In a recent case, the Delhi High Court has directed the Department to file the appeal against the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) order on service tax for transfer of development rights before the Supreme Court.
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The department/appellant has brought up the question of whether service tax is due on the transfer of development rights. According to the Order, the service would not be subject to taxes. This was contested by the Department in an appeal before the CESTAT, but it was denied due to a lack of time.
The respondent/assessee, Haamid Real Estate Pvt Ltd, questioned whether the current appeal could be maintained in light of Sections 35G and 35L of the Central Excise Act, 1944, which also apply to service tax matters.
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In Commissioner of Service Tax v. Intertoll ICS CE Cons O & M Pvt. Ltd.’, the Court had observed that “though CESTAT has only considered the issue of limitation and the said issue was framed for consideration vide order dated 23rd January, 2024, the nature of the order, which is appealed, has to be considered. The original order passed by the Commissioner considered the question as to whether CENVAT credit was allowable or not, and whether penalty was imposable or not in terms of the applicable law. It also considered the leviability of service tax on excess baggage charges. Merely because CESTAT has only considered the issue of limitation, the present appeal cannot be filed in the High Court.”
In dismissing the appeal from the GST Department, the division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta determined that, under Section 35L of the Central Excise Act, 1944, the Supreme Court would hear an appeal against the CESTAT ruling. The appeal would not be viable before this court, the court ruled. As a result, the appeal is denied, and the appellant is allowed to file a petition before the Supreme Court.
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