Tax/Taxation – Service tax – Exemption from – Eligibility – Educational institutions-IIT Patna and NIT Rourkela if covered by the definition of ‘Government authority’ in Mega Service Tax Exemption Notification No. 25/2012, G.S.R 467(E) dated 20th June, 2012, exempting various service from service tax:
Held: Educational institutions-IIT Patna and NIT Rourkela fall under the amended definition of ‘Government authority’ under clause 2(s) and are eligible for the benefit in the Exemption Notification to the educational institutions and exempted from service tax – Amended definition of ‘government authority’ in clause 2(s) by way of Clarification Notification, has widened the exemption base for service tax to be provided even to an authority or a board or any other body, set up by an Act of Parliament or a State Legislature without the condition of having been established with 90% or more participation by way of equity or control by Government to carry out any function entrusted to a municipality u/Art. 243W – Clarification Notification introduced an amended version of clause 2(s), which re-defined “governmental authority” with a purpose to make the clause workable in contra-distinction to the earlier definition – Decisions of the Patna High Court and the Orissa High Court rightly extending the benefit of the Exemption Notification to the educational institutions, and a fortiori, to SPCL, is upheld – Thus, the impugned judgments and orders are upheld – Constitution of India – Art. 243W. [Paras 30, 34]
Circular/Government order/Notification – Mega Service Tax Exemption Notification – Clause 2(s)(as amended by clarification Notification), defining ‘Government Authority’ – Interpretation of word ‘or’ employed in clause 2(s):
Held: Word “or” employed in clause 2(s) manifests the legislative intent of prescribing an alternative – Going by the golden rule of interpretation that words should be read in their ordinary, natural, and grammatical meaning, the word “or” in clause 2(s) clearly appears to have been used to reflect the ordinary and normal sense, that is to denote an alternative, giving a choice; and, a different meaning cannot be assigned unless it leads to vagueness or makes clause 2(s) absolutely unworkable – Word “or” between sub-clauses
(i) and (ii) indicates the independent and disjunctive nature of sub-clause (i), meaning thereby that “or” used after sub-clause (i) cannot be interpreted as “and” so as to tie it with the condition enumerated in the long line of clause 2(s) which is applicable only to sub-clause (ii) – Literally read, the conjunction ‘or’ between sub-clauses (i) and (ii) clearly divides the two clauses in two parts with the first part completely independent of the second part – First part is by itself complete and capable of operating independently – While the Clarification Notification introduced an amended version of clause 2(s), “governmental authority” was re-defined with a purpose to make the clause workable in contra-distinction to the earlier definition – Thus, this Court cannot overstep and interpret “or” as “and” so as to allow the alternative outlined in clause 2(s) to vanish – There exists no ambiguity insofar as the interpretation of clause 2(s) is concerned – Notification No. 25/2012, G.S.R 467(E) dated 20th June, 2012. [Paras 23, 24, 28]. Circular/Government order/Notification – Mega Service Tax Exemption Notification – Clause 2(s)(as amended by clarification Notification) – Punctuation in clause 2(s) of the Clarification Notification defining ‘Government Authority’ – Interpretation of: Held: Punctuation, though a minor element, may be resorted to for the purpose of construction – Use of a semicolon is not a trivial matter but a deliberate inclusion with a clear intention to differentiate it from sub-clause
(ii) – Upon a plain and literal reading of clause 2(s) that while there is a semicolon after sub-clause (i), sub-clause (ii) closes with a comma, this essentially supports the only possible construction that the use of a comma after sub-clause (ii) relates it with the long line provided after that and, by no stretch of imagination, the application of the long line can be extended to sub-clause (i), the scope of which ends with the semicolon – Thus, the long line of clause 2(s) governs only sub-clause (ii) and not sub-clause (i) because the introduction of semicolon after sub- clause (i), followed by the word “or”, has established it as an independent category, thereby making it distinct from sub-clause (ii) – If the author wanted both these parts to be read together, there is no plausible reason as to why it did not use the word “and” and without the punctuation semicolon – Clarification Notification amended clause 2(s), and redefined “governmental authority” with a purpose to make the clause workable in contra-distinction to the earlier definition – Interpretation of statutes – Notification No. 25/2012, G.S.R 467(E) dt 20.06.2012. [Paras 26, 27]
Interpretation of statutes – Interpretation of the relevant provision – Rules of interpretation:
Held: Plain and ambiguous provision must be interpreted in the same way as it has been stipulated and not in a way that it presumes deficiency and radically changes the meaning and context of the provision – Interpretation of the relevant provision resulting in the expanded scope of its operation cannot in itself be sufficient to attribute ambiguity to the provision – To make a statute workable by employing interpretative tools and to venture into a kind of judicial legislation are two different things – Merely because the statute does not yield intended or desired results, that cannot be reason to overstep and cross the line by employing tools of interpretation to interpret a provision keeping in mind its outcome – Interpretative tools should be employed to make a statute workable and not to reach to a particular outcome. [Paras 20, 32, 33]
Maxims - Quoties in verbis nulla est ambiguitas, ibi nulla expositio contra verba expressa fienda est – Meaning of:
Held: When there is no ambiguity in the words, then no exposition contrary to the words is to be made. [Para 30]
LIST OF CITATIONS AND OTHER REFERENCES
Commissioner of Customs (Import), Mumbai v. Dilip Kumar and Company & Ors. (2018) 9 SCC 1 : [2018] 7 SCR 1191 – held inapplicable. Barun Kumar & Ors. v. State of Jharkhand & Ors. (2022) SCC OnLine SC 1093; Bihar State Electricity Board v. Pulak Enterprises & Ors. (2009) 5 SCC 641; ONGC Ltd v. Afcons Gunanusa JV (2022) SCC OnLine SC 1122; Jindal Stainless Ltd. v. State of Haryana (2017) 12 SCC 1 : [2016] 10 SCR 1; Akshaibar Lal (Dr.) v. Vice-Chancellor, Banaras Hindu University (1961)
3 SCR 386; ITC Limited v. Commissioner of Central Excise, Kolkata (2019)
17 SCC 46 : [2019] 13 SCR 357; Superintendent & Legal Remembrancer, State of West Bengal v. Corporation of Calcutta (1967) 2 SCR 170; Union of India & Ors. v. Ind-Swift Laboratories Ltd. (2011) 4 SCC 635 : [2011] 2 SCR 1087; Commissioner of Sales Tax, U.P. v. Modi Sugar Mills Ltd (1961)
2 SCR 189; Utkal Contractors & Joinery (P) Ltd. v. State of Orissa (1987) 3 SCC 279 : [1987] 3 SCR 317; Green v. Premier Glynrhonwy Slate Co (1928)
1 K.B. 561, page 56; Sri Jeyaram Educational Trust v. A.G. Syed Mohideen (2010) 2 SCC 513 : [2010] 1 SCR 1127; Kantaru Rajeevaru v. Indian Young Lawyers Association & Ors. (2020) 9 SCC 121; Girdhari Lal & Sons v. Balbir Nath Mathur (1986) 2 SCC 237 : [1986] 1 SCR 383 – referred to. Green vs. Premier Glynrhonwy Slate Co (1928) 1 K.B. 561 - referred to. Principles of Statutory Interpretation by Justice GP Singh's - referred to. OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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