Delhi Development Authority Vs Commissioner of Service Tax (CESTAT New Delhi)
Summary: The CESTAT New Delhi disposed of two appeals filed by Delhi Development Authority (DDA) arising from orders concerning service tax liability on activities involving Renting of Immovable Property and Club Services. The first appeal was Service Tax Appeal No. 50278 of 2017, arising from Order-in-Original No. DLI-SVTAX-002/COM-020/2016-17 dated 30.09.2016. The second was Service Tax Appeal No. 50191 of 2021, arising from Order-in-Original No. 11-14/TPS/PC/CGST/DSC/2020-21 dated 16.09.2020. The periods and amounts involved in the two appeals included substantial demands relating to lease/premium receipts and other activities.
DDA was registered with the Service Tax department for services including Mandap Keeper Service, Health and Fitness Service, Architect Service and Club or Association Service. Audit proceedings revealed that DDA was receiving amounts from Renting of Immovable Property for commercial use without registration under that service and without payment of service tax. Show cause notices were consequently issued proposing demand and recovery of service tax, and the proposals were confirmed through the respective orders-in-originals.
At the hearing on 13.05.2026, none appeared for DDA. The Departmental Representative argued that DDA is a corporate body managed under Section 3(3) of the Delhi Development Authority Act, 1957, but that the statutory character of an authority does not by itself exclude its taxable commercial activities. Reliance was placed on a Chennai Bench decision concerning a municipality, as well as the Larger Bench decision in RIICO Ltd. The Revenue contended that lease premium/salami and ground-rent related receipts were liable to service tax even though DDA claimed to be merely a custodian of Nazul land belonging to the Government of India.
