AI Drafter 
TaxTMI 
TaxTMI 
2022 (11) TMI 1147
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....op / flat was Shop No. 3 in 'A' wing and Flat no. 301 to 306 in 'A' wing & Flat no. 301 & 302 in 'B' in Residential Building named as Bhaveshwar building No. 3 situated at FP No. 25, CTS No. 5953, Bhaveshwar Lane, Ghatkopar East, Mumbai - 400 077 from M/s. Yog Reality. They paid the consideration along with service tax of Rs.30,85,155/- to the service provider at the time of purchase of above mentioned shop / flats. The refund claim was supported by various documents as follows: 1. Letter dated 05.10.2018 of M/s. Yog Reality stating that they have not claimed any refund of Service Tax of the same amount of the same period. 2. Form- R application for Refund of Service Tax in respect of M/s. Prajapita Brahma Kumaris Ishwariya Vishwa Vidyalaya 3. Copy of Service Tax Return Oct 16 to March 17 & April 17 to June 17 pertaining to Developer/Service i.e. of M/s. Yog Reality (STC NO. AABFY1597MSD001) 4. Copy of Sale agreement 5. Bank statement pertaining to M/s. Yog Reality for the period from 07.12.2016 to 27.06.2017. 2.3 Appellant claimed that as per the entry 13 (c) of the Notification No 25/2012-ST they were exempt ....
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....rieved appellant filed the appeal before Commissioner (Appeals) who while setting aside the order on limitation upheld the rejection of refund claim on merits. 2.7 Aggrieved appellant have filed this appeal. 2.8 Revenue has filed no appeal against the impugned order. 3.1 We have heard Shri Mahesh Raichandani, Advocate for the appellant and Shri Nitin M. Tagade, Joint Commissioner, Authorized Representative for the revenue. 3.2 Arguing for the appellant learned counsel submits: • The only issue involved in the present appeal is in respect of interpretation of the word "building", used in entry at Sl No 13 (c) of the Mega Exemption Notification. • Appellant is registered under Section 12AA of the Income Tax Act, 1961. They had purchased certain flats and shops in the project being developed by the Yog Reality. At the time of purchase they had paid the service tax due on the transaction undertaken • Later on they discovered that they were exempt from payment of this tax and claimed refund of the amount paid by them as service tax. • By the impugned order, the only objection that Commissioner (Appeal) has to their refund c....
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....mpugned order submits that: • Distinguished the decisions relied upon by the appellant. • Relied upon the decision of the Hon'ble Apex Court in case of Dilip Kumar and Co, and stated that the terms used in the notification should be construed strictly. • There was no protest filed by the appellant in the manner as prescribed and hence the refund claim is time barred. • The refund claim in the present case cannot be allowed without modification of the assessment order as has been held by the Hon'ble Apex Court in the case of ITC Ltd. [2019-TIOL-418-SC-Cus-LB] and by this tribunal in case of Karanja Terminal and Logistics Pvt Ltd. [2021-TIOL-76- CESTAT-Mum] • Issue of unjust refund needs to be examined. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 For rejecting the refund claim filed by the appellant original authority has vide his order in original observed as follows: "1. have carefully gone through the aforesaid Refund Claim and relevant documents on records, filed by the claimant alongwith written submission dated 03.01.201....
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...., 1944, the relevant date for filing refund claim is one year from the date of payment of duty. M/s. Yog Reality vide letter dated 05.10.2018 informed that they have deposited Service tax collected from the claimant, to the Government Exchequer, an declared in the Service Tax returns for the year 2016-2017 & 2017-2018 ( April to June 2017). It is seen that the return for the period April to June 2017 was filed on 11.07.2017. In the instant case claim for refund has been made on 05/10/2018 and therefore is time barred under the provisions of Section 11B of the Central Excise Act, 1944 and as such the refund claim is liable for rejection on the ground of limitation." 4.2 For upholding the order in original on merits Commissioner (Appeals) has in the impugned order observed as follows: "6. I have carefully gone through the facts of the case, records placed in the file and submission made during the course of personal hearing. Considering the issue involved, the short questions to be decided in the instant case is whether the adjudicating authority rightly rejected the refund claim filed by the Appellant in respect of Service Tax paid on the purchase of shops/flats from M/s....
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....apter, unless the context otherwise requires, (44) "service" means any activity carried out by a person for another for consideration, and includes a declared service, but excludes ...." The term "service" has been defined as any activity carried on for a consideration by one person for another. As the term "activity" and "consideration" have not been defined in the Finance Act, 1994. Hence, the same would assume wider encompass and application. Section 66D enumerates the list of services which are out of the purview of Service Tax. For the sake of brevity, I will reproduce entry No.13 (c) of Notification 25/2012-ST which is as follows: Notification 25/2012-ST dated 20.06.2012 as amended exempts certain specified taxable services from the whole of Service Tax leviable under section 66B of the Finance Act, 1994. As per Sr. No. 13 (c) of the above notification, following services are exempt from the whole of Service Tax leviable under section 66B of the Finance Act, 1994: 13. Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, ....
