Padakanika for religious hall use was treated as donation, not taxable mandap keeper rent, under service tax law.

Receipt of Padakanika for use of a hall mainly for religious functions was treated as donation, not rent for social or commercial use. On that basis, the hall user was not regarded as a taxable Mandap Keeper under the Finance Act, 1994, because the amounts were not received for taxable social-function services. The contention that marriages and Brahmobadesams constituted social functions attracting service tax was rejected, and the service tax demand was held unsustainable.

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Issues: Whether receipt of rent or "Padakanika" for use of a hall for marriages and Brahmobadesams amounts to taxable service as a Mandap Keeper under the Finance Act, 1994.

Analysis: The hall was found to be used mainly for religious functions, and the amounts received were treated as Padakanika or donation rather than rent for social or commercial use. The contention that marriages and Brahmobadesams were social functions attracting service tax was rejected. The appellate authority had already held that the activity was not a taxable activity, and no infirmity was found in that view.

Conclusion: The receipt of Padakanika for such religious use did not make the Mutt a taxable Mandap Keeper, and the demand of service tax was not sustainable.

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