Page 105 - GSTL_3rd September 2020_Vol 40_Part 1

2020 ] KARNATAKA INDUSTRIAL AREAS DEV. BOARD v. COMMR. OF CENTRAL TAX 39
(ix) CC&CE, Bhopal v. Smart Chip Ltd. [2015 (39) S.T.R. 197 (M.P.) [main-
tained by Supreme Court reported in 2015 (39) S.T.R. J243]
(x) Deputy Commissioner of Police v. CCE & ST [2017 (48) S.T.R. 275 (Tri. -
Del.)]
4.6 The next submission of the Learned Counsel for the appellant is
that appellant are not carrying out commercial activities for a consideration and
the amount of deposit collected by the appellant is based on principles of ration-
ality and reasonableness. It cannot fix prices arbitrarily. For this submission, he
relied upon the decision in the case of KIADB v. Prakash Dal Mill [2011 (6) SCC
714]. Learned Counsel also cited the Circular No. 89/7/2006-S.T., dated 18-12-
2006 issued by CBEC which provides that upon the satisfaction of the following
conditions, no service tax would be leviable : -
(a) the assessee must be a sovereign/public authority.
(b) the assessee must perform duties which are in the nature of statuto-
ry and mandatory obligation to be fulfilled in accordance with the
law.
(c) the fee collected should be levied as per the provision of relevant
law.
(d) the amount collected is to be deposited into Government treasury.
He further submitted that in spite of the above conditions, the Bombay High
Court did not consider condition (d) to be important at all in Maharashtra Indus-
trial Development Corporation case.
4.7 Learned Counsel also submitted that the entire demand is based on
the information shown in the financial accounts and notes to accounts without
considering the fact whether the said amounts are treated as income or assets in
the books of account. For this submission, he relied upon the following
decisions :-
(i) ALPA Management Consultants P. Ltd. v. CST, Bangalore [2007 (6)
S.T.R. 181 (Tri. - Bang.)]
(ii) Tempest Advertising (P) Ltd. v. CCE & C, Hyderabad [2007 (5) S.T.R.
312 (Tri. - Bang.)]
(iii) Free Look Outdoor Advertising v. CC&CE, Guntur [2007 (6) S.T.R. 153
(Tri. - Bang.)]
(iv) Synergy Audio Visual Workshop P. Ltd. v. CST [2008 (10) S.T.R. 578
(Tri. - Bang.)]
4.8 He also submitted that the deposits cannot be considered as consid-
eration for services provided and only the consideration charged towards provi-
sion of taxable service could be brought to service tax. For this submission, he
relied upon the following decisions : -
(i) Murli Realtors Pvt. Ltd. v. CCE [2015 (37) S.T.R. 618 (Tri. - Mumbai)]
(ii) Samir Rajendra Shah v. CCE [2015 (37) S.T.R. 154 (Tri. - Mumbai)]
(iii) Karad Nagar Parishad v. CCE & ST [2019 (20) G.S.T.L. 288 (Tri. -
Mum.)]
4.9 He also submitted that the demand in respect of deposits collected
for alleged services were dropped in the show cause notice pertaining to subse-
quent periods. Learned Counsel also contested the legality of demand of services

GST LAW TIMES  3rd September 2020  121