TaxTMI 
TaxTMI 
2022 (7) TMI 1233
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....age. FACTUAL ASPECTS 2. The Haj pilgrimage is undertaken by thousands of pilgrims from India, either through the Haj Committee of India (for short, 'the Haj Committee') or HGOs. There is a bilateral treaty between India and the Kingdom of Saudi Arabia. As per the said bilateral arrangement, the Haj pilgrimage can be undertaken from India only through the Haj Committee or HGOs. 3. The service tax regime was introduced in India in the year 1994 under the provisions of the Finance Act, 1994 (for short 'the Finance Act'). Initially, very few services were made subject to payment of service tax. However, by subsequent Finance Acts, a large number of services were added to the list from time to time. The total number of services subjected to service tax exceeded 100. A negative list regime was introduced by Act No.23 of 2012 with effect from 1st July 2012. By Act No.23 of 2012, Sections 66-B and 66-C were added. Section 66-B is the charging Section which provided that there shall be a levy of service tax at the rate of 12% on the value of all services other than those specified in the negative list. By amending Section 66-B, the percentage of service tax was enhanced to 14%. Sec....
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....th May 2020. 5. Most of the writ petitions in the current batch of petitions have been filed by various organisations representing HGOs/PTOs. Only one petition, i.e. Writ Petition (C) No.1329 of 2020, has been filed by an individual petitioner who desires to undertake the Haj pilgrimage. Most of the petitions challenge the aforesaid orders rejecting representations. In some of the petitions, a declaration has been claimed that the provisions of the laws relating to service tax are not applicable to services rendered by HGOs and PTOs to Hajis for performing the religious activity of Haj/Umrah. In some of the petitions, there is a challenge to the validity of Rules 8 and 14 of the 2012 Rules. However, submissions have not been canvassed on the issue of validity. 6. Counter Affidavits have been filed in Writ Petition (C) Nos.755, 856 and 896 of 2020, which have been treated as common affidavits in this group of petitions. 7. At this stage, we may note here that in this batch of petitions, we are not dealing with the issue of extra-territorial operation of the service tax regime, as the said issue is pending for adjudication before another Bench. SUBMISSIONS OF THE PETITION....
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...., this Court, in the case of Union of India & Ors. v. Rafique Shiekh Bhikan and Anr. 2012 (6) SCC 265 held that grant of such a subsidy is contrary to the tenets of Islam as the tenets of Islam require the Haj pilgrims to perform the Haj ceremony with their own funds after discharging their debts and after making a provision for the benefit of their families. The learned senior counsel also relied upon a decision of this Court dated 4th February 2019 in Writ Petition (C) No.4 of 2019 (Federation Haj PTOs of India v. Union of India). He pointed out that the role played by the HGOs and PTOs is unique, which is recognized in both the above decisions. He pointed out that the said decisions note that HGOs/PTOs act as tour operators for pilgrims, provide a complete package right from the start of the journey from various places in India to Saudi Arabia, their arrangements for stay in Saudi Arabia, the performance of Haj Ceremony and safe return to India. He pointed out that the majority of Haj pilgrims are taken care of by the Haj Committee, and only a limited number of pilgrims can undertake Haj pilgrimage through HGOs/PTOs. He pointed out that the cost of the package provided by HGOs/P....
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....erally granted in tax statutes. On this aspect, he relied upon this Court's decision in the case of Government of Kerala & Anr. v. Mother Superior Adoration Convent 2021 (5) SCC 602. 12. His next limb of argument is based on a violation of Article 14 of the Constitution of India. He pointed out that under paragraph 5A of the Mega Exemption Notification and paragraph 63 of IGST Exemption Notification, the services rendered by specified organisations such as Haj Committees for Haj pilgrimage are wholly exempted. He submitted that the provision of granting exemption from service tax/GST only to Haj pilgrimage organised by the Haj Committees will not stand the test of Article 14 of the Constitution of India. He pointed out that usually, a bilateral agreement between the Government of India and the Kingdom of Saudi Arabia is executed every year. A specific quota of Haj pilgrims is assigned by the Kingdom of Saudi Arabia under the bilateral agreement. Out of the said quota, normally 70% is allotted to Haj Committee, and 30% is allotted to approved HGOs. The selection through Haj Committee is done through a lottery system. He pointed out that there is no difference between the service ....
