TaxTMI 
TaxTMI 
2015 (4) TMI 290
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....at various locations in India, for collection, processing, cryo-preservation and release of stored samples for transplantation of umbilical cord blood and tissue stem cells, which are required in treating over 80 adverse medical conditions such as leukemia, lymphoma, myeloma, sickle-cell anemia, thalassemia, etc. The above activity of the petitioner/company involves application of proper technology for the preservation of stem cells for over number of years for use of the baby as well as its near and dear siblings in appropriate clinical treatment. The petitioner claims that the above activities undertaken by it can be termed as "Health Care Services". The services rendered by the petitioner/company among other things involved the collection of the umbilical blood and tissue in a special kit provided by them by sending their paramedics to the concerned hospital, carrying out appropriate process on the said umbilical cord blood by placing them in pilot bags (5 ml) and main bag (20 ml) sealed and stored in cold storage maintained at a particular concentration to make it available in case of necessity to the person for transplantation. For carrying out their above activities, the peti....
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....d the term services for the first time under Sec. 65(44) of the Act, while also notifying certain services under Sec. 66D as Negative List of services on which no service tax was leviable. In addition to the above, a mega exemption Notification No.25/2012-ST dated 20.06.2012 was issued providing for exemption from the payment of service tax on certain taxable services. Even though substantial changes were made to the provisions contained in the Finance Act, 1994 through the above amendments even then the amended provisions in general continued the earlier provisions specifically excluding certain service activities or granting the exemption from the payment of service by specifying it either under the negative list or under the mega exemption notification. The petitioner admits accordingly the health related services which were hitherto enjoying the exemption under Notification No. 30/2011 ST was notified against Sl.No.2 of Notification No.25/2012 ST dated 20.05.12 whereby the exemption was continued to be extended to the health care services. 6. The grievance of the petitioner is that while their activities were kept out of the levy of the service tax, however, in the Finance A....
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....espondents 3 and 4 from collecting service tax from the petitioner company from 01.7.2012 to 16.2.2014. 8. Resisting the claim of the petitioner, the respondents 1, 3 and 4 have filed a common counter affidavit, stating that the issue involved in this writ petition is applicability of exemption notification which relates to rate of duty and in terms of Section 35(G)(1) of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994, the jurisdiction of the High Court is barred even for statutory appeal arising out of CESTAT orders, relating, among other things, to the determination of any question having a relation to rate of duty, fall within the exclusive domain of Hon'ble Apex Court, hence, the writ petition under Article 226 of the Constitution is not maintainable. It is also stated that considering the representation made by the Association of Stem Cell Banks of India to the first respondent, the said mega exemption notification dated 20.6.2012 was amended by 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". Since a specific entry was inserted....
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....012-ST dated 20.06.2012, however, pursuant to the efforts taken by the petitioner and the Association of Stem Cell Banks of India with the Ministry of Health & Family Welfare, which issued a memorandum dated 22.5.2013 to the first respondent recommending that the services rendered by the stem cell banks are part of health care services, the said mega exemption notification dated 20.6.2012 was subsequently amended by 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. He contended that the above amendment by inserting Entry No.2A immediately below to Entry 2, i.e. by assigning same number, i.e. 2 adding with an alphabet 'A' in the mega notification, dated 20.6.2012, it has to be treated that such amendment is only a clarificatory in nature and though the amendment is with effect from 17.2.2014, it has to be given with retrospective effect and thereby, exemption f....
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....owards the services provided by the petitioner is also yet to be determined and prima facie, it appears that the activities of the petitioner did not fall within the ambit of "health care services" as claimed by the petitioner. He also contended that the writ petition itself is premature as it is for the authorities to determine whether the activities of the petitioner would fall within the meaning "health care services" on scrutiny of documents and thorough investigation, therefore, the self-claim sought for by the petitioner that as if the amendment of Entry 2A is squarely applicable to their services and has to be given effect retrospectively cannot be sustained. He would also contend that even assuming that the amendment would apply to the services provided by the petitioner, it is settled law that any amendment which brought subsequently, cannot have retrospective since it is not clarificatory nature. With these contentions, the learned counsel sought for dismissal of the writ petition. 13. In reply regarding the maintainability, the learned senior counsel appearing for the petitioner would contend that in this writ petition, it has been specifically sought for issuance of ....
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....ided by cord blood banks by way of preservation of stem cells or any other service in relation to such preservation" is only a clarificatory nature and whether it should be given with retrospective effect?" Therefore, as rightly contended by the learned senior counsel, the issue 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. The specific contention of the learned senior counsel for the petitioner is that the above said amendment is only a clarificatory nature and it should be given with retrospective effect and thereby, the respondents 3 and 4 should be prohibited from collecting service tax from 01.7.2012 onwards by way of writ of prohibition. Therefore, since this Court is inclined to delve upon the issue involved in this Writ Petition, "whether the so-called amendment i.e. Entry No.2A brought into the exemption Notification, dated 20.6.2012 by Notification No.4/2014-ST dated 17.2.2014 to the effect that "Services provided by cord blood banks by way of preservation of stem cells or any other service in....
