Service tax on real estate agent service not attracted where receipts lacked an independent agency or consultancy element.

Activities that are, in substance, trading in land or development work do not fall within real estate agent service where no separately identifiable agency or consultancy consideration exists. Amounts collected as demand survey deposits, being adjustable or refundable against the property price or in the event the transaction fails, do not by themselves create a taxable service element. Cancellation charges treated as penal receipts, and miscellaneous income with no independent service component, are likewise outside service tax. On these facts, the High Court found no legal error in the Tribunal's approach and held that no substantial question of law arose, leaving the demand dropped.

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Issues: Whether the respondent's activities in relation to allotment rights, demand survey amounts, cancellation charges and miscellaneous receipts attracted service tax as real estate agent services, and whether any substantial question of law arose from the Tribunal's order.

Analysis: The Tribunal's findings were based on settled principles that where the transaction is in substance trading in land or development activity without a separately identifiable consideration for agency or consultancy, the activity does not fall within the scope of real estate agent service. The deposit collected towards demand survey was treated as an adjustable or refundable amount linked to the eventual property price or refund in case the deal did not materialise. Cancellation charges were treated as penal in nature for non-fulfilment of commitments, and the miscellaneous income was found to have no independent service element. On these facts, the High Court found no legal error in the Tribunal's approach and held that no substantial question of law arose.

Conclusion: The levy of service tax was not attracted on the respondent's activities, and the challenge to the Tribunal's order failed.

Final Conclusion: The appeal was not entertained and the Tribunal's order dropping the demand was left undisturbed.

Ratio Decidendi: A transaction amounting in substance to trading in land or development activity, without a distinct remunerated agency or consultancy service, does not attract service tax as real estate agent service; ancillary refundable or penal receipts without an independent service element are likewise not taxable.

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