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.... and, therefore, it is leviable only on services provided within the country. 15. He relied upon a decision of CESTAT in the case of Cox & Kings India Ltd. v. Commissioner of Service Tax, New Delhi 2014 (35) S.T.R. 817. He submitted that CESTAT has held that the outbound tours abroad are not liable to levy of service tax. He pointed out that the same view is taken by CESTAT in the case of Atlas Tours and Travels Pvt. Ltd. v. Commissioner of Service Tax, Mumbai 2015-TIOL-306-CESTAT-MUM. He pointed out that this Court upheld the said decision. 16. The learned senior counsel submitted that even if it is assumed that Haj is not a religious ceremony but is an event, Rule 6 of the 2012 Rules will apply, which deals with the place of provision of services relating to events. He urged that if the location of the service recipient is outside the taxable territory, service tax cannot be levied. He also invited our attention to provisions of the GST Act and IGST Act, particularly Sections 12 and 13 of the IGST Act. He urged that the said provisions of the IGST Act are pari materia with the 2012 Rules. Relying upon Article 286(1)(b) of the Constitution of India, he submitted that the sai....
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....not imaginary and has been made on rational basis. He pointed out that this Court held that when tax law operates unequally and which cannot be justified on the basis of any reasonable classification, the law would violate Article 14 of the Constitution. 19. He submitted that the Revenue cannot make such discrimination on the pretext that HGOs operate with a profit motive. He submitted that the said contention has already been negatived by this Court in paragraph 11 and 12 in the case of Rafique Sheikh Bhikan^1. 20. The learned senior counsel, further, submitted that only those who are not selected in the lottery drawn by the Haj Committee, have to go to HGOs. Therefore, the act of imposing service tax on those who are compelled to go through HGOs, is highly discriminatory. 21. He invited our attention to the recommendation of the Fitment Committee placed before the GST Council meeting held on 14th March 2020. The first reason set out therein is that if the exemption is allowed for religious pilgrimage, many other domestic and international tours can be considered as religious pilgrimages. Secondly, all religious pilgrimage tours are made taxable except for those which are....
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.... cases pending before another Bench. 25. The learned ASG pointed out the nature of the regime governing service tax prior to 1st July 2012. Thereafter, he invited our attention to the law as applicable for the period between 1st July 2012 and 30th June 2017. He pointed out the relevant provisions of the 2012 Rules. He invited our attention to Rule 2(h) and submitted that as far as HGOs/PTOs are concerned, they are located within India. Relying upon the definition of 'location of service recipient' in Rule 2(i), he submitted that by virtue of sub-clause (iv) of clause (b) thereof, in the case of the service recipient who is an individual Haj pilgrim, his location will be in India. He pointed out that the decisions of CESTAT relied upon by the petitioners, are for the period prior to 1st July 2012, when earlier service tax regime was in existence. He submitted that as service rendered to Haj pilgrims is not a part of the negative list under Section 66-B of the Finance Act, 1994, it is taxable from 1st July 2012. 26. For the period from 1st July 2017 onwards, he relied upon Section 12(2) of the IGST, which defines 'the place of supply of services' and Section 12(9), which define....
