2022 (1) TMI 133 - HC - Service Tax

Nature of activity - service or not - petitioner joined hands with two other owners and sold about 19.07 acres of land, of which, 5.43 acres belongs to the petitioner - case of petitioner is that the activity undertaken by the petitioner does not amount to service within the meaning of Section 65 (B) (44) which specifically excludes a transfer of title and goods or immovable property by way of sale, gift or in any other manner - applicability of mega exemption notification - place of provision of services rules - HELD THAT - There is no merits in this writ petition. It is for the petitioner to convince the appellate authority to come to a conclusion that neither the petitioner has provided any taxable service within the meaning of Section 65 (B) (44) of the Finance Act, 1994 or that the service provided by the petitioner well within the negative list under Section 65 (D) of the Finance Act, 1994 or was exempted under the Mega Exemption notification issued by the Central Government under Section 93 of the Finance Act, 1994. It is also open for the petitioner to make out a case as to whether the show cause notice issued by the respondent on 16.04.2019 was contrary to Rule 5 of the Place of Provisions of Service Rules, 2012 or whether the respondent was justified by concluding with the place of service would be location of the respondent of the service as there are disputed question of facts have to be determined only by the authorities acting under the hierarchy Act. This Writ Petition is dismissed with liberty to the petitioner to file statutory appeal before the Appellate Commissioner, within a period of two months from the date of receipt of a copy of this order.

Summary

Issues:
Jurisdiction of the respondent under the Place of Provision of Services Rules, 2012; Whether the petitioner's activity amounts to a taxable service under Section 65 (B) (44) of the Finance Act, 1994; Validity of the show cause notice issued by the respondent; Availability of alternate remedies for the petitioner.

Jurisdiction of the Respondent:
The petitioner challenged the Order in Original No.03/2021, alleging it was passed without jurisdiction and contrary to the Place of Provision of Services Rules, 2012. The petitioner argued that the service provided in relation to immovable property falls under Rule 5 of the mentioned rules, emphasizing that the place of provision is where the immovable property is located or intended to be located. The petitioner contended that the respondent's order was without jurisdiction, citing precedents from the Tribunal to support the claim. However, the court found no merit in the petitioner's argument, stating that the appellate authority should determine whether the service provided by the petitioner falls under taxable services or is exempted under relevant provisions of the Finance Act, 1994.

Taxable Service Under Section 65 (B) (44) of the Finance Act, 1994:
The petitioner's counsel argued that the petitioner's activity does not constitute a taxable service as per Section 65 (B) (44) of the Finance Act, 1994, which excludes the transfer of title in immovable property. The petitioner, along with two other owners, sold a significant portion of land, with a fraction belonging to the petitioner. The court noted that determining whether the petitioner provided a taxable service or falls within exemptions requires factual assessment, which should be addressed by the authorities under the hierarchy act. The court dismissed the writ petition, advising the petitioner to pursue remedies through the appellate process.

Validity of Show Cause Notice:
The petitioner also contested the jurisdiction of the respondent based on the show cause notice issued, alleging it was contrary to Rule 5 of the Place of Provision of Services Rules, 2012. The court highlighted that the determination of the place of service provision and other disputed factual issues should be resolved through the appropriate authorities under the Finance Act, 1994. The court emphasized that the petitioner has the option to appeal to higher authorities or courts if aggrieved by the decisions made during the process.

Availability of Alternate Remedies:
Given the disputed factual nature of the case, the court declined to admit the writ petition, stating that the petitioner has an alternate remedy through an appeal process. The court dismissed the writ petition with liberty for the petitioner to file a statutory appeal before the Appellate Commissioner within a specified timeframe. No costs were awarded, and the connected miscellaneous petition was closed accordingly.