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.... Central Board of Excise and Customs (CBEC) has further issued "Mega Exemption Notification" vide Notification No. 25/2012-Service Tax dated 20th June, 2012, enlisting the services which shall be exempted from the payment of service tax with effect from 1st July, 2012. With the enforcement of Finance Act 2012, Section 65 relating to the "definitions" of the various terms relating to the service tax has been omitted. However, two important sections which have been introduced defining the new service tax code, viz., Section 65B which provides for a whole new set of definitions in context of taxable services under the head "Interpretations" and Section 66D which states the "Negative list of service". 18. It is to be noted that the services provided by the petitioner, viz., collection of umbilical blood and tissue and preserving in cold storage, has not been included in the "Negative list of service" to claim exemption of service tax. However, according to the petitioner, pursuant to the efforts taken by the petitioner and the Association of Stem Cell Banks of India, the Ministry of Health & Family Welfare, issued a memorandum dated 22.5.2013 to the first respondent recommending tha....
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....te dealing with substantive rights is prima facie prospective unless it is expressly or by necessary implication made to have retrospective effect, a statute that concerns mainly matters of procedure or evidence or which is declaratory in nature has to be construed as retrospective unless there is a clear indication that such was not the intention of the Legislature. It has been held by the Hon'ble Apex Court as under in para 64 to 66: "64. A statute dealing with substantive rights differs from a statute which relates to procedure or evidence or is declaratory in nature inasmuch as while a statute dealing with substantive rights is prima facie prospective unless it is expressly or by necessary implication made to have retrospective effect, a statute concerned mainly with matters of procedure or evidence or which is declaratory in nature has to be construed as retrospective unless there is a clear indication that such was not the intention of the legislature. A statute is regarded as retrospective if it operates on cases or facts coming into existence before its commencement in the sense that it affects, even if for the future only, the character or consequences of transactio....
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.... not be operating prospectively if it creates new rights and duties arising out of past transactions. The question whether a particular statute operates prospectively only or has retrospective operation also will have to be determined on the basis of the effect it has on existing rights and obligations, whether it creates new obligations or imposes new duties or levies new liabilities in relation to past transactions. For that purpose it is necessary to ascertain the intention of the legislature as indicated in the statute itself." 22. From the above decision, it is clear that 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 indicated by the Legislature, the reason being that its underlying purpose of ex....
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....ially in a case where the new law is made to cure an acknowledged evil for the benefit of the community as a whole (ibid., p. 440). "14. The presumption against retrospective operation is not applicable to declaratory statutes. In determining, therefore, the nature of the Act, regard must be had to the substance rather than to the form. If a new Act is "to explain" an earlier Act, it would be without object unless construed retrospectively. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that if a statute is curative or merely declaratory of the previous law retrospective operation is generally intended. An amending Act may be purely declaratory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect (ibid., pp. 468-69). "15. Though retrospectivity is not to be presumed and rather there is presumption against retrospectivity, according to Craies (Statute Law, 7th Edn.), it is open for the legislature to enact laws having retrospective operation. This can be achieved by express en....
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....erefore, the intention of the legislature is clear that bringing the services provided by cord blood banks by way of preservation of stem cells under the exemption Notification in order to give exemption of service tax, however, it has not been specifically mentioned that the said amendment should be with effect from the date of exemption Notification. i.e. 20.6.2012, wherein, originally, Entry No.2 has been inserted, giving exemption towards healthcare services by clinical establishment, an authorised medical practitioner or para-medics. Therefore, by virtue of such amendment, it should be construed that the establishments which provides the above said services will get exemption of service tax with effect from the date of amendment, i.e. 17.2.2014 only and they cannot claim it with retrospective effect. The uncontroverted position is that before the amendment came into force, for the services provided by the cord blood banks were leviable and in fact, the petitioner has also paid Rs. 1 Crores each towards service tax with effect from 01.07.2012. Therefore, from 17.2.2014 onwards, by virtue of amendment, the said services were exempted from levy of service tax, which by itself exp....
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....liance Jute and Industries Ltd. v. CIT [(1980) 1 SCC 139 : 1980 SCC (Tax) 67 : (1979) 120 ITR 921] . After an elaborate and detailed discussion, the Apex Court held with reference to the charging provisions of the statute that the expression "income" should be understood to include losses. The expression "profits and gains" refers to positive income whereas "losses" represents negative profit or in other words minus income. Considering this aspect of the matter in greater detail, the Apex Court overruled the view expressed by the two learned Judges in "Virtual Soft Systems [(2007) 9 SCC 665 : (2007) 289 ITR 83]. The Apex Court adopted the proposition of law that though retrospectivity is not to be presumed and rather there is presumption against regtrospectivity, it is open for the legislature to enact laws having retrospective operation. This can be achieved by express enactment or by necessary implication from the language employed and if it is a necessary implication from the language employed that the legislature intended a particular section to have a retrospective operation, the courts will give it such an operation and in the absence of a retrospective operation having been ....