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.... no exemption granted to services rendered by HGOs of arranging travel, accommodation and other facilities to enable Haj pilgrims to undertake the Haj pilgrimage. The exemption is to the services rendered only by specified organisations for facilitating religious pilgrimage. 29. While dealing with the argument of violation of Article 14 of the Constitution of India, he submitted that the classification of pilgrims undertaking Haj pilgrimage through the Haj Committee under the bilateral arrangement and those undertaking tours through PTOs is based on an intelligible differentia having rational nexus to the object sought to be achieved by the Statute. He pointed out that service tax exemption granted to the services provided by the specified organisations in respect of religious pilgrimage facilitated by the Government of India under the bilateral arrangement is not discriminatory. He submitted that Haj Committee constitutes a class by itself, which cannot be treated on the same footing as HGOs/PTOs, though services rendered by all of them may be similar. He pointed out that Haj Committee was constituted under Section 3 of the Act of 2002 and State Haj Committees were constituted ....
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.... REJOINDER BY THE PETITIONERS 32. In rejoinder, Shri Arvind P. Datar, Senior Advocate submitted that in the present case, Rule 8 will have no application at all. The learned senior counsel submitted that the test of purposive interpretation laid down by this Court in the case of Government of Kerala & Anr. v. Mother Superior Adoration Convent^2 will have to be applied. While interpreting the exemption provision, he submitted that the decisions relied upon by the Revenue in the case of M. Jhangir Bhatusha & Ors.^13, will not apply to the facts of the case. He pointed out that this was a case where this Court upheld different treatment given to the State Trading Corporation and private importers. He submitted that the differential exemptions were granted after the Government was satisfied that it was necessary in the public interest to pass a special exemption order considering the exceptional circumstances set out therein. CONSIDERATION OF SUBMISSIONS 33. The service tax was introduced by way of the Finance Act. The Finance Act incorporated various services which were made subject to payment of service tax. The services were enumerated in clause 105 of Section 65 of the ....
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....rovided or agreed to be provided or deemed to have been agreed to be provided. By exercising the power under Section 66C of the Finance Act, the 2012 Rules were enacted and were brought into force with effect from 1st July 2012. 36. In these petitions, we are concerned with HGOs or PTOs. It is, therefore, necessary to understand the nature of services provided by HGOs/ PTOs. Haj pilgrimage is a five-day religious pilgrimage to Mecca and nearby Holy places in Saudi Arabia. As per the Holy Quran, all Muslims who are physically and financially sound must perform the Haj pilgrimage at least once in their lives. As provided in Holy Quran, the Haj pilgrimage is one of the five pillars or duties of Islam. Haj takes place only once a year in the twelfth and final month of Islamic lunar calendar. Pilgrimage undertaken to Mecca at other times is known as Umrah. During the five days of Haj, the pilgrims are required to perform a series of rituals, the details of which are not relevant for deciding the issues involved in these petitions. 37. To enable Haj pilgrims of India to undertake Haj pilgrimage, there is a bilateral agreement executed every year between the Kingdom of Saudi Arabia ....
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....d, the establishment most directly concerned with the provision of the service; and (iv) in the absence of such places, the usual place of residence of the service provider. (i) "location of the service receiver" means:- (a). where the recipient of service has obtained a single registration, whether centralized or otherwise, the premises for which such registration has been obtained; (b). where the recipient of service is not covered under sub-clause (a): (i) the location of his business establishment; or (ii) where services are used at a place other than the business establishment, that is to say, a fixed establishment elsewhere, the location of such establishment; or (iii) where services are used at more than one establishment, whether business or fixed, the establishment most directly concerned with the use of the service; and (iv) in the absence of such places, the usual place of residence of the recipient of service. Explanation:- For the purposes of clauses (h) and (i), "usual place of residence" in case of a body corporate means the place where it is incorporated or otherwise legally co....
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....service as well as that of the recipient of service is in the taxable territory, shall be the location of the recipient of service. 9. Place of provision of specified services.-The place of provision of following services shall be the location of the service provider:- (a) Services provided by a banking company, or a financial institution, or a non-banking financial company, to account holders; (b)[x x x] (c) Intermediary services; (d) Service consisting of hiring of all means of transport other than, - (i) aircrafts, and (ii) vessels except yachts upto a period of one month." (emphasis added) We may note here the relevant provisions of IGST Act. Sub-Sections (14) and (15) of Section 2 are as under: "(14) location of the recipient of services means,-- (a) where a supply is received at a place of business for which the registration has been obtained, the location of such place of business; (b) where a supply is received at a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establish....
