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TMI Blog2015 (4) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... inserting Entry No.2A which read "Services provided by cord blood banks by way of preservation of stem cells or any other service in relation to such preservation" and thereby the services of the petitioner are recognized as fallen within the ambit of "health care services" and exempted from the whole of the service tax leviable under Section 66 B of the Finance Act. If the amendment introduced by Notification No.4/2014-ST, dated 17.2.2014, is declaratory or clarificatory in nature, it is no doubt, it will have retrospective effect and if the amendment is remedial in nature it can have only a prospective effect unless specifically expressed to the contrary. - amendatory statutes, like original statutes, will not be given retroactive construction, unless the language clearly makes such construction necessary. In other words, the amendment will usually take effect only from the date of its enactment and will have no application to prior transactions, in the absence of an expressed intent or an intent clearly implied to the contrary' and that where a statutory provision is in its nature clarificatory, it will be presumed to be retrospective unless the contrary intention is clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of parts of power driven pumps to be used in the factory and therefore, the subsequent notification is clarificatory nature and it has to be given with retrospective effect. - The said judgement is not applicable in the present case and distinguished. But in the present case, it is not in dispute that the so-called amendment Notification issued by the Government, giving exemption for the first time towards the services provided by cord blood banks by way of preservation of stem cells and hence, it cannot be considered as clarificatory in order to give retrospective effect. - Decided against Petitioner. - Writ Petition No. 672 of 2015 - - - Dated:- 27-3-2015 - S. Vaidyanathan,J. For the Petitioner : Mr Aravind P Datar, SC Mr N Viswanathan For the Respondent : Mr V Sundareswaran ORDER This Writ Petition has been filed, praying for the issuance of a writ of Prohibition, to prohibit the 3rd and 4th respondents from collecting the service tax from the petitioner company for the period from 1.7.2012 to 16.2.2014 as the insertion of entry to Sl.No.2A to Notification No.25/2012-ST dated 20.6.2012 vide amending Notification No.4/2014-ST dated 17.2.2014 was o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the category blood bank and blood transfusion services which is covered under Schedule F of Part XII B. In this regard, the Ministry of Health had issued Notification No. G.S.R. 304(E) dated 09.04.2010 in respect to the process guidelines for collection and preservation of cord blood and upto the stage of release of stem cells for application. The petitioner and others who are engaged in the stem cell banking business are required to comply with the above guidelines. 4. The petitioner company claims that the term storage and warehousing was however defined under section 65(102) of the Finance Act, 1994 to include Storage and Warehousing Services for goods including liquid and gases, but does not include any services provided for storage of agriculture produce or any services provided by a cold storage and since the cold storage services provided by them stood excluded from the levy of service tax in terms of the above definition under Section 65(102) of the Act they were not being subjected to the levy of service tax, for the cold storage activities involved in the above activities undertaken by them. 5. According to the petitioner company, even though the Finance Act, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a memorandum dated 22.5.2013 to the effect that their department has examined the matter in consultation with the National Aids control Organization, Department of Aids Control to recommend that the services rendered by the stem cell banks are part of health care services and hence they may be considered for service tax exemption. Pursuant to the same, the Ministry of Finance, instead of clarifying that the health care services notified under notification no. 25/2012 ST covers the stem cell banks also as per the clear recommendations of the Ministry of Health, made an amendment to the said notification by inserting a new entry 2A below to serial no. 2 Services provided by cord blood Banks by way of preservation of stem cells or any other service in relation to such services vide amending Notification No. 04/2014 dated 17.02.2014 even when the explanation of the terms clinical establishment and Health care services appended to the said notification fully covered their services requiring the grant of the exemption from the payment of service tax. Therefore, according to the petitioner, the amending notification has to be considered as only a clarificatory in nature effective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls with effect from 1.7.2012. Pursuant to his undertaking, the petitioner deposited one crore each on three different dates. As per Sections 73(3) and 73(4) of the Finance Act, service tax, interest and penalty has be to deposited by the person chargeable to service tax during the course of investigation or before issue of show cause notice to dispense with the issue of show cause notice. It is also stated that the writ petition is premature since scrutiny of documents and investigation is underway and upon completion of investigation, show cause notice will be issued to the petitioner quantifying the proposed liability to tax and on such event, the petitioner will be at liberty to contest the tax liability by letting in evidence and it is for the adjudicating authority to come to the conclusion whether the activities of the petitioner fall within the purview of health care services or not by analyzing the evidence on record. With these averments, the respondents sought for dismissal of the writ petition. 