Page 108 - GSTL_3rd September 2020_Vol 40_Part 1

42 GST LAW TIMES [ Vol. 40
appellant is not empowered to exercise the power of ‘eminent domain’ and hence
it cannot be regarded as sovereign authority, Learned Special Counsel further
submitted that the decision of the Bombay High Court affirmed the decision of
the Tribunal in the case of Maharashtra Industrial Development Corporation cited
supra is not the law of the land and there is a contrary judgment on the issue of
liability of service tax of instrumentalities of State rendered by the Allahabad
High Court in the case of Greater Noida Industrial Development Authority v. CC,CE
[2015 (40) S.T.R. 95 (All.)] and the copy of the said judgment has also been placed
on record. He further submitted that the Hon’ble Bombay High Court and the
Hon’ble CESTAT while relying on the Circular No. 89/7/2006, dated 18-12-2006
did not take into account the fact that in the case of Maharashtra Industrial Devel-
opment Corporation, the ‘maintenance, management and repair charges’ were not
in the nature of a compulsory levy and the amount collected under that head
were not deposited in the Government Treasury of the Government as specified
in the Circular. Such sums were credited to Maharashtra Industrial Development
Corporation’s own account. The Learned Special Counsel also submitted that the
decision of the Tribunal in the case of Employees Provident Fund Organisation is
not applicable in the present case. He made submissions with regard to the justi-
fication of demanding service tax on various services viz. renting of immovable
property, construction of commercial and residential complexes, Business Sup-
port Services, Management, Maintenance or Repair Services and Manpower Re-
cruitment and Supply Services, Works Contract Service etc. and reiterated the
findings of the impugned order.
6. The Learned Counsel appearing for the appellant filed a reply to the
additional submissions by the Department wherein he has replied to all the ob-
jections raised by the Revenue and reiterated the decision of the Apex Court in
the cases of Balmer Lawrie & Co. Ltd., MD, HSIDC v. Hari Om Enterprises and
Jilubhainanbhai Khachar v. State of Gujarat cited supra to submit that there is no
doubt that the power of ‘eminent domain’ to render the appellant as sovereign.
He also submitted that the Revenue’s reliance upon the judgment of the Hon’ble
Allahabad High Court is wrong because the said judgment of the Allahabad
High Court has been stayed by the Hon’ble Apex Court as reported in 2015 (40)
S.T.R. J231 (S.C.) and cannot be relied upon by this Tribunal as binding prece-
dent.
7.1 After considering the submissions of both the parties and perusal of
the material on record and written submissions of both the parties and the vari-
ous decisions relied upon by them, we find that the crucial question in the instant
case is whether at all the appellant, which is a statutory authority (KIADB) con-
stituted under the KIAD Act for carrying out the purposes, is providing any ser-
vice as defined in the Service Tax legislation (Finance Act, 1994). If, after analyz-
ing the various provisions of the KIAD Act and the submissions of the parties,
we come to the conclusion that there is no service being rendered by the appel-
lant as argued by the Learned Counsel for the appellant, then the question of
levy of service tax would not arise. In order to examine the contentions advanced
by Learned Counsel/Learned Special Counsel for the parties, it is necessary to
note the provisions of the KIAD Act, 1966 and the preamble of the said Act,
which are reproduced below :-
Preamble :-
An Act to make special provisions for securing the establishment of indus-
trial areas in the State of Karnataka and generally to promote the establish-
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