2025-VIL-74-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax - Extended period of limitation, Governmental authority, Vague Show Cause Notice - The Ghaziabad Development Authority (GDA) was served with show cause notices for demand of service tax on renting of immovable property and Mandap Keeper services for the period 2008-09 to 2012-13 – Whether the show cause notice can be termed is vague – Demand invoking extended period of limitation - HELD There is no merits in the contention of the appellant that the show cause notice is vague - the impugned order has specifically considered this issue and after examination of the said show cause notice concluded that there is no vagueness. Even otherwise, till the time the show cause notice is able to communicate the allegations and reasons for the demand being made the same cannot be termed as vague. The show cause notice or in fact any document issued in course of transaction of Government business or in a judicial proceeding is not a document of literature but only means of communication. Till the time the person or whom the said document is issued is able to read and respond to the same, it cannot be termed as vague - the extended period of limitation cannot be invoked against the GDA as there was no fraud, collusion, wilful mis-statement or suppression of facts by the GDA - In the present case, the appellant under a bona fide belief that the activity of renting of immovable property would not attract service tax. Therefore, the demand can be made only for the normal period of one year from the relevant date - the appeal is partly allowed by setting aside the penalties under section 78 of the Finance Act, 1994, while upholding the penalties under section 77. The adjudicating authority to re-determine the service tax liability by limiting it to the normal period of limitation – The appeal is partly allowed Issue 2 - Whether the GDA is a governmental authority exempt from service tax under Notification No. 25/2012-ST dated 20.06.2012 - HELD - the Allahabad High Court in Greater Noida Development Authority case held that the GDA is not a governmental authority or local authority as defined under the service tax law. The letting out of immovable property by the GDA for consideration is a taxable service and not a statutory or mandatory function. Therefore, the GDA is not entitled to the exemption granted to governmental authorities under the said notification.
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