9. Heard the learned senior counsel appearing for the petitioner and the learned standing counsel appearing for the respondents 1, 3 and 4 and perused the entire records. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2005) 3 SCC 73; Collector of Central Excise, Shillong versus Wood Craft Products Ltd. reported in (1995) 3 SCC 454; Maharaja Book Depot. Versus State of Gujarat reported in AIR 1979 SC 180; and Commissioner of Income Tax I versus Gold Coin Health Food Private Limited reported in (2008) 9 SCC 622. 11. On the other hand, Mr.V.Sundareswaran, learned standing counsel appearing for the respondents would preliminarily contend that the writ petition is not maintainable since the issue relating to the determination of rate of duty in terms of Section 35G(1) of the Central Excise Act, 1944 read with Section 83 of the Finance Act, has been involved in this writ petition, which falls within the exclusive domain of the Hon'ble Apex Court and this Court has no jurisdiction to entertain the same. In support of his contentions, the learned counsel relied upon the decision of the Hon'ble Apex Court reported in Navin Chemicals Manufacturing and Trading Co.Ltd. versus Collector of Customs, reported in 1993 (68) ELT 3 (SC); and also the orders of this Court in W.P.No.1276 of 2010, dated 17.11.2014 and CMA No.2424 of 2007. 12. As regards the relief sought for by the petitioner f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by which, the services being provided by the petitioner would fall within the category of health care services . Therefore, the learned senior counsel would contend that the petitioner has only sought for writ of prohibition to restrain the respondents 3 and 4 from collecting the service tax by giving retrospective effect of the amendment with effect from 01.7.2012 onwards. Therefore, the question of the determination of rate of duty in terms of Section 35G(1) of the Central Excise Act, 1944 read with Section 83 of the Finance Act does not arise in this writ petition and hence, the writ petition is maintainable. In support of his contentions, the learned senior counsel placed reliance on Bengal Immunity Co. versus State of Bihar versus State of Bihar, reported in (2005) 3 SCC 73; Himmatlal Harilal Mehta versus State of M.P. reported in AIR 1954 SC 403 and M/s.East India Commercial Co.Ltd., Calcutta versus Collector of Customs, Calcutta reported in AIR 1962 SC 1893. 14. Before going into the merits of the case, it is appropriate to deal with the issue regarding maintainability of the writ petition. 15. On analyzing the entire facts of the case coupled with the averments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view that it is for the authorities to determine whether the activities of the petitioner would fall within the meaning of health care services on scrutiny of documents and thorough investigation. 17. Empowered under Section 67 of the Finance Act, 1994, the provisions relating to the levy and collection of service tax were brought into force with effect from 01.07.1994. By Notification No.24/2010-ST, dated 22.6.2010, taxable service relating to health care was introduced under Section 65(105)(zzzzo). Subsequently, it was amended by the Finance Act, 2011 (8 of 2011) substituting the provision of Section 65(105) (zzzzo) to cover services provided or to be provided to any person, (i) by a clinical establishment; or (ii) by a doctor, not being an employee of a clinical establishment, who provides service from such premises for diagnosis, treatment or care for illness, disease, injury, deformity, abnormality or pregnancy in any system of medicine. While levying the tax for the above said health care services, the Government of India, issued an exemption notification No.30/2011-ST, dated 25.4.2011 exempting the above taxable services provided or to be provided conditionally. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch preservation is only a clarificatory nature and whether it should be given with retrospective effect?, this Court is of the view that if the amendment introduced by Notification No.4/2014-ST, dated 17.2.2014, is declaratory or clarificatory in nature, it is no doubt, it will have retrospective effect and if the amendment is remedial in nature it can have only a prospective effect unless specifically expressed to the contrary. Therefore, this Court is inclined to examine whether the so-called amendment, is declaratory/clarificatory or remedial. 20. There is distinction between retrospective and retroactive statute. While the provisions of the legislation may be retroactive, i.e., to cover the transactions which have taken place before the enactment it cannot have a retrospective effect, i.e., it cannot be deemed to have come into force from a backdate. 