TaxTMI 
TaxTMI 
2026 (6) TMI 1299
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....ing service tax for the period from 01.06.2007 to 31.03.2010. The Commissioner vide Order-in-Original No. 17/2011 dated 25.11.2011 observed that the exclusion of 'vacant land' from definition of immovable property would be applicable only where such vacant land is used for the purpose of agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes. Referring to the definition held that land incidental to use of building or part of the building and common shared areas would also be termed as immovable property to attract tax. Further, he held that land inside the security compound qualifies to be land appurtenant to building and the same is used for furtherance of commerce or business and hence, levy of service tax would come. Accordingly, since the non-payment of tax came to be known only after the investigations were conducted, larger period was invoked and penalties were imposed. Aggrieved by this order, the appellant is in appeal before us. 3. The Learned Counsel submits that Land which is leased / licensed is not a land incidental to building but is specifically identifiable piece of land and it is not incidental to the building or is the part of common are....
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....nd is used for agriculture, aquaculture etc. but the vacant land even if used for the purpose of business or commerce, would be excluded by the exclusion clause. He submits that the Explanation 1, clause (b) of Section 65(105)(zzzz) does not envisage that the vacant land should be put for non-commercial use and it is an undisputed fact that the leased land is vacant, the same is covered under the exclusion provided in the definition. In addition, he submits that the services of appellant are statutory functions, which are not liable to service tax. The function of allowing the use of vacant land belonging to the port trust is part of providing infrastructure at port, which is a statutory function under the provisions of section 49 of Major Port Trust Act, 1963 read with Section 34 of the 'Land Policy'. Relying on the decision in the case of Karnataka Industrial Areas Development Board (KIADB) vs. Commissioner of Central Tax, Bangalore North: 2020 (40) GSTL 33 (Tri.-Bang.), he submits that the Tribunal held that the activities provided by sovereign/public authority, which are required to be provided under a statue does not constitute provision of taxable service to a person and ther....
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....ring the disputed period the definition of 'Renting of Immovable Property' as per Section 65 (105) (zzzz) reads as follows: "taxable service means any service provided or to be provided to any person, by any other person in relation to renting of immovable property for use in the course of furtherance of business or commerce. Explanation 1: for the purpose of this sub-clause immovable property includes- i) Building and part of a building and the land appurtenant thereto; ii) Land incidental to the use of such building of part of a building; iii) The common or shared areas and facilities relating thereto; and iv) In case of a building located in a complex or industrial estate, all common areas and facilitating thereto, within such complex or estate, but does not include- a) Vacant land solely used for agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes; b) Vacant land whether or not having facilities clearly incidental to the use of such vacant land c) Land used for educational, sports, circus, entertainment and parking purposes; and d) Building uses solely for reside....
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....f impugned order relates to 01.06.2007 to 2009-10, whereas the amended Notification came into existence only from 01.07.2010 and the period of dispute is prior to the amendment. We also find that the definition of Section 65(105)(zzzz) during the disputed period excluded the vacant land whether or not having facilities clearly incidental to the use of such vacant land, hence, we find justification in the argument of the appellant that prior to 01.07.2010, the appellant was not liable to pay service tax on the vacant land. 9. We also find that in a similar set of facts, the Hon'ble High Court of Allahabad in the case of Commissioner of S.T. Noida Vs. Greater Noida Development Authority (supra) observed as follows: "17. It is his case that the amendment carried out under the Finance Act of 2010 was only clarificatory in nature and vacant land other than that used for the agriculture, aquaculture, farming, forestry, animal husbandry, mining purpose was clearly defined to be under the purview of the Service tax for the purposes of levy. The insertion of clause (v) under the Finance Act of 2010 w.e.f. 1st July, 2010 did not alter the taxable event of letting of the vacant la....
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....l be subjected to service tax. The statement of objects and reasons accompanying the Finance Bill, 2010 also clarify that clause 75 of the Bill seeks to amend Chapter V of the Finance Act, 1994; to modify the scope of certain taxable services including the taxable service defined and enumerated in Section 65(105)(zzzz), of the Act. These several contemporaneous exposition and administrative constructions and the scope of sub-clause (v) of Explanation I in Section 65(105)(zzzz) fortify the conclusion the scope of sub-clause (v). To modify and expand the scope of the taxable service to cover and include vacant land on lease or licence for construction of a building or a temporary construction at a later stage to be used for furtherance of business or commerce, within the ambit of 'immovable property' is thus the taxable service. Since the introduction of this sub-clause in Explanation I expands the scope of the taxable service and renders the taxable (a) hitherto non-taxable transaction, and absent of explicit retrospective reach provided to the amendment and insertion of this sub-clause, these transactions covered by this sub-clause of the Explanation have only the prospective opera....