GOVIND MATHUR,J. - (1.) In this batch of petitions for writ the issue under consideration before us is relating to applicability of service tax on yearly installments due after April 1, 2016 in respect of assignment of right to use any natural resource, more specifically a mining lease granted by Government in the context to notification No.25/2012-ST dated 20.6.2012 read with notification No. 22/2016 dated 13.4.2016, issued by the Government of India.
(2.) The facto legal background necessary to be noticed to examine the issue under consideration is that the parliament by way of the Finance Act, 1994 (hereinafter referred to as "the Act of 1994") imposed service tax on the services defined and described under Section 65-B(44). The definition since then subjected to amendments time to time and w.e.f. 1.7.2012 system of negative list of service tax was introduced in it. The existing definition of "service" as given under Section 65-B(44) of the Act of 1994 is as follows:- "65B(44) "service means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include- (a) an activity which constitutes merely.- (i) a transfer of title in goods or immovable property, by way of sale, gift or in any other manner; or (ii) a transaction in money or actionable claim; (b) a provision of service by an employee to the employer in the course of or in relation to his employment; (c) fees taken in any Court or tribunal established under any law for the time being in force. Explanation 1. - For the removal of doubts, it is hereby declared that nothing contained in this clause shall apply to.- (A) the functions performed by the Members of Parliament, Members of State Legislative, Members of Panchayats, Members of Municipalities and Members of other local authorities who received any consideration in performing the functions of that office as such member; or (B) the duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity; or (C) the duties performed by any person as a Chairperson or a Member or a Director in a body established by the Central Government or State Governments or local authority and who is not deemed as an employee before the commencement of this section. Explanation 2. - For the purposes of this Chapter,- (a) an unincorporated association or a body of persons, as the case may be, and a member thereof shall be treated as distinct persons; (b) an establishment of a person in the taxable territory and any of his other establishment in a non-taxable territory shall be treated as establishments of distinct person. Explanation 3. - A person carrying on a business through a branch or agency or representational office in any territory shall be treated as having an establishment in that territory; Explanation 4. - A person carrying on a business through a branch or agency or representational office in any territory shall be treated as having an establishment in that territory; Sub clause (i) of sub clause (a) of the aforesaid subsection clearly exempts the transfer of goods or immovable property from charge of service tax." The Act of 1994 also interprets the term "declared services" under Section 66-E and that is as follows:- "Declared services.- The following shall constitute declared services, namely:- renting of immovable property construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration is received after issuance of completion-certificate by the competent authority. Explanation. - For the purpose of this clause.- (I) the expression "competent authority" means the Government or any authority authorized to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely:- architect registered with the Council of Architecture constituted under the Architects Act, 1972 (20 of 1972); or chartered engineer registered with the Institution of Engineers (India); or licenced surveyor of the respective local body of the city or town or village or development or planning authority; (II) the expression "construction" includes additions, alterations, replacements or remodeling of any existing civil structure; temporary transfer of permitting the use or enjoyment of any intellectual property right; development, design, programming, customization, adaption, upgradation, enhancement, implementation of information technology software; agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; transfer of goods by way of hiring, leasing, licensing or in any such manner without transfer of right to use such goods; activities in relation to delivery of goods on hire purchase or any system of payment by installments; service portion in the execution of a works contract; service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity; assignment by the Government of the right to use the radio-frequency spectrum and subsequent transfers thereof."
(3.) It is also relevant to mention that Section 65 of the Act of 1995 clarifies the transfer of immovable properties and i.e. as under:- "[90a] "renting of immovable property" includes renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course of furtherance of business or commerce but does not include - (i) renting of immovable property by a religious body or to a religious body; or a. renting of immovable property to an educational body, imparting skill or knowledge or lessons on any subject or field, other than a commercial training or coaching centre. Explanation 3[1].- For the purposes of this clause, "for use in the course or furtherance of business or commerce" includes use of immovable property as factories, office buildings, warehouses, theaters, exhibition halls and multiple-use buildings;] [Explanation 2.- For the removal of doubts, it is hereby declared that for the purposes of this clause "renting of immovable property" includes allowing or permitting the use of space in an immovable property, irrespective of the transfer of possession or control of the said immovable property;]";