21. In this regard, it is appropriate to refer the decision of the Hon'ble Supreme Court, reported in K.S.Paripoornan versus State of Kerala , wherein, it has been observed that usually an amendment will take effect only from the date of its enactment and will have no retrospective effect in the absence of an express i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Edn., Vol. 44, paras 921, 922, 925 and 926.) 65. These principles are equally applicable to amendatory statutes. According to Crawford: Amendatory statutes are subject to the general principles... relative to retroactive operation. Like original statutes, they will not be given retroactive construction, unless the language clearly makes such construction necessary. In other words, the amendment will usually take effect only from the date of its enactment and will have no application to prior transactions, in the absence of an expressed intent or an intent clearly implied to the contrary. Indeed there is a presumption that an amendment shall operate prospectively. (See Crawford's Statutory Construction, pp. 622-23) 66. The dictum of Lord Denman, C.J. in R. v. St. Mary, Whitechapell that a statute which is in its direct operation prospective cannot properly be called a retrospective statute because a part of the requisites for its action is drawn from time antecedent to its passing, which has received the approval of this Court, does not mean that a statute which is otherwise retrospective in the sense that it takes away or impairs any vested right acquired unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not countenance the argument that the Rule has a clarificatory nature. The Rule, for the first time, creates a quota and thus crystallises the rights of the direct appointees and the promotees which was not there earlier. It, therefore, cannot be viewed as a clarificatory amendment. Again whether the amendment is clarificatory or not would depend upon the language of the provision as also the other Rules. We have examined the Rules which did not suggest that there was any quota existing as such. In Zile Singh v. State of Haryana reported in (2004) 8 SCC 1, the Hon'ble Apex Court has held in para 13 to 15 as under: 13. It is a cardinal principle of construction that every statute is prima facie prospective unless it is expressly or by necessary implication made to have a retrospective operation. But the rule in general is applicable where the object of the statute is to affect vested rights or to impose new burdens or to impair existing obligations. Unless there are words in the statute sufficient to show the intention of the legislature to affect existing rights, it is deemed to be prospective only - nova constitutio futuris formam imponere debet non praeteritis - a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 392) In National Agricultural Coop. Marketing Federation of India Ltd. v. Union of India reported in (2003) 5 SCC 23, wherein, it has been held as under 16 and 17: 16. There is no fixed formula for the expression of legislative intent to give retrospectivity to an enactment. Sometimes this is done by providing for jurisdiction where jurisdiction had not been properly invested before. Sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the re-enacted law. Sometimes the legislature gives its own meaning and interpretation of the law under which tax was collected and by legislative fiat makes the new meaning binding upon courts. The legislature may follow any one method or all of them. 17. A validating clause coupled with a substantive statutory change is therefore only one of the methods to leave actions unsustainable under the unamended statute, undisturbed. Consequently, the absence of a validating clause would not by itself affect the retrospective operation of the statutory provision, if such retrospectivity is otherwise apparent. 24. Reverting to the case on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner. In WPIL Ltd., case (cited supra), the Hon'ble Supreme Court, having considered the fact that already, the Government issued Notification dated 1.3.1994, giving exemption from imposing excise duty on parts of power driven pumps used in the factory premises for manufacture of power driven pumps and to clarify the position, the subsequent notification dated 25.4.1994 was issued giving exemption towards the goods that are used within the factory of production in the manufacture, held that the subsequent notification was not a new one granting exemption for the first time in respect of parts of power driven pumps to be used in the factory and therefore, the subsequent notification is clarificatory nature and it has to be given with retrospective effect. But in the present case, it is not in dispute that the so-called amendment Notification issued by the Government, giving exemption for the first time towards the services provided by cord blood banks by way of preservation of stem cells and hence, it cannot be considered as clarificatory in order to give retrospective effect. 26. In Golden Coin case (cited supra), the expression income in the statute appearing in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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