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....e of human habitation or otherwise and whether of masonry, bricks, wood, mud, thatch, metal or any other material whatever and includes a wall and a well." While dealing with the definition of building' in the context of row of quarters in one block as to whether the entire row of bungalow/quarter is one building for assessing the rental value of property tax, the Supreme Court held that simply because some quarters or some bungalows have common wall would not mean that such quarter or bungalow ceases to be a house. A house is a place of dwelling or habitation and each quarter or bungalow is allotted to a separate employee who lives therein with his family. Hon'ble Supreme Court did not accept the proposition that quarters in one row having common wall though each separating each other would mean one 'building' for the purpose of arriving at an annual value. If the house is built by the side of the other house in one row having common wall then they could be treated as a separate 'building' for the purposes of property tax. 7.5 It is the contention of the Appellant that from the reading of entry 13(c) it is crystal clear that the intention of the Go....
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....tion. This is especially so in fiscal statutes and penal statutes. Nevertheless, if the plain language results in absurdity, the Court is entitled to determine the meaning of the word in the context in which it is used keeping in view the legislative purpose [Assistant Commissioner, Gadag Sub-Division, Gadag v. Mathapathi Basavannewwa, 1995 (6) SCC 355]. Not only that, if the plain construction leads to anomaly and absurdity, the Court having regard to the hardship and consequences that flow from such a provision can even explain the true intention of the legislation. Having observed general principles applicable to statutory interpretation, it is now time to consider rules of interpretation with respect to taxation. It also held that no regard should be made to intendment while making Interpretation of taxing statute and matter should be governed wholly by the language of the notification, equity or intendment have no place in interpretation of a tax statute: 22. We are not suggesting that literal rule de hors the strict interpretation nor one should ignore to ascertain the interplay between 'strict interpretation and literal interpretation. We may reiterate ....
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....Mumbai v. Dilip Kumar & Co. (2018) 9 SCC 1 = 2018 (361) E.L.T. 577 (S.C.)]; Commissioner of Central Excise v. Hari Chand Shri Gopal & Others (2011) 1 SCC 236 = 2010 (260) E.L.T. 3 (S.C.); Commissioner of Central Excise v. Mahaan Dairies (2004) 11 SCC 798 = 2004 (166) E.L.T. 23 (S.C.)]. The Supreme Court in Saraswati Sugar Mills (2011 (270) E.L.T. 465 (S.C.)], has affirmed this principle, assailing in paragraph 7, as follows: "7. ... A party claiming exemption has to prove that he/it is eligible for exemption contained in the notification. An exemption notification has to be strictly construed. The conditions for taking benefit under the notification are also to be strictly interpreted. When the wordings of notification is clear, then the plain language of the notification must be given effect to. By way of an interpretation or construction, the Court cannot add or substitute any word while construing the notification either to grant or deny exemption. The Courts are also not expected to stretch the words of notification or add or subtract words in order to grant or deny the benefit of exemption notification. In Bombay Chemicals (P) Ltd. v. CCE - (1995) Supp (2) SC....
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....le Supreme Court in the case of Dilip Kumar and Co., wherein on the issue of strict interpretation, literal interpretation and interpretation of the exemption notification, Hon'ble Apex Court has observed as follows: "22. At the outset, we must clarify the position of 'plain meaning rule or clear and unambiguous rule' with respect of tax law. 'The plain meaning rule' suggests that when the language in the statute is plain and unambiguous, the Court has to read and understand the plain language as such, and there is no scope for any interpretation. This salutary maxim flows from the phrase "cum inverbis nulla ambiguitas est, non debet admitti voluntatis quaestio". Following such maxim, the Courts sometimes have made strict interpretation subordinate to the plain meaning rule [Mangalore Chemicals case (Infra para 37).], though strict interpretation is used in the precise sense. To say that strict interpretation involves plain reading of the statute and to say that one has to utilize strict interpretation in the event of ambiguity is self-contradictory. 23. Next, we may consider the meaning and scope of 'strict interpretation', as evolved in Indian law and how the hi....
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....n the area of taxation. The decision of this Court in Punjab Land Development and Reclamation Corporation Ltd., Chandigarh v. Presiding Officer, Labour Court Chandigarh and Ors., (1990) 3 SCC 682, made the said distinction, and explained the literal rule- "The literal rules of construction require the wording of the Act to be construed according to its literal and grammatical meaning whatever the result may be. Unless otherwise provided, the same word must normally be construed throughout the Act in the same sense, and in the case of old statutes regard must be had to its contemporary meaning if there has been no change with the passage of time." That strict interpretation does not encompass strict - literalism into its fold. It may be relevant to note that simply juxtaposing 'strict interpretation' with literal rule' would result in ignoring an important aspect that is 'apparent legislative intent'. We are alive to the fact that there may be overlapping in some cases between the aforesaid two rules. With certainty, we can observe that, 'strict interpretation' does not encompass such literalism, which lead to absurdity and go against the legislative intent. As not....
