Sale of seller-developed plots is an immovable-property transfer, while extended limitation requires proven intent to evade tax.

Sale of seller-developed plots constitutes a transfer of immovable property, not taxable Site Formation and Development Service, where development is undertaken before sale and no service is rendered to purchasers. Advances received under a flat-sale scheme did not alter this character where flats were not sold and the advances were refunded or adjusted against plot sales. Extended limitation requires evidence of fraud, wilful misstatement, suppression, clandestine activity, or deliberate intent to evade tax; mere non-payment, delayed filing, or an interpretative difference is insufficient. Accordingly, the demand was time-barred and the related interest and penalties were set aside.

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Issues: (i) Whether amounts received towards sale of developed plots, including advances originally received under a flat-sale scheme, were taxable as Site Formation and Development Service; (ii) Whether the extended period of limitation could be invoked for the service-tax demand and consequential penalties.

Issue (i): Whether amounts received towards sale of developed plots, including advances originally received under a flat-sale scheme, were taxable as Site Formation and Development Service.

Analysis: Service tax under the charging provision applied only to services. The statutory definition excluded a transfer of title in immovable property by sale. The negative-list regime also excluded trading in goods. The evidence established that agricultural land was developed and sold as plots, while no material disproved that flats were never sold and advances were refunded or adjusted towards plot sales. Development undertaken before sale formed part of the sale of the developed immovable property and was not a service rendered to purchasers.

Conclusion: Receipts towards sale of developed plots were not consideration for taxable Site Formation and Development Service; the demand was unsustainable, in favour of the assessee.

Issue (ii): Whether the extended period of limitation could be invoked for the service-tax demand and consequential penalties.

Analysis: The relevant information was available in statutory records and the balance sheet, and returns had been filed with only brief delay. No evidence established clandestine activity, fraud, wilful misstatement, suppression of facts, or deliberate intent to evade tax. Mere non-payment or a departmental interpretative difference could not justify the extended limitation period.

Conclusion: Invocation of the extended period was invalid and the show-cause notice was time-barred; consequential penalties on the company and its directors could not survive, in favour of the assessee.

Final Conclusion: The impugned demand, interest, late-filing penalty and penalties imposed upon the company and co-noticees were set aside.

Ratio Decidendi: Sale of land developed by the seller constitutes transfer of immovable property rather than a taxable service, and extended limitation requires proof of a deliberate act to evade tax beyond mere non-payment or delayed filing.

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