2021 (2) TMI 1078 - AT - Service Tax

Renting of immovable property service - Failure to file periodic ST-3 returns - service pertaining to commercial development of vacant rail land by construction of multifunctional complexes - HELD THAT - The non-registration of appellant under service tax has been heavily objected. However, it is acknowledged that Development Agreement with respect to Sarai Rohilla Railway Station has got terminated and that the said termination will have an effect upon quantum of liability. Accordingly, the request of learned Counsel for appellant for remanding the matter for fresh decision has been acknowledged. The matter remanded back to the respective adjudicating authority and order accordingly with the direction to the Adjudicating Authority to re-adjudicate the issue after taking into consideration the termination of the said Development Agreement and subsequent proceedings - Appeal allowed by way of remand.

Summary

Issues:
1. Failure to register for service tax and file returns.
2. Demand raised for service tax liability.
3. Termination of Development Agreement affecting liability.
4. Request for remand and time-bound decision.

Analysis:
1. The case involved the Appellant, M/s. Rail Land Development Authority (RLDA), engaged in providing taxable services without registering with the Service Tax department or filing ST-3 returns. A show cause notice was issued, demanding ?1,18,85,18,698 towards service tax liability for 'renting of immovable property service', along with interest and penalties. The Order-in-Original confirmed this proposal.

2. The Appellant challenged the order through an appeal, represented by a Chartered Accountant. The total lease premium for 13 projects, including one for Sarai Rohilla Railway Station, was ?1052.17 crore and ?990.90 crore, respectively. Some projects were terminated or under litigation, with the Sarai Rohilla project facing termination and subsequent legal proceedings, affecting the quantum of demand.

3. The Appellant argued that the termination of the Sarai Rohilla Railway Station project post the original order was not considered during adjudication, impacting the liability amount. The Department's Authorized Representative acknowledged the termination's relevance on liability and agreed to remand the matter for a fresh decision, considering the termination's implications.

4. The Tribunal, after considering the submissions, decided to remand the case to the adjudicating authority. The direction was given to re-adjudicate the issue, factoring in the termination of the Development Agreement and subsequent proceedings. A time-bound adjudication within six months from the order's receipt was mandated to ensure a prompt resolution of the matter.