Statutory levy for industrial estate maintenance is not taxable service when collected in discharge of mandatory functions.

Service tax was held not leviable on charges collected by a statutory industrial estate authority for maintenance, management and repair of roads, water supply, street lighting, drainage and sewerage within the estate. The activities were treated as statutory obligations performed within the authority's mandate, and the collections were characterised as a compulsory levy rather than consideration for a taxable service. As the same issue had already been decided in the assessee's favour, the tax demand could not stand and was set aside.

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Issues: Whether service tax was leviable on service charges collected by MIDC for maintenance, management and repair of industrial estate amenities such as roads, water supply, street lighting and drainage, when such activities were performed as part of its statutory functions.

Analysis: MIDC is constituted to establish, manage and maintain industrial estates and to provide amenities within those estates. The amenities in question, including roads, water supply, street lighting, drainage and sewerage, fall within the statutory framework governing MIDC's functions. The charges collected from plot holders were for discharging these statutory obligations and were in the nature of a compulsory levy, not consideration for a taxable service rendered outside the statutory sphere. The identical issue had already been decided in the assessee's favour, and the earlier judicial determination confirmed that no service tax could be levied on such statutory activities.

Conclusion: Service tax was not leviable on the impugned service charges, and the demand was unsustainable.

Final Conclusion: The appeal was allowed and the order confirming the tax demand was set aside because the collections were held to be part of MIDC's statutory functions rather than taxable services.

Ratio Decidendi: Fees collected by a statutory public authority for activities performed in discharge of mandatory statutory functions constitute a compulsory levy and do not amount to consideration for taxable service.

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