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....modation in any immovable property for organising any marriage or reception or matters related thereto, official, social, cultural, religious or business function including services provided in relation to such function at such property; or (d) any services ancillary to the services referred to in clauses (a), (b) and (c), shall be the location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located: Provided that if the location of the immovable property or boat or vessel is located or intended to be located outside India, the place of supply shall be the location of the recipient. Explanation.--Where the immovable property or boat or vessel is located in more than one State or Union territory, the supply of services shall be treated as made in each of the respective States or Union territories, in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed. (4) The place of supply of restaurant and catering services, personal g....
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....s to a place outside India, the place of supply shall be the place of destination of such goods.] (9) The place of supply of passenger transportation service to,- (a) a registered person, shall be the location of such person; (b) a person other than a registered person, shall be the place where the passenger embarks on the conveyance for a continuous journey: Provided that where the right to passage is given for future use and the point of embarkation is not known at the time of issue of right to passage, the place of supply of such service shall be determined in accordance with the provisions of sub-section (2). Explanation.--For the purposes of this sub-section, the return journey shall be treated as a separate journey, even if the right to passage for onward and return journey is issued at the same time. (10) The place of supply of services on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, shall be the location of the first scheduled point of departure of that conveyance for the journey. (11) The place of supply of telecommunication services including data transfer, broadcasting, cab....
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....ly of banking and other financial services, including stock broking services to any person shall be the location of the recipient of services on the records of the supplier of services: Provided that if the location of recipient of services is not on the records of the supplier, the place of supply shall be the location of the supplier of services. (13) The place of supply of insurance services shall,-- (a) to a registered person, be the location of such person; (b) to a person other than a registered person, be the location of the recipient of services on the records of the supplier of services. (14) The place of supply of advertisement services to the Central Government, a State Government, a statutory body or a local authority meant for the States or Union territories identified in the contract or agreement shall be taken as being in each of such States or Union territories and the value of such supplies specific to each State or Union territory shall be in proportion to the amount attributable to services provided by way of dissemination in the respective States or Union territories as may be determined in terms of the contract or ag....
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.... architects or interior decorators, shall be the place where the immovable property is located or intended to be located. (5) The place of supply of services supplied by way of admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place where the event is actually held. (6) Where any services referred to in sub-section (3) or sub-section (4) or sub-section (5) is supplied at more than one location, including a location in the taxable territory, its place of supply shall be the location in the taxable territory. (7) Where the services referred to in sub-section (3) or sub-section (4) or sub-section (5) are supplied in more than one State or Union territory, the place of supply of such services shall be taken as being in each of the respective States or Union territories and the value of such supplies specific to each State or Union territory shall be in proportion to the value for services separately collected or determined in terms of the contract or agreement....
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....hall be the location of the recipient of services. Explanation.--For the purposes of this sub-section, person receiving such services shall be deemed to be located in the taxable territory, if any two of the following noncontradictory conditions are satisfied, namely:-- (a) the location of address presented by the recipient of services through internet is in the taxable territory; (b) the credit card or debit card or store value card or charge card or smart card or any other card by which the recipient of services settles payment has been issued in the taxable territory; (c) the billing address of the recipient of services is in the taxable territory; (d) the internet protocol address of the device used by the recipient of services is in the taxable territory; (e) the bank of the recipient of services in which the account used for payment is maintained is in the taxable territory; (f) the country code of the subscriber identity module card used by the recipient of services is of taxable territory; (g) the location of the fixed land line through which the service is received by the recipient is in the taxable te....
