Custom, Excise & Service Tax Tribunal
Gujarat Industrial Development ... vs Ahmedabad-Iii on 23 September, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST ZONAL BENCH : AHMEDABAD
REGIONAL BENCH - COURT NO. 3
SERVICE TAX Appeal No. 12075 of 2018-DB
(ST/Misc/10762 & 10763/2024)
[Arising out of Order-in-Original/Appeal No AHM-EXCUS-003-COM-003-18-19 dated
20.04.2018 passed by Commissioner of Central Excise, Customs and Service Tax-
AHMEDABAD-III]
Gujarat Industrial Development Corporation .... Appellant
Plot No. B-23 'k' Road, Gandhinagar Electronics
Estate, GANDHINAGAR, GUJARAT
VERSUS
Commissioner of Central Excise & ST, Ahmedabad-iii .... Respondent
Custom House, 2nd Floor, Opp. Old Gujarat High Court, Navrangpura, Ahmedabad, Gujarat -380009 WITH
(i) SERVICE TAX Appeal No.11404/2017 (Gujarat Industrial Development Corporation)
(ii) SERVICE TAX Appeal No.11405/2017 (Gujarat Industrial Development Corporation)
(iii) SERVICE TAX Appeal No.11406/2017 (Gujarat Industrial Development Corporation)
(iv) SERVICE TAX Appeal No.11407/2017 (Gujarat Industrial Development Corporation)
(v) SERVICE TAX Appeal No.11970/2017 (Gujarat Industrial Development Corporation)
(vi) SERVICE TAX Appeal No.11971/2017 (Gujarat Industrial Development Corporation)
(vii) SERVICE TAX Appeal No.10203/2018 (Gujarat Industrial Development Corporation)
(viii) SERVICE TAX Appeal No.10204/2018 (Gujarat Industrial Development Corporation)
(ix) SERVICE TAX Appeal No.10405/2018 (Gujarat Industrial Development Corporation)
(x) SERVICE TAX Appeal No.11203/2018 (Gujarat Industrial Development Corporation)
(xi) SERVICE TAX Appeal No.11204/2018 (Gujarat Industrial Development Corporation)
(xii) SERVICE TAX Appeal No.11205/2018 (Gujarat Industrial Development Corporation)
(xiii) SERVICE TAX Appeal No.11206/2018 (Gujarat Industrial Development Corporation)
(xiv) SERVICE TAX Appeal No.12074/2018 (Gujarat Industrial Development Corporation) 2 Appeal No. ST/11404-11407,11970-11971/2017, ST/12075,10203- 10204,10405,11203-11206,12074-12075,13013/2018, ST/10054,10289-10290,10454- 10455,12626/2019
(xv) SERVICE TAX Appeal No.13013/2018 (Gujarat Industrial Development Corporation) (xvi) SERVICE TAX Appeal No.10054/2019 (Gujarat Industrial Development Corporation) (xvii) SERVICE TAX Appeal No.10289/2019 (Gujarat Industrial Development Corporation) (xviii) SERVICE TAX Appeal No.10290/2019 (Gujarat Industrial Development Corporation) (xix) SERVICE TAX Appeal No.10454/2019 (Gujarat Industrial Development Corporation) (xx) SERVICE TAX Appeal No.10455/2019 (Gujarat Industrial Development Corporation) (xxi) SERVICE TAX Appeal No.12626/2019 (Gujarat Industrial Development Corporation) [Arising out of Order-in-Original/Appeal No BHR-EXCUS-000-COM-135-16-17 dated 31.03.2017 passed by Commissioner of Central Excise, Customs and Service Tax-Bharuch, [Arising out of Order-in-Original/Appeal No BHR-EXCUS-000-COM-137-16-17 dated 31.03.2017 passed by Commissioner of Central Excise, Customs and Service Tax- Bharuch[Arising out of Order-in-Original/Appeal No BHR-EXCUS-000-COM-135-16-17 dated 31.03.2017 passed by Commissioner of Central Excise, Customs and Service Tax-Bharuch, Arising out of Order-in-Original/Appeal No BHR-EXCUS-000-COM-136-16-17 dated 31.03.2017 passed by Commissioner of Central Excise, Customs and Service Tax-Bharuch, Arising out of Order-in-Original/Appeal No VAD-EXCUS-001-COM-16-17-18 dated 28.08.2017 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-VADODARA-I, Arising out of Order-in-Original/Appeal No VAD-EXCUS-001- COM-17-17-18 dated 28.08.2017 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-VADODARA-I, Arising out of Order-in- Original/Appeal No RAJ-EXCUS-000-COM-05-17-18 dated 30.10.2017 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-RAJKOT, Arising out of Order-in-Original/Appeal No RAJ-EXCUS-000-COM-04-17-18 dated 25.10.2017 passed by Commissioner ( Appeals ) Commissioner of Central Excise, Customs and Service Tax-RAJKOT, Arising out of Order-in-Original/Appeal No SUR-EXCUS-000-COM- 007-17-18 dated 23.11.2017 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-SURAT-I, Arising out of Order-in-Original/Appeal No VAD- EXCUS-001-APP-771-2017-18 dated 29.12.2017 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-VADODARA-I, Arising out of Order-in-Original/Appeal No VAD-EXCUS-001-APP-767-2017-18 dated 29.12.2017 