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TMI Blog2024 (12) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... ls under the term Governmental Authority. Rajkot Municipal Corporation - HELD THAT:- As regard the Rajkot Municipal Corporation, to whom the construction service was provided by the respondent, it is a local body of government and the Serial No. 12A clearly provides exemption to the Municipal Corporation which is a part of the Government. GIDC, i.e. Gujarat Industrial Development Corporation - HELD THAT:- GIDC, i.e. Gujarat Industrial Development Corporation, is a department of State Government for which the respondent has constructed an Engineering College, therefore, the service recipient M/s GIDC being a governmental authority thus, the construction service is exempted. Moreover, the nature of construction is for Engineering College which is education of this reason also, the same is not taxable. Thus, there is no doubt that the respondent have provided construction service to the Governmental Authority, therefore, the said construction service is exempted under Notification 25/2012-ST. The learned Commissioner has thoroughly examined the legal provision related to the Exemption Notification as well as the definition of Governmental Authority and came to the correct conclusion t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce tax on services received by GIDC for construction of Engineering College at Navsari (Rs. 98,98,226/-) because GIDC has not been given any mandate in respect of promotion of education. Therefore, GIDC cannot be considered to be a governmental authority so far as the construction of Engineering College for Imparting education is concerned. D. Services Provided to Tourism Corporation of Gujarat Ltd. for construction of Fossil park at Kheda (Rs. 57,723/-), as TCGL has been set up by the Govt. of Gujarat for promoting cultural heritage and to boost tourism in the state therefore TCGL is Govt. Authority, hence services provided by TCGL is exempt from service tax. E. Department in the present appeal that the Adjudicating Authority has not examined the fact that ICAI does not carry out any function entrusted to a municipality under Article 243W of the Constitution. The respondent submits that the Adjudicating Authority has given clear findings on this issue. The definition of Governmental Authority provided under the Notification No. 2/2014-ST dated 30.01.2014 lays down that the Governmental Authority means an authority or a board or any other body - (i) Setup by an Act of the Parliamen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otels Pvt Ltd. 2018 (19) GSTL 650 (Tri. Hyd.) Commr vs Sarovar Hotels P Ltd. 2019 (22) GSTL J30 (SC) 3. Shri Amal Dave with Shri Parth Rachchh, learned counsel appearing on behalf of the respondent made the following submissions: (A) Whether construction services provided to ICAI are exempt under Notification No.25/2012-ST. It is submitted that the Commissioner has dropped the demand for construction undertaken for ICAI considering it to be a Government authority and covered by exemption Notification No.25/2012-ST. The Commissioner has also relied upon the decision of M/s. Shapoorji Paloonji Company Pvt. Ltd. reported at 2016 (42) STR 681 .It is submitted that the decision relied upon by the Commissioner is confirmed by the Hon'ble Supreme Court vide a detailed decision reported at 2023 (79) GSTL 145 whereby the Hon'ble Supreme Court held that institutes like IIT Patna and NIT were set up under Indian Institutes of Technology Act, 1961 and National Institutes of Technology Act, 2007 and such institutes are a governmental authority and hence services provided to such institutes are exempt from payment of tax under Notification Nos.2/2014-ST and 25/2012-ST. Furthermore, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) occupied, or to be occupied, primarily with; or (ii) engaged, or to be engaged, primarily in, commerce or industry, or work intended for commerce or industry , but does not include such services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams; . 65(105)(zzzza) (works Contract):- Explanation. - For the purposes of this sub-clause, works contract means a contact wherein, - (i) transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods, and (ii) such contract is for the purposes of carrying out, - (a) erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise, installation of electrical and electronic devices, plumbing, drain laying or other installations for transport of fluids, heating. ventilation or air-conditioning including related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircases or elevators; or (b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame has to be used for commerce or industry. In other words, both the service categories namely commercial or industrial construction services and the works contract service, exclude the construction of a new building or a civil structure when done for non-commercial purposes. The Hon'ble Tribunal in the case of Jyoti Sarup Mittal reported at 2017 (3) GSTL 478 held that construction activity done for universities like constructing hostel, staff quarters etc. would be in the nature of non-commercial activities and hence would not be leviable to service tax. The Hon'ble Tribunal in the case of M/s. Era Infra Engineering Pvt. Ltd. reported at 2018 (19) GSTL 52 held that construction of hostel for NIT Calicut would not be leviable to service tax inasmuch as the hostel cannot be considered as a building which is used for