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....provision of service is the location of the recipient of service. Hence, in this case, the place of provision of service is the location of the service receiver in accordance with clause (i) of Rule 2 which will be in taxable territory. 40. However, reliance was sought to be placed by the petitioners on Rule 4, in particular Clause (b) thereof. Rule 4 is applicable to performance based service which provides that the place of provision of two services set out in the said Rule shall be the location where services are actually performed. Clause (a) of Rule 4 is applicable to services provided in respect of goods which obviously will not apply in the present case. The petitioners are relying upon clause (b) of Rule 4. The title of Rule 4 suggests that it is applicable to performance based services. HGOs do not render performance based services looking to the nature of the services they render, which we have discussed above in detail. Therefore, Clause (b) of Rule 4 will not apply to HGOs. What will apply is Rule 3 which will mean that the place of provision of the service shall be the location of the recipient of service in accordance with Rule 2(i)(b)(iv). Thus, service is rendere....
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....gime was not in force. We are concerned in these cases with the negative service tax regime which commenced from 1st July 2012. Therefore, the same will not apply to these cases. APPLICABILITY OF EXEMPTION NOTIFICATION 46. The question is whether the exemption granted under the Mega Exemption Notification will apply in this case. As mentioned earlier, the Exemption Notifications under the IGST and the GST Acts so far as the Haj pilgrimage is concerned, are pari materia with the Mega Exemption Notification. It is, therefore, necessary to advert to the Mega Exemption Notification. The Mega Exemption Notification contains a list of services which are exempted from service tax leviable under Section 66B. In this case, Clauses 5 and 5A are pressed into service by the petitioners which read thus: "5. Services by a person by way of- (a) renting of precincts of a religious place meant for general public, owned or managed by an entity registered as a charitable or religious trust under section 12AA of the Income-tax Act, 1961(hereinafter referred to as the Income-tax Act), or a trust or an institution registered under sub clause (v) of clause (23C) of section 10 of t....
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....of Customs, (1997) 6 SCC 564] is not correct and all the decisions which took similar view as in Sun Export case [Sun Export Corpn. v. Collector of Customs, (1997) 6 SCC 564] stand overruled." (emphasis added) 49. But Shri Datar urged that when the exemption is for beneficial purposes, a different rule will apply. In the case of Government of Kerala & Anr. v. Mother Superior Adoration Convent^2 relied upon by Shri Datar, this Court referred to its decision in the case of Commissioner of Customs (Preventive) Mumbai v. M. Ambalal and Company 2011 (2) SCC 74 and held that the law laid down in the case of M. Ambalal and Company 2011 (2) SCC 74 has not been disturbed by the Constitution Bench in the case of Dilip Kumar and Company^20. In paragraph 23, this Court in the case of Mother Superior Adoration Convent^2 held thus: "23. Likewise, even under the Customs Act, this Court in Commr. of Customs v. M. Ambalal & Co. [Commr. of Customs v. M. Ambalal & Co., (2011) 2 SCC 74] made a clear distinction between exemptions which are to be strictly interpreted as opposed to beneficial exemptions having as their purpose-encouragement or promotion of certain activities. This case felic....
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....tion 3(1)(b) must be given full effect to, the line of authority being applicable to the facts of these cases being the line of authority which deals with beneficial exemptions as opposed to exemptions generally in tax statutes. This being the case, a literal formalistic interpretation of the statute at hand is to be eschewed. We must first ask ourselves what is the object sought to be achieved by the provision, and construe the statute in accord with such object. And on the assumption that if any ambiguity arises in such construction, such ambiguity must be in favour of that which is exempted. Consequently, for the reasons given by us, we agree with the conclusions reached by the impugned judgments [Mother Superior v. State of Kerala, 2007 SCC OnLine Ker 578] , [Unity Hospital (P) Ltd. v. State of Kerala, 2010 SCC OnLine Ker 4679] of the Division Bench and the Full Bench." (emphasis added) 50. The submission of the petitioners is that clause (5) of the Mega Exemption Notification contains a beneficial exemption and therefore, the same will have to be construed in accordance with the object sought to be achieved. The submission is that as there is an ambiguity in the constructio....
