The judgment underscores the importance of the adjudicating authority independently determining the applicability of legal provisions, such as the extended period of limitation, and the nature of the activities in question, as per the Finance Act, 1994.

Judgment :

I. Mahanty, J. In the present writ application, challenge has been made to the demand-cum-show cause notice dated 22.9.2014 under Annexure13 on the basis of the assertion that the petitioner-Bhubaneswar Development Authority (B.D.A.) which has registered under the Service Tax Act for providing “Renting of Immovable Property Services”, classifiable under erstwhile Section 65(105)(zzzz) read with Section 65(66) and 65(67) of the Finance Act, 1994 and thereafter, under Section 66-E of the Act and calling upon to submit their show-cause within 30 days of the receipt of the notice as to why service tax interest/penalty shall not be levied.

2. Mr.G.Mukherji, learned counsel for the petitioner has sought to challenge the issue of demand-cum-show cause notice under Annexure-13, inter alia, essentially on the ground that the conditions precedent for exercise of jurisdiction to invoke the extended period of limitation are wholly absent and the Commissioner has not properly applied his mind to the question as to whether the condition for invoking the extended period of limitation existed and/or acted mechanically and consequently, he submits that the impugned show-cause notice amounts to wrongfully invocation of jurisdiction and hence, ought to be quashed. In this respect, he placed reliance on the judgment of the Hon’ble Calcutta High Court in the case of Infinity Infotech Parks Ltd. v. Union of India, decided on 30.04.2014. In a factual matrix, learned counsel for the petitioner submits that the petitioner-B.D.A. is a statutory body created by the State for the development of infrastructure within the capital area at Bhubaneswar and he submits that on the basis of direction issued by the State Government, the petitioner offered an advertisement for setting of commercial-cum-residential complex, pursuant to which M/s.Unitech Ltd. being the highest bidder was identified for the purpose of carrying out the said project. He submits that the show-cause notice itself indicates that the consideration amount of Rs.52.75 Crore was received by B.D.A. on 14.3.2008 and he further asserts that the taxable service i.e. “Renting of Vacant Land” come into the statute only on 1.7.2010. Consequently, premium received by the BDA prior to the said date, could not have been the subject matter of demand of any service tax thereon. Mr. Mukherji, learned counsel for the petitioner raised various other contentions in this case on merit but the same are not being repeated herein for the sake of brevity and in view of the order we propose to pass.

Mr.P.K.Ray, learned Senior Standing Counsel appearing for the Service Tax Department, on the other hand, placed reliance on Para-3 of the demand-cum-show cause notice and the reply made by the Finance Officer of B.D.A. to the queries raised by the Service Tax Authority as well as the discussion made in Para-4 and Suppression of facts in Para-6 thereof which is quoted hereinbelow:

“4. DISCUSSION

4.1 From the Lease Deed dated 30.09.2010, it is noticed that the title of the Deed has been mentioned as “LEASE OF LAND FOR DEVELOPMENT OF COMMERCIAL USE ZONE PURPOSE IN NEW CAPITAL AREA AT BHUBANESWAR”. The said agreement has been registered with the District Sub-Registrar, Khurda. Hence the agreement is nothing but a valid & legal Lease Deed. In the text of the agreement, the following has been clearly spelt out under Para-B of the agreement.

To quote “…… the company in turn is entitled to construct and develop and transfer their lease hold right for the specified and demarcated portion of the construction (herein after referred to as “Developed Units”) raised on the demised Land to sublessees ………., to unquote.

4.2 It also appears from the agreement dated 30.09.2010 that M/s. Unitech Ltd had lease hold right over the land by virtue of the said lease agreement. The purpose of lease is development, construction of buildings and structures for the activities permissible in commercial use zone and the amount of considera