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax- VADODARA-I, Arising out of Order-in-Original/Appeal No VAD-EXCUS-001-APP-734-2017-18 dated 22.12.2017 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-VADODARA-I, Arising out of Order-in-Original/Appeal No VAD- EXCUS-001-APP-765-2017-18 dated 29.12.2017 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-VADODARA-I, Arising out of Order-in-Original/Appeal No SUR-EXCUS-001-COM-092-16-17 dated 22.03.2017 passed by Commissioner of Central Excise, Customs and Service Tax-SURAT-I, Arising out of Order-in- Original/Appeal No AHM-EXCUS-003-APP-75-18-19 dated 27.08.2018 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax- AHMEDABAD, Arising out of Order-in-Original/Appeal No VAD-EXCUS--001-APP-332-2018- 19 dated 10.09.2018 passed by Commissioner (Appeals) Commissioner of Central Excise, 3 Appeal No. ST/11404-11407,11970-11971/2017, ST/12075,10203- 10204,10405,11203-11206,12074-12075,13013/2018, ST/10054,10289-10290,10454- 10455,12626/2019 Customs and Service Tax-VADODARA-I, Arising out of Order-in-Original/Appeal No VAD- EXCUS-001-APP-387-2018-19 dated 14.09.2018 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-VADODARA-I, Arising out of Order-in-Original/Appeal No VAD-EXCUS-001-APP-333-2018-19 dated 10.09.2018 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax- VADODARA-I, Arising out of Order-in-Original/Appeal No CCESA-AUDIT-SRT-VK-18-2018-19 dated 06.12.2018 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-SURAT-I, Arising out of Order-in-Original/Appeal No CCESA- AUDIT-SRT-VK-15-2018-19 dated 29.11.2018 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-SURAT-I, Arising out of Order-in- Original/Appeal No VAD-EXCUS-001-APP-84-2019-20 dated 28.05.2019 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax- VADODARA-I] APPEARANCE :
Shri Jigar Shah & Shri Amber Kumarawat, Advocates for the Appellant Shri Mihir G Rayka, Addl. Commissioner (AR), for the Respondent CORAM: HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) HON'BLE MR. C.L. MAHAR, MEMBER (TECHNICAL) DATE OF HEARING : 30.07.2024 DATE OF DECISION: 23.09.2024 FINAL ORDER NO. 12117-12138/2024 C.L. MAHAR :
Gujarat Industrial Development Corporation (GIDC), established under the Gujarat Industrial Development Act, 1962, facilitates industrial development in Gujarat by allocating land and providing infrastructure in industrial areas. GIDC also maintains and upgrades infrastructure like roads, water supply, and drainage, funded through the Infrastructure Maintenance and Upgradation Funds. GIDC collects rent from lessees and pays service tax on the amount retained for infrastructure up-gradation fund. Initially GIDC proposed to create a fund by charging Rs. 9/- per sq. Mtr. as Industrial maintenance fund to be charged from the leaseholders of less than 100 hectares and Rs. 9 per sq. Mtr. as Industrial Up-gradation fund to be charged from the lease holders of more than 100 hectares but subsequently vide resolution dated 10.10.2010 it was decided for merging the Infrastructure Maintenance Fund (IMF) and the Infrastructure Up- gradation Fund (IUF) into a single fund, with new contributions set at Rs.5 per sq. meter from all the lessees out of which Rs. 2 per sq. meter would be allocated to industrial associations, and Rs. 3 per sq. meter to GIDC. A circular dated 17.07.2010 outlined quarterly payments of 40% of the 4 Appeal No. ST/11404-11407,11970-11971/2017, ST/12075,10203- 10204,10405,11203-11206,12074-12075,13013/2018, ST/10054,10289-10290,10454- 10455,12626/2019 collected amount to industrial associations. An audit by the Central Excise Commissionerate raised objections about GIDC's failure to pay service tax on share of 40% allocated to industrial associations. It was further observed that the appellant failed to pay service tax on the following charges collected from the leaseholders:
(a) Non-Utilization (NU) Penalty: According to GIDC norms, every leaseholder is required to complete a minimum level of construction for the utilization of plots, sheds, and other properties. In cases where this condition is not met, the appellant collects a Non-Utilization (NU) Penalty from the leaseholders. It appears that the amount collected falls under the category of "declared service" as per Section 66B, and the appellant is therefore liable for the service tax on this amount.