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....renders service by way of conducting a religious ceremony. The service rendered by HGOs to Haj pilgrims is to facilitate them to reach at the destination to perform rituals/religious ceremonies. No religious ceremony is performed or conducted by the HGOs. The religious ceremony is conducted by Haj pilgrims or by someone else in the Kingdom of Saudi Arabia. According to us, there is absolutely no ambiguity in sub-clause (b) of clause 5 and therefore, there is no occasion to apply the test laid down by this Court in the case of Mother Superior Adoration Convent^2. 53. The submission of Shri Datar, learned senior counsel was that in Haj pilgrimage there are six entities involved which include concerned Ministry of the Kingdom of Saudi Arabia, the Government of India, Tawafa establishments, Molliums, approved HGOs and Haj pilgrims. His submission is that the word 'person' used in sub-clause (b) of clause 5 of the exemption notification will also include the plural of the term 'person'. The submission is that a Haj pilgrim will fall in the category of 'person'. According to us, this submission is completely fallacious. The word 'person' used in Clause 5 refers to a service provider a....
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....t the exemption under sub-clause (b) of clause 5 is to the service provider. We are noting this as one of the petitions has been filed by a service recipient. 55. Before we go to the argument regarding discrimination, we may note here that with effect from 1st July 2017, service tax became payable under the IGST Act. Even GST Act came into force from the same date. Under both the enactments, tax is payable on the supply of goods or services. Sub-Section (2) of Section 13 of IGST Act provides that the place of supply of services except services specified in Sub-Sections (3) to (13) shall be the location of the recipient of services. Under sub-Section (1) of Section 5 of the IGST Act, service tax is payable on services supplied inter-state. Under sub-Section (1) of Section 9 of the GST Act, service tax is leviable on services supplied intra-state. None of the sub-sections (3) to (13) of Section 13 of the IGST Act is applicable in this case. Clause (14) of Section 2 of the IGST Act defines the location of the recipient of service. This provision is pari materia with the same definition under the 2012 Rules. As in case of 2012 Rules, there are four categories. The service received f....
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....he classification made by treating the Haj Committee as a separate class, cannot be questioned. In a given case, different classes of service providers may be rendering the same service to the same class of service recipients. That, per se, does not amount to discrimination. The attack on the ground of discrimination will have to be considered in the context of taxable persons namely, the Haj Committee and HGOs. Under Section 3 of the said Act of 2002, the Haj Committee of India was constituted. Similarly, under Section 17, the State Haj Committees were constituted. Both the categories of Haj Committees are body corporate, having perpetual succession and a common seal with the power to acquire, hold and dispose of movable and immovable properties. Section 4 determines the composition of the Haj Committee of India and Section 18 determines the composition of State Haj Committees. Section 9 lays down the duties of the Haj Committee, which reads thus: "9.Duties of Committee-(1) The duties of the Committee shall be- (i) to collect and disseminate information useful to pilgrims, and to arrange orientation and training programmes for pilgrims; (ii) to advise an....
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....enerally look after the welfare of the pilgrims. The Haj Committee has an important duty to assist the pilgrims in distress. One of the duties is to finalize the Annual Haj Plan with the approval of the Central Government and to execute the same. The Haj Committee is under an obligation to publish proceedings of the Committee. Under Section 30, it is the duty of the Committee to create Central Haj Fund. Similarly, under Section 32, the State Committees are under an obligation to create State Haj Funds. The Central Government has the power to reconstitute the Haj Committee and to remove the Chairperson, the Vice-Chairperson and the Members of the Committee. There is a similar power vesting in the State Government in respect of the State Committees. Thus, the Haj Committees are statutory bodies working under the control and supervision of the Government. The Haj Committees are the agencies and instrumentalities of the State. Apart from arranging visits of Haj pilgrims for the purposes of Haj pilgrimage, there are important statutory duties assigned to the Haj Committee which we have set out above. As per clause (b) of Section 30, money collected from pilgrims for the performance of t....