business, commerce or commercial building. Therefore, it is a settled legal position that for the construction activity to be taxable under the commercial or industrial construction service or works contract service, the activity of construction should have been done primarily for the civil structure to be used in commerce or industry. In the facts of the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... municipality under article 243W of the Constitution; From the above exemption entry, it is clear that any construction service provided to the Governmental Authority is exempted under Notification No. 25/2012-ST. The issue that whether the service recipients as mentioned above are Governmental Authority or not, we find that in case of ICAI, it is established under Chartered Accountant Act, 1949 enacted by Parliament of India and Government of India, Ministry of Corporate Affairs and the same is under absolute control of the Government, therefore, the ICAI clearly falls under the term Governmental Authority. 6. As regard the Rajkot Municipal Corporation, to whom the construction service was provided by the respondent, it is a local body of government and the Serial No. 12A clearly provides exemption to the Municipal Corporation which is a part of the Government. As regards, GIDC, i.e. Gujarat Industrial Development Corporation, is a department of State Government for which the respondent has constructed an Engineering College, therefore, the service recipient M/s GIDC being a governmental authority thus, the construction service is exempted. Moreover, the nature of construction is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arification Notification was, therefore, introduced which expanded the definition of governmental authority and 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 under Article 243W of the Constitution. 16 . While the aforesaid interpretation of amended clause 2(s) has been upheld by the Patna High Court, the appellants have countered the same by submitting that the amended definition of governmental authority as in clause 2(s) should be interpreted in a manner so as to make the long line under clause 2(s) applicable to both sub-clause (i) and sub-clause (ii). In other words, as per the appellants, to qualify as a governmental authority under clause 2(s)(i), such authority, board or body must not only be a statutory authority set up by an Act of Parliament or a State Legislature but must also have 90% or more participation of the Government by way of equity or control to carry out any like function ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Just as Parliament is not expected to use unnecessary expressions, Parliament is also not expected to express itself unnecessarily. Even as Parliament does not use any word without meaning something, Parliament does not legislate where no legislation is called for. Parliament cannot be assumed to legislate for the sake of legislation; nor can it be assumed to make pointless legislation. Parliament does not indulge in legislation merely to state what it is unnecessary to state or to do what is already validly done. Parliament may not be assumed to legislate unnecessarily. 22 . Having noticed some of the precedents in the field of interpretation of statutes, we now move on to a little bit of English grammar. The word or as well as the word and is a conjunction; and it is well known that a conjunction is used to join words, phrases, or clauses. On how the conjunctions or and and are to be read, guidance could be drawn from authoritative texts and judicial decisions. As per Justice G.P. Singh s Principles of Statutory Interpretation, the word or is normally disjunctive while the word and is normally conjunctive. In English law, the position is clear as crystal, as explained by Lord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case, the 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). 25 . Applying a different lens, let us test the worth of Ms. Bagchi s submission in the light of the punctuations in clause 2(s). It has been held by a Bench of nine Hon ble Judges of this Court in Kantaru Rajeevaru v. Indian Young Lawyers Association Ors. [(2020) 9 SCC 121, para 18] that when a provision is carefully punctuated and there is doubt about its meaning, weight should undoubtedly be given to the punctuation; however, though a punctuation may have its uses in some cases, but it cannot certainly be regarded as a controlling element and cannot be allowed to control the plain meaning. While so observing, this Court considered several decisions as well as the punctuation comma in the relevant provision of the Supreme Court Rules, 2013. 26 . What follows is that punctuation, though a minor element, may be resorted to for the purpose of construction. 