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TMI Blog2025 (1) TMI 1260X X X X Extracts X X X X X X X X Extracts X X X X ..... immovable properties such as shops, commercial complex, etc. The department alleged that the Appellant had failed to obtain service tax registration and remit Service Tax. A Show Cause Notice dated 17.04.2013 was issued to the Appellant demanding service tax for the period from October 2007 to March 2012 which was adjudicated and appealed against. Subsequently, a statement of demand was issued for the period from April 2012-March 2013 proposing to demand service tax of Rs.4,82,206/- along with interest and to impose penalties. The Adjudicating Authority confirmed the demand and imposed penalties under Section 77(2) and Section 76 of the Act. On appeal by the Appellant, the Lower Appellate Authority dismissed their appeal and upheld the Order-in-Original dated 01.12.2014. Aggrieved, the Appellant is on appeal before this forum. 3. This Tribunal vide Final Order No. 42129/2018 dated 19.07.2018 kept the appeal in abeyance pending the decision of the Hon'ble Supreme Court in the case of Mineral Area Development Authority and Others Vs. Steel Authority of India Ltd. [(2011) 4 SCC 450], Union of India Vs. UTV News Ltd. [2018 (13) GSTL 3 (SC)], Home Solutions Retails India Ltd. Vs. Unio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the judgement passed by the jurisdictional High Court in the case of Cuddalore Municipality Vs. Jt. Commissioner of CGST and Central Excise and (Others) [2021 (4) TMI 500], G.V. Matheswaran Vs. UOI [2014-TIOL-2545-HC-MAD-ST] and the subsequent decision in the case of St. Thomas Mount Cum Pallavaram Cantonment Board Vs. Additional Commissioner of GST and Central Excise, Chennai decided on 23.01.2023 reported in [2023 (71) GSTL 123 (Madras)]. Relevant portions of the Tribunal, Chennai's order in the appellant's own case relating to demand of service tax under Renting of Immovable Property Service reads as follows: - "6. The issue that arises for consideration in all these appeals is whether the demands of service tax under various services including 'Renting of Immovable Property Services' are sustainable or not? The Tribunal in the appellant's own case had occasion to consider the similar issue. After taking note of the judgement passed by the Hon'ble High Court in the case of Cuddalore Municipality Vs. Joint Commissioner of GST and Central Excise, Tiruchirappalli (supra) and St. Thomas Mount Cum Pallavaram Cantonment Board Vs. Additional Commissioner of GST and Central Excise, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bathroom, washrooms, lavatories, urinal or toilets; 39. Services by a governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243W of the Constitution." 60. Thus, there is no jurisdiction in the impugned show cause notices/Orders-in-Originals issued by the respondent. In the light of the above discussion, demand proposed in the impugned S.C.N. No. 04/2018 (ST) in C. No. V/ST/15/2/2018-ST. Adjn., dated 7-3-2018 and demand confirmed in Order-in-Original No. 3/2017-ST in C. No. IV/09/04/2017-ST. Adjn. (RO OC No. 100/2016), dated 24-3-2017 and Order-in-Original No. 5/2018-ST in C. No. V/ST/15/21/2018-ST.Adj., dated 6-4-2018 are liable to be quashed and are accordingly quashed. 61. In the result, (i) W.P. No. 3969 of 2018 as mentioned above is dismissed as infructuous. (ii) W.P. No. 8900 of 2018, W.P. No. 31799 of 2017 and W.P. No. 12489 of 2007 are allowed. (iii) No cost. Consequently, connected Miscellaneous Petitions are closed." 7.2 It was held that the Government or local authority is exempted from payment of service tax on Renting of Immovable Property Services or for other services. 7.3 The above decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immovable property was brought under the Act with effect from 01.06.2007. Section 65(105) (zzzz) defines taxable service, which means any service provided to any person by any other person by renting of immovable property or any other service in relation to such renting for use in the course of or for furtherance of, business or commerce and it includes vacant land given on lease or license and the test is as to whether it is used in the course of or furtherance of business of commerce. Admittedly, the petitioner is a licensee of the first respondent Municipality and the property has been used in the course of business or commerce. As noticed above, Section 65(90a) defines renting of immovable property including renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course or furtherance of business or commerce. 