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2020 ] KARNATAKA INDUSTRIAL AREAS DEV. BOARD v. COMMR. OF CENTRAL TAX 45
17. Directions by State Government. - The State Government may issue
to the Board such directions of a general nature as it may think necessary or
expedient for the purpose of carrying out the purposes of this Act, and the
Board shall be bound to follow and act upon such directions.
18. Application of Board’s assets. - All property, fund and other assets
vesting in the Board shall be held and applied by it, subject to provisions
and for the purposes of this Act.
19. Board’s fund. - The Board shall have and maintain its own fund, to
which shall be credited, -
(a) all moneys received by the Board from the State Government
by way of grants, loans, advances or otherwise;
(b) all fees, costs, deposits and charges received by the Board un-
der this Act;
(c) all moneys received by the Board from the disposal of lands,
buildings and other properties movable and immovable, and
from other transactions;
(d) all moneys received by the Board by way of rents or in any
other manner or from any other source.
24. Accounts and Audit. - (1) The Board shall maintain books of account
and other books in relation to its business and transactions in such form,
and in such manner, as may be prescribed.
(2) The accounts of the Board shall be audited by an Auditor appointed by
the State Government.
(3) As soon as the accounts of the Board are audited, the Board shall send
to the State Government, -
(a) a copy of the audited accounts, and
(b) an annual report of the working of the Board for the financial
year concerned giving an account of the activities of the Board
and such other particulars as may be prescribed, and
(c) a report of the Auditor on the audited accounts of the Board.
(4) The State Government shall cause the audited accounts of the Board
together with the audit report thereon, and the annual report forwarded to
it under sub-section (3) to be laid before each House of the State Legislature
as soon as may be after their receipt by the State Government.
7.2 The true character/scope and intent of the Act is to be ascertained
with reference to the purposes and the provisions of the Act. The Act is one to
make a special provision for securing orderly establishment of industrial areas
and industrial estates in the State of Karnataka and for that purpose, to establish
the board. A careful reading of the aforesaid provisions of KIAD Act and KIADB
Regulations would clearly go to show that the appellant is a State undertaking
and creature of a statute to exercise the power of ‘eminent domain’. The appel-
lant is engaged in discharging statutory functions under an act of Legislature viz.
KIAD Act, 1966. It is a statutory body performing statutory functions and exer-
cising statutory powers. Once carrying out the objectives of the Act, then it can-
not be treated as a service provider under the Finance Act, 1994. Further we find
that there is no service provider-client relationship so as to warrant the levy of
service tax under the provisions of Finance Act, 1994. Appellant has undertaken
various activities and functions in the State of Karnataka as per the directions of
the State Government given from time to time under the provisions of the Act
GST LAW TIMES  3rd September 2020  127