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....he exercise cannot be lost sight of. The object of registering PTOs is not to distribute the Haj seats to them for making business profits but to ensure that the pilgrim may be able to perform his religious duty without undergoing any difficulty, harassment or suffering. A reasonable profit to the PTO is only incidental to the main object." (emphasis added) However, the learned counsel has not referred to paragraph 10 of the same judgment, which takes a note of very substantial profits earned by the PTOs. Paragraph 10 reads thus: "10. From these facts, it is not difficult to deduce that the dispute between the private operators/travel agents and the Government of India in regard to registration as PTOs arises from a conflict of object and purpose. For most of the private operators/travel agents registration as PTOs is mainly a question of more profitable business. Under the bilateral agreement no PTO can be given a quota of less than fifty pilgrims. Normally, a quota of fifty pilgrims would mean, on an average and by conservative standards, a profit of rupees thirty-five to fifty lakhs. This in turn means that any private operator/travel agent, successful in getting reg....
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....h the object of making profit. Therefore, there is a nexus between the classification made and the object sought to be achieved by granting exemptions. 61. The learned senior counsel relied upon the decision of this Court in the case of S. K. Dutta^6. Certain provisions of the Income Tax Act, 1961 granting exemption to the members of the Scheduled Tribes were the subject matter of challenge before the High Court. While granting exemption to the members of the Scheduled Tribes, the class of the government servants who were the members of Scheduled Tribes was excluded from the benefits. It is in this context that the Apex Court observed that the classification made on the basis of imaginary distinction cannot be a valid classification. There has to be a reasonable and substantial distinction for the purposes of making a valid classification. On facts, the said decision will not help the petitioners. 62. In the meeting of the Fitment Committee, there were deliberations on the representation made by the petitioners. The decision/recommendation of the Fitment Committee contains valid reasons for making a distinction between HGOs and Haj Committees. We are reproducing the reasons r....
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...., that is to say, it must not only be based on some qualities or characteristics which are to be found in all the person grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation. In order to pass the test, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia, which distinguishes those that are grouped together from others, and (2) that differentia must have a rational relation to the object sought to be achieved by the Act." The classification of pilgrims undertaking Haj/Umrah pilgrimage tours through Haj Committee of India under bilateral arrangement and those undertaking tours through private tour operators is based on an intelligible differentia having a rational relation to the object sought to be achieved by the statute in question. Therefore, services Tax/GST exemption on services provided by a specified organization in respect of a religious pilgrimage facilitated by Government of India under bilateral arrangement are not discriminatory and not violative of Article 14 of the Constitution. As discu....
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....herefore encouragement had to be given to the imports effected by the State Trading Corporation by reducing the rate of customs duty levied on them. This involved a long term perspective, since the exclusive monopoly to import these edible oils was now entrusted to the State Trading Corporation. What appears to have dominated the policy of the government in issuing the exemption notifications was the consideration that the domestic prices of vanaspati should be maintained at reasonable levels. It cannot be doubted that the entire edible oil market is an integrated one, and that it is not reasonable to treat any one of the edible oils or vanaspati in isolation. It is a well accepted fact that vanaspati manufacturers constitute a powerful organised sector in the edible oil market, and a high vanaspati price would encourage an unauthorised diversion of the edible oils to vanaspati manufacturing units, resulting in a scarcity in the edible oil market, giving rise to erratic prices and depriving consumers of access to edible oils. The need for preventing vanaspati prices ruling high was also to prevent people normally using vanaspati from switching over to other edible oils, thus leadin....
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....he case of R. K. Garg v. Union of India & Ors. 1981 (4) SCC 675 on the approach of the Court in such matters. We quote paragraph 8: "8. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J., that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation than in other areas where fundamental human rights are involved. Nowhere has this admonition been more felicitously expressed than in Morey v. Doud [351 US 457 : 1 L Ed 2d 1485 (1957)] where Frankfurter, J., said in his inimitable style: "In the utilities, tax and economi....