(b) Water Supply Charges: The appellant has been collecting "water charges" from business entities operating from plots allotted to them in the GIDC area for the supply of water. This activity is considered taxable under the category of "support services of business or commerce" or "business support services."
(c) Miscellaneous Receipts: The appellant collects various fees/charges such as sub-letting fees, subdivision charges, amalgamation fees, collateral fees, etc., from leaseholders operating businesses in the GIDC area. These charges represent additional consideration and were in relation to "renting of immovable property," and are liable for service tax.
(d) Transfer Charges: The appellant collects "transfer fees" from leaseholders as additional consideration during the transfer of property from one leaseholder to another. These transfer fees are deemed additional consideration related to the renting of immovable property and are subject to service tax.
Accordingly following demands were raised against the appellant vide show cause notice dated 19.04.2017 which in total amounted to Rs. 2,44,32,267/-.
Infrastructure
Transfer Misc Water
Period Up gradation Penalty
Fees Receipts Charges
fund
5
Appeal No. ST/11404-11407,11970-11971/2017, ST/12075,10203- 10204,10405,11203-11206,12074-12075,13013/2018, ST/10054,10289-10290,10454-
10455,12626/2019
Oct. 11 to
460369 4646261 246798 41388
March 12
01.04.2012 to
1728495 226183
30.06.2012
01.07.2012 to
552575 2641375 230469 1095875 87459
31.03.2013
2013-14 551679 1863220 639257 825430 614464
2014-15 1621559 214903 472494 565594
2015-16 1898084 1926139 1282197
Total 1564623 14398994 3483749 3675996 1308905
The appellant challenged the demand in the adjudication proceedings and the Ld. Commissioner dropped the demand of Rs. 1,41,13,393/- considering that (i) Service Tax amounting to Rs.36,75,995/-as NU Penalty which pertained to the period 01.07.2012 onwards was collected as a statutory levy and not against provisions of any kind of taxable service; (ii) Service Tax amounting to Rs. 13,08,905/- on water charges for the entire period covered under SCN, was also dropped as the water charges are not earned by the appellant by providing any services and same are considered as sale proceeds of essential commodity and also it is covered under Twelfth Schedule under Article 243W of the Constitution; (iii) Service Tax amounting to Rs. 91 28 492/-, on the amount recovered as Infrastructure Upgradation fund and Transfer Fees for the period from 01-07-2012 to March, 2016, as it is covered under Twelfth Schedule under Article 243W of the Constitution. However, it has been held in the impugned order-in-original that the appellant is liable Service Tax amounting to Rs. 1,03,18,874/- and to pay interest on the demand of short-paid/ not-paid Service Tax amounting to Rs. 34,83,749/-for the Misc receipts for the whole period, Rs. 460369/- on IUF for the period Oct. 11 to June 2012 & Rs. 63,74,756/- on transfer fees for the period Oct. 11 to June 2012 total amounting to Rs. 1,03,18,874/- . It was further held that extended period was invokable as they have deliberately, consciously and purposefully concealed material information 6 Appeal No. ST/11404-11407,11970-11971/2017, ST/12075,10203- 10204,10405,11203-11206,12074-12075,13013/2018, ST/10054,10289-10290,10454- 10455,12626/2019 from the department& the above said short payment is unearthed after conducting Audit by the Officers of Audit-I Commissionerate, Ahmedabad and had the said short payment not been detected during audit, it would have remained unnoticed. Therefore, this is a case of improper assessment on the part of the service provider by resorting to deliberate non-declaration and suppression of relevant and vital information with a wilful intention to evade payment of Service Tax. Further interest under Section 75 of the Finance Act, 1994 has been demanded and penalties under Section 76, 77 and 78 has also been imposed. Now the appellant is before us against the impugned order.
