TaxTMI 
TaxTMI 
2025 (9) TMI 1537
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....otels P. Limited. 2. Brief facts are that the State Government appointed the Appellant to act as Nodal Agency for leasing out land adjoining Mansagar Lake under Jal Mahal Tourism Project. On conclusion of the bidding process, the said land was leased out to M/s. Jal Mahal Resorts Pvt. Ltd. [JMRPL] vide Agreement dated 22.11.2005. The lease rental money was credited in a separate Escrow Account maintained with Indian Bank, vide a separate license Agreement dated 22.11.2005. The Jal Mahal Monument was also leased out at license fee of Rs.1 Per Annum to M/s. JMRPL under a specific agreement that the Monument shall not be used for commercial purpose. The Appellant being the Nodal Agency was authorized by Department of Tourism to lease Tijara Fort to M/s. Neemrana Hotel Pvt. Ltd. New Delhi in 2009, against Lease amount of Rs.6,00,000/- per annum. The clearance was finally granted vide Order dated 09.11.2015. Information was gathered by officers of DGCEI, Jaipur, Regional Unit that considerable amount has been received by the Appellant on account of renting out of Tijara Fort and 100 acres of land around Mansagar Lake, but Service Tax thereon had not been paid. Enquiries were conducte....
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....ed by the Chief Secretary, State of Rajasthan. 4. Learned counsel further submitted that the Hon'ble Supreme Court in the judgment dated 25.04.2014 has observed as follows:- "The deteriorating condition of the Lake and the Monument compelled the Government to find ways and means to restore the two components to their original glory" 4.1 He contended that over 30 years, attempts were made by various Government agencies and departments to restore the ecological and environment condition of the lake and its adjoining area. However, none of these attempts yielded very positive results because of paucity of resources to take up and sustain the restoration. Learned counsel further submitted that the benefits of the project would result in the restoration of the Mansagar Lake and the Jal Mahal monument, and development of eco friendly tourism. Learned counsel relied on the Delhi High Court judgment in the case of Home Solution Retail India Ltd vs. UOI & Ors-WP (C). 1659/2008 in support of his contention that no service tax was liable to be paid on the renting of immovable property service. "35. From this analysis, it is clear that we have to understand as....
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....ctions under the directions of the State Government of Rajasthan under PPP [Public Private Partnership] concept, as is evident from para 27, and 28 of the Apex Court judgment. Further, he stated that the Supreme Court in its judgment dated 25.04.2014 (supra), the petitioner had contended that MoEF [Ministry of Environment and Forest] had granted administrative approval and expenditure sanctioned only for the lake restoration components and there was absolutely no consideration by the MoEF to the lake side development component of the Jal Mahal Tourism Project. Further it is a fact that the National Lake Conservation Plan did not contemplate any such commercial venture on the lakes to be restored under the plan. Hence, learned counsel stated that the State Government had authorized the appellant to undertake the project. 6. Learned counsel further stated that despite the Apex Court judgment brought on record, and the pleas made during the course of hearing, the facts submitted in course of the investigation, the adjudicating authority had passed a non speaking and ex parte order by overlooking the relied upon documents. Further, he stated that the demand had been confirmed under ....
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....lso submitted that the appellant was registered with the service tax department and despite that they had provided taxable services without discharging service tax. Further, the appellant had failed to inform the taxable receipts from M/s. Neemrana Hotels Pvt Ltd and M/s. Jal Mahal Resorts Pvt Ltd, thus had deliberately suppressed the value with an intent to evade payment of tax. Consequently, the extended period under proviso of Section 73(1) of the Act had been correctly invoked. In light of the above, he is prayed that the appeal may please be dismissed. 9. We have heard Shri Shafiq Khan, learned counsel for the appellant and Shri Manoj Kumar, learned authorised Representative for the department. The issue for consideration is whether the appellant is liable to pay service tax on the renting of immovable property in respect of Jal Mahal Tourism Project and Tijara Fort to M/s Neemrana Hotel Pvt. Ltd. A quick recap of the facts are that the Revenue issued Show Cause notice dated 21.04.2014 demanding service tax of Rs. 1,52,99,438/- for the period 1.10.2008 to 31.03.2014. As regards the Jal Mahal and Mansagar project, the matter was under litigation and it was settled vide the S....
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.... of 30 years which shall commence from the date of this judgment and order and may be extended by the State Government for such other period as may be considered legally viable based on the rules and regulations at the relevant period........." 11.2 In this context, we note that the impugned order has held that the appellant had raised the invoice for the service indicating that the service had been provided by the appellant. In order to consider this position taken by the Commissioner, we need to understand what is taxable service. For a service to be taxable, there has to be service provider, service recipient, taxable service provided with the taxable territory for a consideration. In this context, we note that under the Finance Act, 1994, a taxable service refers to any service on which service tax is leviable as specified in Section 65(105) (prior to 2012) and, thereafter, under Section 66B of the Act. This means any activity carried out by a person for another for consideration, including declared services, except for those listed in the "negative list" outlined under Section 66D. In addition, the Act defines "service" as any activity carried out by a person for another fo....
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....-A, Certain instruments chargeable with surcharge - (1) All instruments of conveyance, exchange gift, settlement, partition, agreement to sale, composition, mortgage, release, power of attorney and lease of immovable property, and agreement or memorandum of an agreement relating to giving authority or power to a promoter or a developer, by whatever name called, for construction on, or development of, [or sale or transfer (in any manner whatsoever) of,] any immovable property, chargeable with duty under xxxx xxxx xxxx (3) Except as otherwise provided in sub-section i), Provisions of this Act shall so far as may be apply in relation to the surcharge, chargeable under sub-section i) as they apply relation to the duty chargeable under-section 3." 11.2.1 The schedule notified under Section 3 is reproduced below: 33. Lease- Including as under lease, or sub lease and any agreement to let or sub let;- (a) Where, by such lease, the rent is fixed and no premium is paid or delivered;- (i) Where the lease purports to be a term for less than one year; The same duty as on bond (No.14) for the whole amount payable under such lease. (ii) Wher....
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....t/PIL petitioners who questioned the validity of the lease deed executed and finally succeeded in getting it set aside. We are, therefore, of the view that the lease deed which could not be made effective in view of the intervening litigation due to which the Project got delayed, it is legally just and appropriate to direct that the period of 30 years of the lease shall now be counted from the date of this judgment and order." 11.4 In view of the above categorical directions of the Supreme Court, it is established that the lease for the Jal mahal and the Mansagar lake was effective from 25.04.2014 only. This, therefore, clearly negates any demand confirmed under the 'Renting of immovable property' service for the period prior to this date. It has also been categorically submitted that all lease payments received were credited in an escrow account, which was not utilised in view of the continued litigation in this matter. In view of the above discussions, it is clearly established that no service was provided prior to the decision of Supreme Court, and consequently, we hold that the demand for the period October 2008 to March 2014 cannot be upheld. 12. We now consider the dema....