2026-VIL-1108-CESTAT-BLR-ST
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SERVICE TAX CESTAT Cases

Service Tax - Renting of Immovable Property - Service Tax Liability on Leasing of Vacant Land - Appellant leased vacant land to various commercial users for storage of goods and industrial purposes during the period from June 2007 to March 2010 – Demand of service tax on the lease rent collected, alleging that renting of vacant land constitutes a taxable service under the definition of renting of immovable property - Commissioner confirmed the demand, observing that vacant land inside the security compound qualifies as land appurtenant to building and is used for furtherance of commerce or business, thereby attracting service tax - Whether renting of vacant land by a major port trust to commercial users for storage and industrial purposes during the period from June 2007 to March 2010 constitutes a taxable service liable to service tax under the definition of renting of immovable property – HELD - The demand for service tax for the period prior to 01.07.2010 cannot be sustained. During the disputed period, the definition of renting of immovable property under Section 65(105)(zzzz) of the Finance Act, 1994, contained an exclusion which clearly excluded vacant land whether or not having facilities incidental to the use of such vacant land. The amendment expanding the scope to cover vacant land given on lease or licence for construction of a building or temporary structure for use in furtherance of business or commerce came into effect only from 01.07.2010. The amendment was not merely clarificatory in nature but significantly altered and expanded the scope of the taxable service prospectively – Further, the decision of the High Court of Allahabad in Greater Noida Development Authority case, held that introduction of the new clause did not alter the taxable event and that renting of vacant land was not taxable prior to 01.07.2010. There is no liability to pay service tax prior to 01.07.2010 for renting of vacant land - The Tribunal upholds the appropriation of the amount collected and paid by the port trust against the demand and sets aside the balance demand for the period prior to 01.07.2010 along with all penalties – The appeal is partially allowed
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