27 . In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clauses (i) and (ii), then the intention of redefining governmental authority would certainly be defeated. As discussed earlier, the purpose for which governmental authority was re-defined must have been to make it workable. We cannot, therefore, resort to a construction that would allow subsistence of the unworkability factor. Assuming what Ms. Bagchi contended is right, it was incumbent for the appellants to bring to our notice, if not by way of pleading, but at least with reference to the relevant statutes, which of the particular authorities/boards/bodies are created by legislation - Central or State - with 90% or more participation by way of equity or control by Government . Each word in the definition clause has to be given some meaning and merely because promoting educational aspects is one of the functions of a municipality in terms of Article 243W of the Constitution read with Schedule XII appended thereto is no valid argument unless equity or control by the Government, to the extent of 90%, is shown to exist qua the relevant authority/board/body. Incidentally, neither is there any indication in the petition nor has Ms. Bagchi been able to disclose the identity of any such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng governmental authority and now it is a task entrusted to the courts to interpret the law. It is, at this juncture, important to notice the law laid down by this Court, speaking through Hon ble O. Chinnappa Reddy, J. in GirdhariLal Sons v. BalbirNathMathur [(1986) 2 SCC 237]. The position of law was affirmed in the following terms : Where different interpretations are likely 6. to be put on words and a question arises what an individual meant when he used certain words, he may be asked to explain himself and he may do so and say that he meant one thing and not the other. But if it is the legislature that has expressed itself by making the laws and difficulties arise in interpreting what the legislature has said, a legislature cannot be asked to sit to resolve those difficulties. The legislatures, unlike individuals, cannot come forward to explain themselves as often as difficulties of interpretation arise. So the task of interpreting the laws by finding out what the legislature meant is allotted to the courts. Of course, where words are clear and unambiguous no question of construction may arise. Such words ordinarily speak for themselves. Since the words must have spoken as clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) (d) G. Ramamoorthi Construction (1) P. Limited vs. Comm (Adj.), Coimbatore - 2015(40) STR 632 (Mad.) 2. Accordingly he submits that the services that are provided to educational institutions cannot be termed as service provided for Commercial and Industrial Construction Services as has been held in the cases cited supra. Therefore, not only the services are not covered under works contract but also are not commercial services to be covered under Commercial and Industrial Construction Services. Having gone through various judgments we are in agreement with the advocate, as no contrary judgment has been pointed out by the learned AR. The decision relied upon by the Adjudicating Authority was only a prima-facie decision in a stay matter. 3. Accordingly, we are of the view that appeal is allowable. The appeal is allowed with consequential relief. CGST, Jaipur vs Jatan Construction Pvt. Ltd. 2019 (24) GSTL 552 (Raj.) 17.1 I have carefully gone through the case records, including defense reply and submissions made during personal hearings. The issues before me to decide is (I) whether assessee is sub-contractor of M/s. National Building Construction Corporation Ltd. (NBCC)? (II) wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o made payments. I find that assessee acted as per terms and conditions specified in their letter of agreement and provided specific services as required by M/s. NBCC. I find that assessee acted as sub-contractor of M/s. NBCC. 17.5 Now the question would arise as to under which service the construction activity undertaken by the assessee for two projects will be classified. Whether it is commercial and industrial construction or works contract. I find that assessee vide their letter, dated 23-8-2011, in their reply to show cause notice and during personal hearings have contested that their construction activity do not fall under the category of works contract service it exclusively falls under 65(105)(zzq) i.e. construction service. Since the projects, pertained to hospital and hostel, belonging to government department, the same are neither commercial nor industrial, but are for general public utility and charitable in nature. Therefore, they are exempted from levy of service tax. I find that criteria to classify the service under any specific category will depend upon the terms and conditions of the contract, dated 15-1-2009 and 3-3-2009 wherein it is specifically mentioned that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of Banglore Tribunal in Ramky Infrastructure Ltd. v Commr. of Service Tax, Hyderabad, reported in 2013 (29) S.T.R. 33 (Tri. Bang.) wherein it has been held as under :- 10.1 Whether, in the case of each of the two JVs, the service provided to the Government of Andhra Pradesh is classifiable as WCS has to be determined from the nature of the relevant contracts as understood by the parties thereto as also from the scope of the works executed under the contracts. Of-course, this exercise has to be undertaken with reference to the definition of works contract embodied in Explanation to Section 65(105)(zzzza) of the Finance Act, 1994. 10.12 The definition of commercial or industrial construction service excludes services provided in respect of certain specified items including dams Similarly the definition of site formation and clearance, excavation and earth moving and demolition excludes services provided in relation to certain specified items including irrigation . Therefore, according to the counsel for the appellants, any service provided in relation to dams and irrigation should be deemed to have been excluded from the purview of works contract service as well. There ..... X X X X Extracts X X X X X X X X Extracts X X X X
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