2024 (11) TMI 1138

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....ujarat Urja Vikas Nigam Ltd (GUVNL) as it's wholly owned subsidiary in the context of liberalization and as a part of efforts towards restructuring of the Power Sector. GSECL has initiated its activities in the field of generation of power. M/s. GSECL, Ukai unit was engaged in the generation of electricity from their Thermal Power Station & Hydel Power plant situated at Ukai, Songadh, Gujarat. The appellant has constructed staff quarters for the facilitation of their employees & their family members situated in the colony at Ukai, Songadh. The staff quarters were also provided on rent to the employees of the contractors for their residential purposes until the completion of the contract. The case of the department is that the said renting o....

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.... records. We find that the appellant have given their residential quarters to the employee of contractor for residential purpose. It is admitted fact that the residential quarters are not used for any commercial purpose whereas, the same is used for only residential purpose. As submitted by the appellant the renting of residential quarter is listed in the negative list which is reproduced below:- "Section 66 D (m) of the Finance Act, 1994 (m) services by way of renting of residential dwelling for use as residence." The plain reading of the above service under negative list it is absolutely clear that any residential house given on rent for use as residence is not taxable service. In the facts of the present case, even t....

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.... find such interpretation is not tenable. Such inference will virtually cover large number of pure residential accommodations under the tax net of renting of immovable property only on the ground that the person occupying the residential accommodation happens to be involved in business or commerce. We are of the opinion that the actual usage of the property for a particular purpose will decide the nature, either 'residential' or used in 'furtherance of commerce or business'. The nature of contracting parties or the occupation of the occupant has no relevance to decide the scope of the tax entry. 8. In view of the above discussion and findings, we hold that the impugned orders upholding the tax liability of the appellant are not leg....