SERVICE TAX TERMINOLOGY – PART-I

[Dr. Sanjiv Agarwal]

Finance Act, 2012 has inserted a new section 65B which contains fifty five clauses comprising of definitions and interpretation in relation to law of service tax. For the first time in the history of Service Tax inIndia, the term ‘service’ has been defined. Certain other terms have been borrowed from other legislations, while few others were defined in earlier section 65 of the Finance Act, 1994.

Notification No. 12/2012-ST dated 17.03.2012 which exempts 34 services from levy of Service Tax also contains 30 definitions in relation to exempted services.

Definitions are meant to define a term or expression. In judicial parlance, a definition could be a statutory definition, inclusive definition, exhaustive definition, scientific or artificial definition or even market parlance definition. While inclusive definition provides a general description of what is covered in the definition followed by specific inclusion of certain items which may or may not fall within the general scope of definition, exhaustive definition implies that nothing has been left and all that is intended to be covered has been included.

This article explains the legal and / or literal meanings of various terms and phrases defined as well as those not defined in the statute.

Terms and Expressions Defined in Finance Act, 1994 (Section 65b)

Section 65B, as inserted by the Finance Act, 2012 contains the definitions and meaning of the following words, terms, expressions and phrases [clauses 1 to 55]-

Actionable claim, advertisement, agriculture, agricultural extension, agricultural produce, Agricultural  Produce Marketing Committee or Board, aircraft, airport, amusement facility, Appellate Tribunal, approved vocational education course, assessee, associated enterprise, authorised dealer of foreign exchange, betting or gambling, Board, business entity, Central Electricity Authority, Central Transmission Utility, courier agency, customs station, declared service, electricity transmission or distribution utility, entertainment event, goods, goods transport agency, India, information technology software, inland waterway, interest, local authority, metered cab, money, negative list, non-taxable territory, notification, person, port, prescribed, process amounting to manufacture or production of goods, renting, Reserve Bank of India, securities, service, Special Economic Zone, stage carriage, State Electricity Board, State Transmission Utility, support services, tax, taxable service, taxable territory, vessel and works contract.

Actionable Claim (Clause 1)

Actionable claim shall have meaning assigned to it in section 3 of the Transfer of Property Act, 1882. Accordingly, actionable claim means a claim to any debt, other than a debt secured by mortgage of immoveable property or by hypothecation or pledge of moveable property, or to any beneficial interest in moveable property not in the possession, either actual or constructive, of the claimant, which the Civil Courts recognize as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent.

The ‘actionable claim’ as defined in S. 3 of the Transfer of Property Act, 1882 comprises two types of claims : (a) a claim to unsecured debts and (b) a claim to beneficial interest in movable property. If the beneficial interest in movable property is not in  possession of the claimant it will be an actionable claim but if it is in his possession or enjoyment, it will not be actionable claim but a chose in possession. H. Anraj v. Govt. of T.N., AIR 1986 SC 63, 71. [T.P. Act (4 of 1882)Ss. 3 and 30].

According to Oxford Dictionary, following meanings can be attributed -

Actionable:

1. Law giving sufficient reason to take legal action an actionable assertion
2. able to be done or acted on having practical value

Claims:  

1. state or assert that something is the case, typically without providing evidence or proof:
2. formally request or demand; say that one owns or has earned (something):
3. cause the loss of (someone’s life):

According to Wikipedia, in the law, a cause of action is a set of facts sufficient to justify a right to sue to obtain money, property, or the enforcement of a right against another party. The term also refers to the legal theory upon which a plaintiff brings suit (such as breach of contract, battery, or false imprisonment). The legal document which carries a claim is often called a Statement of Claim in English law, or a Complaint inU.S. federal practice and in manyU.S. states. It can be any communication notifying the party to whom it is addressed of an alleged fault which resulted in damages from which it originates, often expressed in amount of money the receiving party should pay/reimburse.

Illustrations of actionable claim are 

• unsecured debts
• right to participate in the draw to be held in a lottery.

(To be continued)

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