circular dated 18th December, 2006, for providing amenities to the plot holders, the service fees or service charges collected by MIDC are obviously in the nature of compulsory levy which is used by MIDC in discharging statutory obligations under Section 14 - even in the OrderinOriginal, there is no finding of fact recorded that the service rendered for which service tax was sought to be levied was not in the nature of statutory obligation. MIDC is a statutory Corporation which is virtually a wing of the State Government. It discharges several sovereign functions - the Revenue ought not to have compelled MIDC to prefer Appeals before Appellate Tribunal. Appeal dismissed - decided against appellant.
|