TaxTMI 
TaxTMI 
2013 (2) TMI 156
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....question of law : "Whether the service provided by couriers/angadias for delivery of cash received at one place and handed over at another place is a taxable service covered under the definition of Courier Agency under provisions of Section 65(33) of the Finance Act, 1994?" 4. The assessees are the members of All India Angadia Association and are engaged in providing services for transport of valuable documents like diamond packets and other articles of gold and silver from various branches to their Head Office and from the Head Office to branches, accordingly inter branch transports are effected. Door to door service is also provided whenever and wherever required. 5. Show cause notices came to be issued to members of the association, demanding Service tax under Section 73(a) of the Finance Act, 1994 (hereinafter referred to as "the Act") for recovery of interest at the appropriate rate under Section 75 of the Act on the amount of demand and for imposing penalty under Sections 76, 77, 78 and 79 of the Act. The show cause notices culminated into an orders-in-original confirming the demand under Section 73(2) read with Section 72 of the Finance Act, 1994 along wit....
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....ngadias may be involving themselves in the physical transportation of cash, in case they are not able to arrange the amount at destination as is evident from the events cited in the order-in-original. 8. It was submitted that it appears that the word "document" and the word "article" have been used in common parlance and are applicable to any service which a courier agency usually provides or is able to provide for transportation and delivery at the destination. Accordingly, these words also cover cash/currency notes. It was urged that the Tribunal was, therefore, not correct in holding that the tender of Indian currency and its transactions and compensatory payments would not be covered by the levy of Service tax. 9. On the other hand, Mr. Paresh Dave, learned advocate appearing on behalf of the respondent assessees opposed the appeals. Inviting attention to the definition of "courier agency" as defined under Clause (33) of Section 65 of the Finance Act, 1994, it was submitted that the same contemplates door-to-door transportation of time-sensitive documents, goods or articles utilizing the services of a person, either directly or indirectly, to carry or accompany ....
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....If the subject falls squarely within the letter of law he must be taxed, howsoever inequitable the consequences may appear to the judicial mind. If the Revenue seeking to tax cannot bring the subject within the letter of law, the subject is free no matter that such construction may cause serious prejudice to the Revenue. [c] The decision of the Supreme Court in the case of Mathuram Agrawal v. State of M.P., (1999) 8 SCC 667, was cited for the proposition that the intention of the legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act, it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. [d] The decision of the Supreme Court in the case of CWT v. Ellis Bridge Gymkhana, (1998) 1 SCC 384, was cited for the proposition that the rule of construction of a charging section is that before taxing any person, it must be shown that he falls within the ambit of the charging....
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....Clause (33) of Section 65 of the Act, which reads thus : "(33) "courier agency" means any person engaged in the door-to-door transportation of time-sensitive documents, goods or articles utilising the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles." 15. Thus, for a person to fall within the ambit of "courier agency" as defined under Clause (33) of Section 65 of the Act, the following ingredients would be required to be satisfied : (i) Such person should be engaged in door-to-door transportation; (i) the transportation should be of time-sensitive documents, goods or articles; (iii) such transportation should be carried out by utilising the services of a person, either directly or indirectly; (iv) the person whose services are so utilised should carry or accompany such documents, goods or articles. 16. On a plain reading of Clause (33) of Section 65 of the Act, it is apparent that the same envisages actual transportation of time-sensitive documents, goods or articles by a person, who utilises the services....
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.... reasoning was that in fiscal statutes what you have got to look to is not the spirit of the statute but the letter of the law; and if you could not bring a particular tax within the letter of the law, the subject could not be made liable for the same. Our attention was drawn in this connection to the observations of Lord Russell of Killowen in Inland Revenue Commissioners v. Duke of Westminster, "I confess that I view with disfavour the doctrine that in taxation cases the subject is to be taxed if in accordance with a Court's view of what it considers the substance of the transaction, the Court thinks that the case falls within the contemplation or spirit of the statute. The subject is not taxable by inference or by analogy, but only by the plain words of a statute applicable to the facts and circumstances of his case." As Lord Cairns said many years ago in Partington v. Attorney-General : "As I understand the principle of all fiscal legislation it is this: if the person sought to be taxed, comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bri....
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.... Provident Investment Co. Ltd.; CIT v. Ajax Products Ltd. through its Liquidator; CIT v. B.N. Kharwar; CIT v. Vegetables Products Ltd.). The principle is variously expressed by saying that in fiscal statutes one must have regard to the letter of the law and not to the spirit of the law, that the subject cannot be taxed by inference or analogy, that in a taxing Act there is no governing principle to look at and one has simply to go on the Act itself to see whether the tax claimed is that which the statute imposes, that while construing taxing Acts it is not the function of the court to give to the words used a strained and unnatural meaning and that the subject can be taxed only if the Revenue satisfies the court that the case falls strictly within the provisions of the law. 28. The principle thus stated has hardly ever been doubted but it is necessary in the application of that principle to remember that though the benefit of an ambiguity in a taxing provision must go to the subject and the taxing provision must receive a strict construction, "that is not the same thing as saying that a taxing provision should not receive a reasonable construction". If the statute contains ....
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....other words, though what is called equitable construction may be admissible in relation to other statutes or other provisions of a taxing statute, such a construction is not admissible in the interpretation of a charging or taxing provision of a taxing statute. Speaking for the Court in CIT v. Ajax Products Ltd., Subba Rao, J., after citing the passage from the judgment of Rowlatt, J. in the Cape Brandy case said : "To put it in other words, the subject is not to be taxed unless the charging provision clearly imposes the obligation"." 21. In Mathuram Agrawal v. State of M.P. (supra), the Supreme Court held thus : "12. Another question that arises for consideration in this connection is whether sub-section (1) of Section 127A and the proviso to sub-section (2)(b) should be construed together and the annual letting values of all the buildings owned by a person to be taken together for determining the amount to be paid as tax in respect of each building. In our considered view this position cannot be accepted. The intention of the legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambig....
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....as to be construed strictly. If a person has not been brought within the ambit of the charging section by clear words, he cannot be taxed at all. 23. In the facts of the present case, the charging section is Section 66 which provides for charge of Service tax and lays down that there shall be levied a tax at the rate of twelve per cent of the value of taxable services referred to in sub-clause (f) of Clause (105) of Section 65 and collected in such manner as may be prescribed. Sub-clause (f) of Clause (105) of Section 65 of the Act provides that "taxable service" means any service provided or to be provided to any person, by a courier agency in relation to door-to-door transportation of time sensitive documents, goods or articles. Thus, for the purpose of being chargeable to Service tax under Section 66 of the Act, taxable services of the nature provided under Clause (105) of Section 65 would be required to be provided by such person. Insofar as sub-clause (f) of Clause (105) of Section 65 of the Act is concerned, the taxable services should be provided to any person by a courier agency in relation to door-to-door transportation of time sensitive documents, goods or article....