3. Shri Jigar Shah, learned Counsel appeared on behalf of the appellant along with Shri Amber Kumarawat, Advocate. The learned advocate has argued that Service tax is leviable only on the 'gross amount charged' by the service provider for the 'services provided' as per Section 67 of the Finance Act, 1994. The term 'gross amount charged' should not be construed as any amount billed by the service provider but rather the amount directly related to the service provided. Since the Appellant did not provide any services directly to the allottees, the amount collected on behalf of Industrial Associations is not liable for service tax. The Circular dated 17.07.2010 specifies that Rs. 3 per sq. Mtr. is retained by the Appellant while Rs. 2 per sq. Mtr. is paid to the Industrial Associations. The Appellant's records show the amount transferred to the Industrial Associations as a liability, proving that the disputed amount was not retained. The amount of Rs. 2 collected from leaseholders for remittance to Infrastructure Associations/Notified Area Authorities does not qualify as consideration for any service provided by GIDC. Thus, no service tax is applicable on this amount. In this regard, the Appellant places reliance on the decision of the Hon'ble Supreme Court in the case of UOI v. M/s. Intercontinental Consultants and Technocrats Pvt. Limited, 2018 (3) TMI 357- SUPREME COURT, wherein it was held that valuation of taxable service cannot be anything more or less than the consideration paid as quid pro quo for rendering 'such service' and the value of reimbursable expenses which are not charged towards rendition of any services provided but are merely paid for reimbursing the expenses incurred by the service provider on behalf of the service recipient should not form part of the taxable value. . Further, 7 Appeal No. ST/11404-11407,11970-11971/2017, ST/12075,10203- 10204,10405,11203-11206,12074-12075,13013/2018, ST/10054,10289-10290,10454- 10455,12626/2019 reliance is placed on the decision of the Hon'ble Supreme Court in the case of CST v. M/s. Bhayana Builders (P) Limited, 2018 (2) TMI 1325-SUPREME COURT, wherein the Hon'ble Apex Court analysed the scope of Section 67 of the Act, 1994 and categorically held that the amount charged should be 'for such service provided'. By using the words 'for such service provided" the Act has provided for a nexus between the amount charged and the service provided. In absence of such nexus, the consideration received by the assessee cannot form part of the total taxable value in terms of Section 67 of the Act. That the Appellant has acted in the capacity of a 'pure agent'. The amount collected by the Appellant was duly passed on to the Industrial Associations and therefore no service tax can be levied on such income.
4. Further, learned Counsel argued that the income received under various heads like transfer fees and Misc receipts comprising various fees/charges such as sub-letting fees, subdivision charges, amalgamation fees, collateral fees, etc., from leaseholders operating businesses in the GIDC area is the income of the State of Gujarat. As the Appellant is an undertaking of the State Government of Gujarat, this income is immune from Union taxation, and therefore, no service tax is payable. The Central Board of Excise and Customs clarified in Circular No. 89/7/2006-Service Tax dated 18.12.2006 that activities performed by sovereign/public authorities under statute, with fees collected as compulsory levies deposited into the Government treasury, are not taxable services. The Hon'ble CESTAT Delhi, in Central GST Delhi v. Delhi International Airport Ltd. - 2023 (5) TMI 867, held that fees collected for sovereign/public functions, even if termed differently, are not subject to service tax. The fees collected by the Appellant, such as Infrastructure Upgradation Fund, Transfer Fee, and other Miscellaneous Fees, are mandated by statutory provisions and pertain to land development and maintenance. These charges are not for commercial purposes but statutory functions. The Hon'ble CESTAT Ahmedabad, in Gujarat Industrial Development Corporation v. CCE & ST, Ahmedabad-III - 2018 (11) TMI 363
- CESTAT AHMEDABAD ruled that maintenance charges collected by a State Industrial Development Corporation are not taxable. The Supreme Court remanded the case for reconsideration in light of Krishi Upaj Mandi Samiti v. CCE & ST-2022 (2) TMI 1113- SUPREME COURT which upheld that statutory fees collected by sovereign authorities are not subject to service tax.
