Page 82 - GSTL_30th April 2020_Vol 35_Part 5

568 GST LAW TIMES [ Vol. 35
could not be treated towards the value of service provided by the appellant. The
Revenue has not taken pain to segregate as to what is the value of the service
component involved in the transaction. The treatment of entire amount that has
been spent towards the acquisition of land, by no stretch of imagination, can be
treated as value towards the alleged service. The Revenue has also failed to find
out the actual value for the alleged services rendered for grant of surface right,
even though not acceptable, to us in view of our findings as mentioned above. In
this regard, we find that the identical issue has come up for consideration though
in different context regarding sale of ‘developmental right’ in case of DLF Com-
mercial Project v. Commissioner of Service Tax, Gurgaon - 2019-TIOL-1514-CESTAT,
CHD = 2019 (27) G.S.T.L. 712 (Tri. - Chan.), wherein it has been held that the de-
velopment right is benefit arising out of land and therefore, the same is not
chargeable to service tax. The relevant paragraphs of the decision are extracted as
under :-
“14. Now, we deal with the legal aspect of the case. Section 65B(44) of the
Finance Act, 1994 defines the services and excluded certain activities which
are as under :-
any activity which constitutes merely -
(i) a transfer of title in goods or immovable property, by way of
sale, gift or in any other manner; or
(ii) such transfer, delivery or supply of any goods which is
deemed to be a sale within the meaning of clause (29A) of Ar-
ticle 366 of the Constitution, or
(iii) a transaction in money or actionable claim;”
As per the said provisions, the transfer of title in goods or immovable prop-
erty, by way of sale, gift or in any other manner is not a service and no ser-
vice tax is payable thereon.
15. As immovable property has not been defined in the Finance Act, 1994,
therefore, as per Section 3(26) of the General Clauses Act, 1897, the immov-
able property means as under :-
(26) ”Immovable property” shall include land, benefits to arise out of
land, and things attached to the earth, or permanently fastened to anything
attached to the earth;
16. On going through the said definition, the immovable property in-
cludes land benefit arising out of land can be equated to transfer of devel-
opment rights of the land, therefore, it is to be seen in the legal aspect
whether the benefit arising out of land can be equated to transfer of devel-
opment rights of land or not?
The said issue has been examined by the Hon’ble Allahabad High Court in
the case of Bahadur and Others v. Sikandar and Others wherein the Hon’ble
Apex Court observed as under :-
“Therefore, the principal question we have to consider is whether the right
to collect dues upon a given piece of land, the property of the alleged lessor,
is a benefit to arise out of land within the purview of Section 3 of the Reg-
istration Act. In our opinion, the right to collect dues upon a given spot is
such a benefit, and therefore, we are constrained to find that the document
in question purported to convey that which falls within the definition of
immovable property. The so-called lease being an unregistered instrument,
it could not effect the transfer and could not be admissible in evidence. We
are therefore of opinion that the Court of first instance was right. We set
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