Constitutional validity of fiscal definition of "person" upheld despite mismatch with other statutes

The definition of "person" in Section 65B(37)(vii) of the Finance Act, 2012, which includes an association of persons or body of individuals whether incorporated or not, was upheld against a constitutional challenge. The Court held that Parliament had legislative competence to define the term for service tax purposes, and the definition could not be invalidated merely because it differed from the General Clauses Act or the Income-tax Act. In the absence of arbitrariness, discrimination, or violation of Article 14, no basis existed for interference under Articles 226 and 227.

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Issues: Whether the definition of "person" in Section 65B(37)(vii) of the Finance Act, 2012, including an association of persons or body of individuals whether incorporated or not, was unconstitutional or liable to be read down in the context of co-owners receiving rent individually.

Analysis: The petitioners challenged the statutory definition by comparing it with Section 3(42) of the General Clauses Act, 1897 and Section 26 of the Income-tax Act, 1961. The Court held that the Parliament had legislative competence to define the expression "person" in the service tax statute. A fiscal definition cannot be struck down merely because it differs from another enactment. In the absence of any showing that the provision was arbitrary, discriminatory, or otherwise violative of Article 14 of the Constitution of India, no ground existed for constitutional invalidation or interference under Articles 226 and 227 of the Constitution of India.

Conclusion: The challenge to Section 65B(37)(vii) failed and the provision was upheld; the petitioners were not entitled to the relief sought.

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