8Appeal No. ST/11404-11407,11970-11971/2017, ST/12075,10203- 10204,10405,11203-11206,12074-12075,13013/2018, ST/10054,10289-10290,10454- 10455,12626/2019 Following the Supreme Court's direction, the Hon'ble CESTAT Ahmedabad ruled vide Final order 01.05.2024 cited as 2024 (1) TMI 520 - CESTAT AHMEDABAD that maintenance charges under the Gujarat Industrial Development Act, 1962 are statutory levies and not subject to service tax. He further stated that relevant decisions supporting this proposition include Karnataka Industrial Areas Development Board v. Commissioner of Central Tax, Bangalore North - 2020 (6) TMI 227- CESTAT BANGALORE and CCE, Nashik v. Maharashtra Industrial Development Corporation -2018 (2) TMI 1498 - BOMBAY HIGH COURT. Therefore, the amounts collected by the Appellant as Infrastructure Upgradation Fund, Transfer Fee, and Miscellaneous charges are statutory levies, and no service tax should be levied. He finally argued that the entire demand is liable to be set aside on this basis. He further argued that the extended period of limitation should not apply as there was no suppression of facts. The Appellant, being a governmental authority, should be presumed to act with no malafide intent. Since there is no valid demand for service tax, no interest or penalties should be levied.
5. Shri Mihir G Rayka, learned Additional Commissioner (AR) arguing on behalf of the department has reiterated the findings of the impugned order and emphasized that the demand has been correctly confirmed against the appellant. He argued that the appellant has failed to account for the misc. receipts and prove that same pertain to exempted services and further though GIDC qualifies as a 'governmental authority' and is thus eligible for exemption from Service Tax under Item No. 39 of Notification No. 25/2012- ST, dated 20-06-2012, concerning functions listed under Article 243W of the Constitution, GIDC collects 'Development Charges' for converting land to non-agricultural use, which is covered under functions like 'Regulation of land use and construction of buildings,' 'Roads and bridges,' and 'Planning for economic and social development,' per the Twelfth Schedule and the development charges collected for these services are exempt from Service Tax. However, income earned by M/s. GIDC from 01-10-2011 to 30-06- 2012, before the notification came into effect, is not eligible for exemption and is liable for Service Tax. These charges, categorized as 'Transfer Fees' and 'Infrastructure Upgradation Fund,' relate to the service of 'Renting of Immovable Property,' which attracts Service Tax.
9Appeal No. ST/11404-11407,11970-11971/2017, ST/12075,10203- 10204,10405,11203-11206,12074-12075,13013/2018, ST/10054,10289-10290,10454- 10455,12626/2019
6. We have carefully gone through the rival arguments. It is not in dispute and is explicitly accepted by the Ld. Commissioner in the impugned order that GIDC has been discharging various statutory functions under Article 243 W of the Constitution and charges such as "Infrastructure upgradation fund" and "transfer fees" were collected in discharge of the statutory functions and were exempt under Item No. 39 of Notification No. 25/2012-ST. However, income earned by M/s. GIDC from 01-10-2011 to 30- 06-2012, before the notification came into effect, is not eligible for exemption and is liable for Service Tax. We find that as per circular dated 18th December 2006 bearing No.89/7/2006 it is stated that - "The Board is of the view that the activity performed by the sovereign/public authorities under the provision of the law are in the nature of statuary obligations which are to be fulfilled in accordance with the law. The fee collected by them for performing such activates is in the nature of compulsory levy as per the provisions of the relevant statute, and it is deposited into the Government Treasury. Such activity is purely in the public interest and it is undertaken as mandatory and statutory function. These are not in the nature of service to any particular individual for any consideration. Therefore, such activity performed by a sovereign/public authority under the provisions of law does not constitute provision of taxable service to a person and, therefore, no service tax is leviable on such activities. However, if such authority performs a service, which is not in nature of statutory. activity and the same is undertaken for a consideration not in the nature of statutory fee/levy. then in such cases, service tax would be leviable. if the activity undertaken falls within the ambit of a taxable service." It has been accepted in the impugned order that the "Infrastructural up-gradation fund" and "transfer fees" were covered under article 243W which is a statutory function of the state government covered under the expressions "Regulation of land use and construction of buildings,' 'Roads and bridges,' and 'Planning for economic and social development" and GIDC is a state undertaking which is performing these functions in the state for development of industry in the state. Once it is accepted that these