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TMI Blog2014 (8) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... levant to the case briefly are as follows: 2.1 M/s. CIDCO, a corporation registered under the Companies Act, 1956 and wholly owned by the Government of Maharashtra, is a New Town Planning & Development Authority entrusted with the job of development of Navi Mumbai under the Maharashtra Regional Town Planning Authority under the said Act for developing certain towns. For the purpose of development, the Government of Maharashtra acquired privately owned land in the project area from various people on payment of consideration and CIDCO was authorized to lease the land for the purpose of creating infrastructure. CIDCO, on behalf of the Government of Maharashtra, leased the land to the intending lessees for an initial period of four years for construction of building, factory or complexes on the same and on completion of the construction activities, it entered into another lease agreement for a long period (more than 12 years). The lease amount was collected by way of premium at the time of entering into the 'agreement to lease' and by way of rental, when the 'lease agreement' was entered into by CIDCO. The department was of the view that the activity undertaken by CIDCO falls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is a difference between "agreement to lease" and "lease agreement". Reliance is also placed on the decision of the Hon'ble Madras High Court in the case of A. R. Krishnamurthy and A.R. Vs. CIT - 1982 133 ITR 922 Mad wherein it was held as follows: "Section 105 of the Transfer of Property Act defines a lease of immovable property as " a transfer of a right to enjoy such property, made for a certain time, express or implied or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. The transferor is called the lessor the transferee is called the lessee, the price is called the premium and the money, share, service or other thing to be so rendered is called the rent". A lease thus consists of a right to the possession and use of the property owned by some other person. It is an outcome of the separation of ownership and possession. The lessor of the land is he who owned and possessed, it, but has transferred the possession of it to another. The price paid for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue, on the other hand, reiterates the findings of the adjudicating authority. He submits that the service tax law does not distinguish between the Government and non-Government agencies and whomsoever is rendering a taxable services is liable to pay service tax. Reliance is placed on the decision of the hon'ble Apex Court in the case of SAIL Vs. National Union Waterfront Workers - 2001 (7) SCC 1 wherein it was held that Government does not include a corporation constituted under the Act of the legislative assembly and they are merely creations of the Government and are distinguishable from the Government. He further submits that Section 65 (105) (zzzz) clearly states that "Immovable Property" includes land incidental for use of the building and therefore, the demands are clearly sustainable in law. Reliance is also placed on the definition of renting under Section 65B (41) of the Finance Act, 1994 where renting has been defined to include "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 299] the hon'ble court held as under: "The expressions "pertaining to", "in relation to" and arising out of, used in the deeming provision, are used in the expansive sense. The words "arising out of" have been used in the sense that it comprises purchase of shares and lands from income arising out of the Kanpur undertaking. The words "pertaining to" and "in relation to" have the same wide meaning and have been used interchangeably for among other reasons, which may include avoidance of repetition of the same phrase in the same clause or sentence, a method followed in good drafting. The word "pertain" is synonymous with the word 'relate'. The term 'related' is also defined as meaning to bring into association or connection with. The expression "in relation to", is a very broad expression which pre-supposes another subject matter. These are words of comprehensiveness which might both have a direct significance as well as an indirect significance depending on the context." Thus the expression used "other similar arrangements" used in clause (90a) of Section 65 and "any other service in relation to such renting" used in Section 65 (105) (zzzz) would br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of goods. Therefore, even though our Constitution does not make a clear distinction between direct and indirect taxes, there is no doubt that the exemption provided in Article 289 (1) from Union taxation is from taxes on property and not to indirect taxes like duties of customs and excise which are in their essence trading taxes and not taxes on property. 36............. 37................. 38. For the reasons given above, it must be held that the immunity granted to the States in respect of Union taxation does not extend to duties of customs including export duties or duties of excise. The answer to the three questions referred to us must therefore, be in the negative." The same principle, in our humble opinion, would apply to service tax which is also an indirect tax. The law does not distinguish between the Government and non-Governmental agencies. It merely says that the activities of rendering of services (as defined in law) would be leviable to tax. In A.P. State Road Transport Corporation v. ITO [1964] 52 ITR 524, the Supreme Court, dealing with the claim of the A.P.S.R.T.C., constituted under the notification is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia. Governments are not run on mere Bank Guarantees. We notice that very often some courts act as if furnishing a Bank Guarantee would meet the ends of justice. No governmental business or for that matter no business of any kind can be run on mere Bank Guarantees. Liquid cash is necessary for the running of a Government as indeed any other enterprise. We consider that where matters of public revenue are concerned, it is of utmost importance to realise that interim orders ought not to be granted merely because a prima facie case has been shown. More is required. The balance of convenience must be clearly in favour of the making of an interim order and there should not be the slightest indication of a likelihood of prejudice to the interest. We are very sorry to remark that these considerations have not been borne in mind by the High Court and interim order of this magnitude had been granted for the mere asking." 6.7 Considering the fact that the appellant does not have a prima facie case, especially for the period post 01/07/2010 and also taking into account the financial hardship pleaded, we direct the appellant to make a pre-deposit of Rs. 20 Crore (Rupees Twenty Crore only), w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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