15. Admittedly, the properties in question do not fall within the two exemptions provided under Section 65(90a) of the Act. Explanation 2 under Section 65(90a) makes it more clear that renting of immovable property includes allowing or permitting the use of space in an immovable property, irrespective of the transfer of pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the view that it was observed by the Hon'ble High Court in the batch case that the Municipality can pass on the burden of service tax to the tenant (recipient of service tax). The Ld. Single Judge also referred to the case of R. Nambi vs. Tenkasi Municipality [(2015) (37) S.T.R 696 (Mad.)]. The petitioner therein was a licensee of the Tenkasi Municipality and challenged the demand of service tax served by the Municipality. In these cases the taxability in general was considered. The issue as to whether local authority (Panchayat, Municipality, Corporation) would be liable to discharge service tax as these services are provided in discharge of sovereign function was not considered. The Hon'ble High Court in the case of Cuddalore Municipality (supra) has considered this specific issue. In a recent judgment, the Hon'ble High Court in the case of St. Thomas Mount Cum Pallavaram Cantonment Board Vs. Additional Commissioner of GST and Central Excise, Chennai [2023 (71) GSTL 123 (Mad.)] as referred to the decision in the case of Cuddalore Municipality (supra) and remanded the matter to consider the issue as to whether Municipality / Cantonment Board is liable to pay service tax. The rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he foregoing reasons, the impugned order dated 30-9-2022 passed by the respondent is hereby quashed and the matter is remanded back to the respondent for fresh consideration on merits and in accordance with law, within a time frame to be fixed by this Court. The respondent shall pass final orders, after giving due consideration to the orders of this Court in the cases of (a) Cuddalore Municipality v. Joint Commissioner of GST and Central Excise in W.P. No. 8900 of 2017, dated 22- 3-2021 as well as (b) St. Thomas Mount Cum Pallavaram Cantonment Board v. The Additional Directors and others in W.P. Nos. 28468 and 28080 of 2021, dated 10-8-2022, within a period of twelve weeks from the date of receipt of a copy of this order. 9. With the aforesaid directions, this writ petition is disposed of. No costs. Consequently, connected miscellaneous petition is closed." 7.5 It is represented before us that the Department has filed appeal against the decision passed by the Ld. Single Judge in the case of Cuddalore Municipality and that assessee has filed appeal against the decision passed in the case of Madurai Corporation. These appeals are pending before the Hon'ble High Court. Since, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is remanded back to the respondent for fresh consideration on merits and in accordance with law, within a time frame to be fixed by this Court. The respondent shall pass final orders, after giving due consideration to the orders of this Court in the cases of (a) Cuddalore Municipality v. Joint Commissioner of GST and Central Excise in W.P. No. 8900 of 2017, dated 22-3-2021 as well as (b) St. Thomas Mount Cum Pallavaram Cantonment Board v. The Additional Directors and others in W.P. Nos. 28468 and 28080 of 2021, dated 10-8-2022, within a period of twelve weeks from the date of receipt of a copy of this order."
10. In view thereof, following the above decisions, we are of the considered opinion that the matter requires to be remanded to the Adjudicating Authority who is directed to consider the issue afresh after giving an opportunity to the Appellant to furnish evidence and for personal hearing. All issues are left open including the issue on limitation.
11. In the result, the impugned Order-in-Appeal No. 37/2015-ST dated 19.03.2015 is set aside. The appeal is allowed by way of remand to the Adjudicating Authority on above terms.
(Order pronounced in open court on 21.01.2025) X X X X Extracts X X X X X X X X Extracts X X X X
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