are the statutory functions of the state, the same cannot be exigible to tax under the period prior to 01.07.2012 also. Further misc. receipts which are stated to be in respect of as sub- letting fees, subdivision charges, amalgamation fees, collateral fees are nothing but necessary for orderly regulation of industrial estate and are for 10 Appeal No. ST/11404-11407,11970-11971/2017, ST/12075,10203- 10204,10405,11203-11206,12074-12075,13013/2018, ST/10054,10289-10290,10454- 10455,12626/2019 of the infrastructural development activity only. It is an avowed statutory duty of the state to develop industry in the state and any charges collected for such making such development cannot be subjected to tax. Hon'ble Bombay High Court in the matter of Commissioner of Central Excise, Nashik vs. Maharashtra Industrial Development Corporation- 2018 (2) TMI 1498 has held as under :-
"12. We have already referred to Section 14 of the MID Act which provides that the function of the MIDC is not only to develop industrial areas but to establish and manage industrial estates. The role of MIDC is not limited only to establishing industrial estates and allotting the plots or buildings or factory sheds to industrial undertakings. The function and obligation of the MIDC is also to manage and maintain the said industrial estates as provided in Section 14. Therefore, it is the statutory obligation of the MIDC to provide amenities as defined in clause (a) of Section 2 of the MID Act to the industrial estates established by it. Thus, it is the statutory obligation of MIDC to provide and maintain amenities in its Industrial estates such as roads, water supply, street lighting, drainage, etc. Thus, we find that the activities for which the demand was made are part of the statutory functions of the MIDC under MID Act. As stated earlier, the demand is in respect of service charges collected from plot holders for providing them various facilities including maintenance, management and repairs. As provided in the circular dated 18th December, 2006, for providing amenities to the plot holders, the service fees or service charges collected by MIDC are obviously in the nature of compulsory levy which is used by MIDC in discharging statutory obligations under Section 14. We find that even in the Order-in-Original, there is no finding of fact recorded that the service rendered for which service tax was sought to be levied was not in the nature of statutory obligation.
13 Therefore, we find no error in the view taken by the Appellate Tribunal. No substantial question of law arises.
14 MIDC is a statutory corporation which is virtually a wing of the State Government. It discharges several sovereign functions. In our view, the Revenue ought not to have compelled MIDC to prefer Appeals before Appellate Tribunal. Not only that MIDC was driven to prefer Appeals before the Appellate Tribunal, this group of appeals were preferred by the Revenue. Needless to add that MIDC was required to incur huge expenditure on litigation. All this could have been avoided by the Appellant. Therefore, we propose to saddle the Appellant with costs of ₹ 10,000/in each Appeal. We dismiss the Appeals. We direct the Appellant to pay costs quantified at ₹ 10,000/in each Appeal to the Respondent - MIDC within a period of one month from the date on which this judgment and order is uploaded. Place the Appeals for reporting compliance regarding payment of costs on 12th October, 2017 under the caption of "Directions".
7. We find that the above case law is squarely applicable to the facts of the case as any development authority vested with the obligation and powers to develop an industrial estate need to collect fees/ charges as the State Act constituted for the purpose and so long as these fees/ charges are as per the Act and not discretionary, the same are considered to be statutory levies. Accordingly, we hold that "infrastructure up-gradation 11 Appeal No. ST/11404-11407,11970-11971/2017, ST/12075,10203- 10204,10405,11203-11206,12074-12075,13013/2018, ST/10054,10289-10290,10454- 10455,12626/2019 fund", "transfer fees" and other misc. charges in respect of in respect of as sub-letting fees, subdivision charges, amalgamation fees, collateral fees are necessary for maintenance, management and repairs of the industrial estate under Gujarat Industrial Development Corporation (GIDC), established under the Gujarat Industrial Development Act, 1962 and are not subject to service tax during the impugned period of either before or after 01.07.2012. We further hold that no service tax could be charged on the share of "IUF" which was collected from the leaseholders on behalf of the Industrial Associations and reimbursed to them as those does not qualify as consideration for any service provided by GIDC as discussed in the preceding paras. Accordingly, we set aside the impugned orders. Appeals are thus allowed. Miscellaneous Applications filed for filing additional documents are also disposed of.
(Pronounced in the open court on 23.09.2024) (Ramesh Nair) Member (Judicial) (C L Mahar) Member (Technical) KL