Page 121 - GSTL_3rd September 2020_Vol 40_Part 1

2020 ] KARNATAKA INDUSTRIAL AREAS DEV. BOARD v. COMMR. OF CENTRAL TAX 55
held that the appellants performed the service of fund management. One
crucial aspect, missed by the Original Authority, is fund which is managed
by the appellant is to the benefit of employees whose welfare is entrusted to
the appellant, by law. The employers do not get any benefit out of such
fund management. The administrative charges and other charges paid by
the employers, therefore cannot be attributed to any service received by
them from the appellant. As already noted, the employers have no choice
and are compulsorily mandated by law to contribute to the fund and also
pay the administrative charges/inspection charges, etc., in terms of the
EPMF & MP Act. The employees who ultimately benefit, have not paid any
consideration to the appellant. They only contributed their part of fund,
through the employer, to the appellant. The contribution to the fund is not
the subject matter of disputed tax liability. The other charges like adminis-
trative charges, inspection charges paid by the employers, are being sub-
jected to service tax. We find that in the absence of a service provider and
service recipient relation between the appellant and the employers, no ser-
vice tax liability can arise in the transaction.
20. Having examined the impugned orders, the submissions made by
both the parties before us, closely, we find that the appellants are not liable
to pay service tax on their statutory activities performed in terms of EPMF
& MP Act, 1952. The appellants are not providing any taxable service to the
employers covered by the said Act. The relationship and transaction be-
tween the employers and the appellant is in discharge of statutory and
compulsory obligations, coercively enforceable by the law. The considera-
tions sought to be taxed are statutorily fixed, mandated fees and charges.
No option exists with the appellant or contributor to vary such ‘Fees’ or
‘charges’. As such, we find no taxable element in such transaction. This
conclusion is supported by Board’s clarification dated 18-12-2006 (supra).
The impugned orders are without merits and are not legally sustainable.
Accordingly, we set aside the same and allow the appeals filed by the ap-
pellant.
Further it is seen that the above said case has been upheld by the Apex Court as
reported in 2018 (18) G.S.T.L. J215 (S.C.).
8. In view of our discussion above, we are of the considered opinion
that the appellant is a statutory body discharging the statutory function as per
the statute KIAD Act, 1966 and hence are not liable to pay service tax in view of
the ratios of the various decisions cited supra. Since we have held that appellant
is not liable to pay the service tax at all, we do not consider it appropriate to dis-
cuss the demand of service tax on individual services allegedly rendered by the
appellant on which the Learned Commissioner has confirmed the demand. In the
result, by following the ratios of the Hon’ble Apex Court in the case of Shri Ram-
tanu Housing Co-operative Society Ltd., Hon’ble Bombay High Court in the case of
MIDC and the Tribunal’s decision in the case of Employee Provident Fund Organi-
sation (upheld by Apex Court) cited supra, we set aside the impugned order by
allowing the appeal of the appellant.
(Order was pronounced in open Court on 9-6-2020)

________

GST LAW TIMES  3rd September 2020  137