TaxTMI 
TaxTMI 
2026 (9) TMI 554
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....as is defined under section 65/90(a) of the Finance Act, 1994 [the Act] and also qualifies to be called as service in terms of section 65B(44) of the Act which is not covered under section 66D of the Act. However, the respondent was not registered with the service tax department. The M/s MPAKVNL was, accordingly, enquired. 2. On the basis of information provided by the respondent about the amount of lease rent received for renting land/shop/gomtee for the period with effect from 01.06.2007 to 30.03.2014, it was observed that an amount of Rs. 55,89,93,145/- has been received by the respondent for rendering the aforesaid activity without discharging the service tax liability. Based on the said information, following show cause notices have been issued: S. No. SCN No. and Date Period Amount (in Rs.) 1 56/Commr/ST/BPL-I/2012 dated 10.09.2012 01.06.2007 to 31.08.2011 3,50,67,378/- 2 124/Commr/ST/BPL-I/2012 dated 19.10.2012 01.09.2011 to 30.09.2012 99,68,152/- 3 94/Commr/ST/Adj/BPL-I/2014 dated 29.09.2014 01.10.2012 to 31.03.2013 93,10,680/- 4 17/Commr/ST/Adj/BPL-I/2015 dated 16.04.2015 01.04.2013 to 31.03.2014 96,77,383/- ....
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....enalties are a deterrent, supported by Hindustan Steel Ltd. v. State of Orissa [978 ELT (J 159) / [1972] 83 ITR 26)] Finally it is submitted that the recipient's status as a government corporation does not exempt it from tax compliance. 5. With these submissions, the order under challenge, to the extent of dropping the demand proposed by the different show cause notices is prayed to be set aside and the appeal filed by the department is prayed to be allowed. 6. While rebutting these submissions, learned counsel for the respondent has submitted that the respondent is a state government industrial development corporation undertaking establishment of industrial units by way of grant of land lease of 30 years or more of industrial plots. It is submitted that though the activity of renting of immovable property became taxable with effect from 01.06.2007, however, the renting of vacant land has been specifically excluded under clause (b) of the explanation II to section 65(105)(zzzz) of the Act. It is only with effect from 01.07.2010 that the activity of renting vacant land on lease/license for construction of building/temporary structure to be used for furtherance of business/comm....
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....y are as follows: "Section 65(41)" renting" means allowing, permitting or granting access, entry, occupation, use or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of immovable property. "Section 65(44)" service" means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include- (a) an activity which constitutes merely,- (i) a transfer of title in goods or immovable property, by way of sale, gift or in any other manner, or (ii) such transfer, delivery or supply of any goods which is deemed to be a sale within the meaning of clause (29A) of article 366 of the Constitution; or (iii) a transaction in money or actionable claim; xxx xxx xxx Section 66B. Charge of service tax on and after Finance Act, 2012 There shall be levied a tax (hereinafter referred to as the service tax) at the rate of fourteen per cent on the value of all services, other than those services specified in the ne....
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....he respondent that one time premium or salami received while leasing out the immovable property is not taxable. The Larger Bench of this Tribunal in the case of RII Rajasthan State Industrial Development & Investment Corporation Ltd vs. Commissioner, Central Excise & Service Tax Commissionerate, Alwar [2025 33 Centax 73 (Tri. Del)] (supra) has held that one time premium/salami amount collected from the persons to whom the immovable property has been leased out is leviable to service tax under renting of immovable property service during the period, prior to and post 01.07.2012. Hence the respondent is rightly held liable to service tax vis-à-vis the said activity. It is observed that demand for the period 01.06.2007 to 30.09.2010 has been dropped holding it to be time barred demand. 11. It is an admitted fact that the respondent is a governmental authority. It is the settled law that there can be no malafide intent with the government or the governmental authority to evade service tax. Since, for invoking the extended period of limitation there should be an intent to evade duty, the misstatement or suppression must be willful as was held by Hon'ble Supreme Court in the ca....