Page 60 - GSTL_20th August 2020_Vol 39_Part 3

274 GST LAW TIMES [ Vol. 39
7. The Learned AR specifically contested the findings of the Tribunal in
Greater Noida Industrial Development Authority (supra) as recorded in para
10.1 of the order. He submitted that having recorded that the consideration
may be either premium or rent or both, for lease transaction, the Tribunal
referred to the decision of Hon’ble Supreme Court in Panbari Tea Company
Ltd. - 1965 (3) SCR (811) to distinguish between premium and rent. It was
recorded that the premium or salami is towards a price for parting with the
interest on land and the periodical payment is in the nature of rent. The
former is a capital income and a latter is revenue receipt. The premium is a
price paid for obtaining the lease of an immovable property. The Learned
AR submitted that the treatment of Income-tax Act with reference to vari-
ous types of incomes has no direct relevance while considering the provi-
sions of Section 67 of the Finance Act, 1994. The provisions of Income-tax
Act are having specific scope, purpose and intend, as decided by the legis-
lature. The same cannot be referred to for deciding taxable value with refer-
ence to Service Tax which is entirely on a different footing. Section 67 does
not provide for such split up of consideration for service. In fact, the Gov-
ernment provided for partial exemption of consideration received, in long
term lease arrangement, by issuing Notification No. 41/2016-S.T., dated 22-
9-2016. The said notification exempts Service Tax leviable on one time up-
front amount (called as premium, salami, cost, price, development charges
or by other name) payable for such lease. As such, it is clear that prior to 22-
9-2016 the said amount is liable to Service Tax.’
10. It cannot also but be noticed that in re Greater Noida Industrial Devel-
opment Authority there is no lack of clarity in the assertion of the Tribunal that
‘10.1. ….. Since the levy of Service Tax is on renting of immovable property,
not on transfer of interest in property from lesser to lessee, Service Tax
would be chargeable only on the rent whether it is charged periodically or
at a time in advance.’
before going on to render the finding that
‘In these appeals, in the show cause notice dated 19-3-2012 issued by Addl.
Director, DGCEI, New Delhi, Service Tax has been demanded only on the
lease rent and not on the premium amount while in the subsequent show
cause notice dated 17-10-2012 issued by the Commissioner of Central Excise
and Service Tax, Noida, the amount of premium has also been included in
the lease rent for the purpose of charging of Service Tax for which no valid
reasons have been given. Therefore, the Order-in-Original dated 30-4-2013
confirming the Service Tax demand on the premium amount is not correct
and to this extent, the Service Tax amount would not be sustainable.’
It appears that the principle of taxability that found favour was discarded in cir-
cumstances peculiar to that case and, the absence of challenge in such circum-
stances, is not to be presumed as acceptance of a contrary proposition. We, there-
fore, do not find any contradiction between the two decisions of the Tribunal
warranting a different conclusion.
11. Accordingly, the lump sum payment becomes liable to tax under
Finance Act, 1994 in addition to the periodic payments. For this reason, we find
no merit in the appeal which is dismissed.
(Order pronounced in the open Court on 11-11-2019)

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