Court dismisses writ challenging service tax demand on Transferable Development Rights

The Court dismissed the writ petition challenging the appellate authority's order allowing service tax demand on Transferable Development Rights (TDR). The Court held that the TDR was not in the petitioner's name and they were not the title holder, acting merely as a facilitator in the transaction. As statutory provisions provided a remedy to challenge the order, the Court found no grounds for interference and granted the petitioner liberty to appeal before the Appellate Tribunal within two weeks.

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Issues involved:
Challenge to appellate authority's order allowing service tax demand on TDR considered as immovable property for service tax purposes.

Analysis:
The petitioner challenged the appellate authority's order dated 04.12.2017, which allowed the appeal filed by the Department, confirming the service tax demand on Transferable Development Rights (TDR) along with applicable interest. The petitioner argued that since the TDR was registered in their name, it should be considered as an immovable property falling outside the purview of service tax. The petitioner contended that the Appellate Authority failed to consider this crucial point, justifying the intervention of the Court under Articles 226 and 227 of the Constitution of India.

Upon reviewing the arguments presented by the petitioner, the Court examined the appeal order and noted that the TDR was not issued in the name of the petitioner, nor were they the title holder of the TDR at any point during the transaction. The TDR always remained in the name of the seller (land owner) to whom it was issued. The Court observed that the petitioner merely acted as a 'confirming party' in the buying and selling of TDR, serving as a facilitator between the buyer and seller. The Court emphasized that if the findings of the Appellate Authority were to be challenged, the proper course of action would be to appeal before the Appellate Authority itself, as the statutory provisions provided a complete machinery for such disputes.

Consequently, the Court found no grounds to interfere with the impugned order at the current stage, especially when an alternative and effective remedy was available under the statute. The writ petition was dismissed, granting the petitioner the liberty to file an appeal before the competent Appellate Tribunal within two weeks from the receipt of the order. The Court left all rights and contentions of the parties open to be adjudicated by the Tribunal, instructing the Tribunal to hear the parties and issue appropriate orders promptly and in accordance with the law.

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