TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1272
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....ease of lands, rent on shopping complex, rent on community halls, rent on buildings, fee on pay and use toilets, rent from travelers' bungalow and rest house, avenue receipts, other fee, copy application fee, receipts from hospitals and dispensaries, miscellaneous recoveries, cable TV income collected by the appellant. After due process of law, the original authority confirmed the demand, interest and imposed penalties. On appeal, Commissioner (Appeals) upheld the orders of original authority. Aggrieved by such order, the appellant is now before the Tribunal. 3. The Ld. Consultant Shri R. Balagopal appeared and argued for the appellant. It is submitted that being a municipality, the appellant had provided services / facilities while discharging sovereign functions and therefore the levy of the service tax cannot be sustained. Though the appellant had put forward this contention before the adjudicating authority, the same has been decided in favour of the department observing that the municipalities are not discharging sovereign function while providing services. The appellant has been constituted and established by the State Legislature which is Municipalities Act. The appellant t....
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.... The Ld. Counsel prayed that the matters may be remanded. 4. The Ld. A.R Smt. Rajni Menon appeared for the Department. She submitted that appellant has let out shops and other premises to individuals and are receiving rental charges. The said activity would fall under the definition of 'Renting of Immovable Property Services' and the demand has been correctly proposed and confirmed by the Department. Certain fees and other charges collected by the appellant are for slaughter house, bus stand, public toilet, etc. These activities cannot be said to be Sovereign functions. The appellant has not furnished correct details of the amounts collected by them in spite of written request. It is submitted that the demand confirmed is legal and proper. 5. We have Heard both sides and perused the Appel Memorandum and connected records. 6. The issue that arises for consideration in this appeal is whether the demands of service tax under various services including 'Renting of Immovable Property Services' are sustainable or not? The Tribunal in the appellant's own case had occasion to consider a similar issue. After taking note of the judgement passed by the Hon'ble High Court in the case of Cud....
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....ervices by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets; 39. Services by a governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243W of the Constitution. 60. Thus, there is no jurisdiction in the impugned show cause notices/Orders-in-Originals issued by the respondent. In the light of the above discussion, demand proposed in the impugned S.C.N. No. 04/2018 (ST) in C. No. V/ST/15/2/2018-ST. Adjn., dated 7-3-2018 and demand confirmed in Order-in-Original No. 3/2017-ST in C. No. IV/09/04/2017-ST. Adjn. (RO OC No. 100/2016), dated 24-3-2017 and Order-in-Original No. 5/2018-ST in C. No. V/ST/15/21/2018-ST.Adj., dated 6-4-2018 are liable to be quashed and are accordingly quashed. 61. In the result, (i) W.P. No. 3969 of 2018 as mentioned above is dismissed as infructuous. (ii) W.P. No. 8900 of 2018, W.P. No. 31799 of 2017 and W.P. No. 12489 of 2007 are allowed. (iii) No cost. Consequently, connected Miscellaneous Petitions are closed." 7.2 It was held that the Government or local authority is exempted from payment of service tax on Renting of I....
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....ies as regards the jurisdiction to levy the service tax. 14. Renting of immovable property was brought under the Act with effect from 01.06.2007. Section 65(105) (zzzz) defines taxable service, which means any service provided to any person by any other person by renting of immovable property or any other service in relation to such renting for use in the course of or for furtherance of, business or commerce and it includes vacant land given on lease or license and the test is as to whether it is used in the course of or furtherance of business of commerce. Admittedly, the petitioner is a licensee of the first respondent Municipality and the property has been used in the course of business or commerce. As noticed above, Section 65(90a) defines renting of immovable property including renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course or furtherance of business or commerce. 15. Admittedly, the properties in question do not fall within the two exemptions provided under Section 65(90a) of the Act. Explanation 2 under Section 65(90a) makes it more clear that renting of immovable property includes allowing or permitting the ....
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....rai Corporation, the Ld. Single Bench Judge sustained the demand mainly on the view that it was observed by the Hon'ble High Court in the batch case that the Municipality can pass on the burden of service tax to the tenant (recipient of service tax). The Ld. Single Judge also referred to the case of R. Nambi vs. Tenkasi Municipality [(2015) (37) S.T.R 696 (Mad.)]. The petitioner therein was a licensee of the Tenkasi Municipality and challenged the demand of service tax served by the Municipality. In these cases the taxability in general was considered. The issue as to whether local authority (Panchayat, Municipality, Corporation) would be liable to discharge service tax as these services are provided in discharge of sovereign function was not considered. The Hon'ble High Court in the case of Cuddalore Municipality (supra) has considered this specific issue. In a recent judgment, the Hon'ble High Court in the case of St. Thomas Mount Cum Pallavaram Cantonment Board Vs. Additional Commissioner of GST and Central Excise, Chennai [2023 (71) GSTL 123 (Mad.)] as referred to the decision in the case of Cuddalore Municipality (supra) and remanded the matter to consider the issue as to whet....
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....ance with law within a timeframe to be fixed by this Court. 8. For the foregoing reasons, the impugned order dated 30-9-2022 passed by the respondent is hereby quashed and the matter is remanded back to the respondent for fresh consideration on merits and in accordance with law, within a time frame to be fixed by this Court. The respondent shall pass final orders, after giving due consideration to the orders of this Court in the cases of (a) Cuddalore Municipality v. Joint Commissioner of GST and Central Excise in W.P. No. 8900 of 2017, dated 22- 3-2021 as well as (b) St. Thomas Mount Cum Pallavaram Cantonment Board v. The Additional Directors and others in W.P. Nos. 28468 and 28080 of 2021, dated 10-8-2022, within a period of twelve weeks from the date of receipt of a copy of this order. 9. With the aforesaid directions, this writ petition is disposed of. No costs. Consequently, connected miscellaneous petition is closed." 7.5 It is represented before us that the Department has filed appeal against the decision passed by the Ld. Single Judge in the case of Cuddalore Municipality and that assessee has filed appeal against the decision passed in the case of Madurai Corporati....