Page 114 - GSTL_3rd September 2020_Vol 40_Part 1

48 GST LAW TIMES [ Vol. 40
yana has been constituted, the function discharged by the Corporation
must be held as Governmental function.
14. MIDC is a statutory Corporation which is virtually a wing of the State
Government. It discharges several sovereign functions. In our view, the
Revenue ought not to have compelled MIDC to prefer Appeals before Ap-
pellate Tribunal. Not only that MIDC was driven to prefer Appeals before
the Appellate Tribunal, these groups of Appeals were preferred by the Rev-
enue. Needless to add that MIDC was required to incur huge expenditure
on litigation. All this could have been avoided by the Appellant.
When the maintenance of industrial area itself is held to be statutory function,
then the main function of acquisition of law, development of such land into in-
dustrial area and allotment of such land on lease-cum-sale basis by the appellant
would certainly be a statutory function and does not attract levy of service tax.
On the same analogy, we hold that other functions being incidental cannot be
brought into tax net.
7.5 Further we find that in order to counter the decision of the Bombay
High Court, the Learned Special Counsel for the Revenue relied upon the deci-
sion of the Allahabad High Court in the case of Greater Noida Industrial Develop-
ment Authority wherein the Allahabad High Court held that if the sover-
eign/public authority provides a service, which is not in the nature of statutory
activity and the same is undertaken for a consideration (not statutory fee), then
in such cases, service tax would be leviable as long as the activity undertaken
falls within the scope of a taxable service as defined in Finance Act, 1994. This
decision of the Allahabad High Court, on which the Revenue has heavily relied
upon, has been stayed by the Hon’ble Supreme Court as reported in 2015 (40)
S.T.R. J231 (S.C.). A copy of the Stay Order has been produced by the Counsel for
the appellant, while issuing notice in the petition, the Supreme Court passed the
following order :-
“Notice.
There shall be interim stay of the impugned judgment and order passed by
the High Court of Allahabad in CEA No. 54/2015, dated 30-3-2015.”
Hence the said judgment cannot be relied upon by the Revenue to counter the
claim of the appellant. Moreover in the present case, the appellant is indeed un-
dertaking statutory activities as set out in Section 13 of KIAD Act viz. ensuring
establishment of industrial areas in the State and providing industrial infrastruc-
ture facilities and amenities therein. Further in doing so, the appellant also has
powers to make available the land and building on lease or sale or lease-cum-sale
to industrialists, construct buildings for usage of employees of the industries etc.
as set out in Section 14 of the KIAD Act. Further the amounts collected are for the
facilities and amenities rendered and these charges cannot be called as considera-
tion of the service. We find that the Apex Court in the case of KIADB and Anr. v.
Prakash Dal Mill and Others [(2011) 6 SCC 714] in paras 19, 23 to 25 observed that
the amount of fees and deposits collected by the KIADB is based on principles of
rationality and reasonableness. It cannot fix prices arbitrarily. Fixation of price by
the Board is always under the authority of law. We also find that the decision of
the Bombay High Court in the case of Builders Association of Navi Mumbai [2018
(12) G.S.T.L. 232 (Bom.)] relied upon the decision of the Allahabad High Court to
hold that CIDCO (as established under the Maharashtra Regional and Town
Planning Act) is not a statutory function. Since the decision of the Allahabad

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