Case Law Details
Commissioner Vs Shapoorji Pallonji and Company Pvt. Ltd. & Ors. (Supreme Court of India)
Supreme Court held that services provided by the educational institutions IIT, Patna and NIT, Rourkela to the Government/ local authorities/ governmental authorities are eligible for exemption from service tax.
Facts- The issue involved here is whether the educational institutions in question, viz. (i) the Indian Institute of Technology, Patna (“IIT Patna”) and (ii) the National Institute of Technology, Rourkela (“NIT Rourkela”), are covered by the definition of “governmental authority” in Mega Service Tax Exemption Notification1 (“Exemption Notification”) inter alia exempting various services from the tax network rendered to government, governmental, or local authorities. If “governmental authority” as defined in the Exemption Notification takes within its embrace IIT Patna and NIT Rourkela, they would be eligible for an exemption from the service tax that otherwise applies to construction services provided by service providers or subcontractors within their premises.
Conclusion- The Clarification Notification introduced an amended version of clause 2(s), the whole canvas was open for the author to define “governmental authority” whichever way it wished however, “governmental authority” was re-defined with a purpose to make the clause workable in contra-distinction to the earlier definition and thus it cannot overstep and interpret “or” as “and” to allow the alternative outlined in a clause.
When there was no ambiguity in the words, then no exposition contrary to the words was to be made. It is, therefore, clear as a sunny day that there arises only one plausible construction of clause 2(s) which was the one the Patna High Court adopted and which we are inclined to uphold.
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