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....over the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of law the case might otherwise appear to be. In other words, if there be admissible in any statute, what is called an equitable construction, certainly, such a construction is not admissible in a taxing statute where you can simply adhere to the words of the statute. VISCOUNT SIMON quoted with approval a passage from ROWLATT, J. expressing the principle in the following words : "In a taxing Act one has to look merely at what is clearly said. This is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." It was further observed : "In all tax matters one has to interpret the taxation statute strictly. Simply because one class of legal entities is given a benefit which is specifically stated in the Act, does not mean that the benefit can be extended to legal entities not referred to in the Act as there is no equity in matters of taxation...." Yet again, it was observed : "It may thus be....
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....eliance upon equity does not avail an assessee, so it does not avail the Revenue." The passages extracted above, were quoted with approval by this Court in at least two decisions being Commissioner of Income Tax v. Kasturi Sons Ltd., (1999) 3 SCC 346 and State of West Bengal v. Kesoram Industries Limited, (2004) 10 SCC 201 [hereinafter referred as 'Kesoram Industries case' for brevity]. In the later decision, a Bench of seven-Judges, after citing the above passage from Justice G.P. Singh's treatise, summed up the following principles applicable to the interpretation of a taxing statute : "(i) In interpreting a taxing statute, equitable considerations are entirely out of place. A taxing statute cannot be interpreted on any presumption or assumption. A taxing statute has to be interpreted in the light of what is clearly expressed : it cannot imply anything which is not expressed : it cannot import provisions in the statute so as to supply any deficiency : (ii) Before taxing any person, it must be shown that he falls within the ambit of the charging section by clear words used in the section; and (iii) If the words are ambiguous and open to two interpretations, the b....
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....id that a word, apart from having a natural, ordinary or popular meaning (including other synonyms i.e. literal, grammatical and primary), may have a secondary meaning which is less common e.g. technical or scientific meaning. But once it is accepted that natural, ordinary or popular meaning of the word is derived from its context, the distinction drawn between different meanings loses much of its relevance." Similarly, Craies on Statute Law states : "One of the basic principles of interpretation of Statutes is to construe them according to plain, literal and grammatical meaning of the words. If that is contrary to, or inconsistent with, any express intention or declared purpose of the Statute, or if it would involve any absurdity, repugnancy or inconsistency, the grammatical sense must then be modified, extended or abridged, so far as to avoid such an inconvenience, but no further. The onus of showing that the words do not mean what they say lies heavily on the party who alleges it. He must advance something which clearly shows that the grammatical construction would be repugnant to the intention of the Act or lead to some manifest absurdity." The words ....
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....n from payment of purchase tax was to the specific class of industries and, more particularly, as per the list of 'eligible industries'. Exemption was not available to the industries listed in the 'ineligible' industries. It was never the intension of the State Government while framing the incentive policy to grant the benefit of exemption to 'ineligible industries' like the power producing industries like the EPL, which as such was put in the list of 'ineligible' industries. 14.6 Now, so far as the submission on behalf of the respondent that in the event of obscure in a provision in a fiscal statute, construction favourable to the assessee should be adopted is concerned, the said principle shall not be applicable to construction of an exemption notification, as it is clear and not ambiguous. Thus, it will be for the assessee to show that he comes within the purview of the notification. Eligibility clause, it is well settled, in relation to exemption notification must be given effect to as per the language and not to expand the scope deviating from the language. There is a vast difference and distinction between a charging provision in a fiscal statute and an exemption....
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....sion a flat in a building should be construed as separate unit. A flat is in building. Multi storey buildings are divided into flats or units. 4.7 In the case of Notified Area Committee Nangal Township [AIR 1999 SC 2569] Hon'ble Apex Court has held as follows: "We do not think that the Committee is right in its approach. If we may refer to the definition of the 'building', it means any house used for the purpose of human habilitation. The term 'house' in the present case would mean a dwelling house intended for human habilitation. It is not disputed that each quarter or bungalow is allotted to a separate employee who lives therein with his family. Simply because some quarters or some bungalows have common wall separating each other would not mean that that quarter or bungalow ceases to be a house. A house is a place of dwelling or habilitation. It is difficult to accept the proposition that quarters in one row having common wall though each separating the other would mean one building for the purpose of arriving at the annual value. We do not think that any argument is needed for us to hold that each such quarter or bungalow for the residence of employee....
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.... or art of constructing. (3) The act or process of erecting or establishing. 11. Building has been defined in Stroud's Judicial Dictionary, fourth Edition at 334. What is a 'building' must always be a question of degree and circumstances; its "ordinary and usual meaning is, a block of brick or stone work, covered in by a roof". The ordinary and natural meaning of the word 'building' includes the fabric and the ground on which it stands. 12. In the Oxford English Dictionary the word 'building' has been defined to mean, "that which is built, structure, edifice, structure of the nature of a house built where it is to stand". In D.C. Gouse & Co. etc. v. State of Kerala and Anr. etc. . In the context of Entry 49, List Ii of VII schedule to the Constitution (Taxes on lands and buildings) under the Kerala Buildings Act, 1975, this Court held that the word 'building' means "that which is built; a structure edifice". The natural or ordinary meaning of a building is, "a fabric of which it is composed, the ground upon which its walls stand and the ground embraced within those walls". Under the inclusive definition of that Act it was held t....