Page 106 - GSTL_3rd September 2020_Vol 40_Part 1

40 GST LAW TIMES [ Vol. 40
tax under various heads. But he submitted that if the Tribunal comes to the con-
clusion that appellant being public/State authority engaged in providing statuto-
ry function of the State and are not liable to pay service tax, then in that case, the
submissions on various taxable services may not be relevant and the entire de-
mand goes only on that account. In his written submission, which is on record,
the Learned Counsel gave detailed submissions with regard to each taxable ser-
vice along with case laws.
4.10 As far as renting of immovable property service is concerned, the
Learned Counsel submitted that constitutional validity of levy of service tax on
renting of immovable property has already been referred to Nine Judges Bench
of Hon’ble Supreme Court in the case of UOI v. UTV News Ltd. [2018 (13) G.S.T.L.
3 (S.C.)]. He also submitted that service tax has been erroneously demanded on
deposits collected by KIADB for the purpose of allotment of land. The said de-
posits are collected towards allotment of land and the same is adjusted against
the sale consideration of the land and is not rent or lease charges. He also re-
ferred to the allotment letter dated 22-3-2010 to show that there are clear demar-
cation between the amount meant for allotment and amounts meant for rent. He
further submitted that the renting of immovable property does not apply to va-
cant land. Similarly, he submitted that no service tax is leviable on one time up-
front amount. As far as construction of complex service is concerned, the
Learned Counsel submitted that the appellant does not provide construction ser-
vice rather the appellant engages independent contractors to carry out the con-
struction for the appellant. Similarly, he has contested the demand of service tax
under the head Business Support Service by saying that the appellants have not
provided any support services to any person. Further the accounting heads con-
sidered for the purpose of computation of demands itself reflects that the said
amounts are deposits towards various amenities including water supply etc. as
far as demand of service tax under the head ‘management, maintenance or repair
service’, the Learned Counsel submitted that the said amount is collected from
the industrial units for maintenance work like infrastructure, roads, water lines,
civil amenities buildings, power lines etc. and for this purpose, the appellant has
engaged independent contractors for carrying out the activities and they did not
carry out such activities personally. The entire activity of maintenance is in terms
of provisions of Section 14(c) of KIAD ACT and therefore the said function is
statutory function and cannot be amenable to service tax as held by the Bombay
High Court in the case of Maharashtra Industrial Development Corporation cited
supra.
4.11 As far as demand of service tax under the head ‘manpower re-
cruitment or supply services’, Learned Counsel submitted that the appellant did
not provide any manpower for carrying out acquisition of land. The said activity
cannot be subjected to tax under the category of manpower recruitment or sup-
ply service.
4.12 Learned Counsel also question the quantification and also raised
the argument that the appellant being a arm of the State Government, there can-
not be any question of having intention to evade payment of taxes and hence
extended period cannot be invoked and hence penalty cannot be imposed.
5.1 On the other hand, the Learned Special Counsel appearing for the
Revenue reiterated the findings of the impugned order. He also filed written
submissions. In the written submissions, he referred to relevant provisions of the
KIAD Act relating to the functions and powers of the appellant. He further sub-
GST LAW TIMES  3rd September 2020  122