TMI Blog2022 (2) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... ential dwelling by way of use as residence'. The burden is of course on the petitioner to show that his case comes within the parameters of the exemption notification. The expression 'residential dwelling' has not been defined. It is pertinent to note that under the erstwhile service tax law, the expression 'residential dwelling' was defined in paragraph 4.13.1 of Taxation of Services: An Education Guide dated 20.06.2012 which was issued by Central Board of Indirect taxes and Customs - in the education guide issued by Central Board of Indirect Taxes and Customs which contains clarifications, it is provided that in normal trade parlance residential dwelling means any residential accommodation and is different from hotel, motel, inn, guest house etc. which is meant for temporary stay. The aforesaid clarification which is issued by the Board, in the absence of anything to the contrary in the Act, binds the Respondent. It evident that the expression 'residence' and 'dwelling' have more or less the connotation in common parlance and therefore, no different meaning can be assigned to the expression 'residential dwelling' and it cannot be hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of services mentioned therein which includes renting services which are provided with respect to residential dwelling for use as residence. 4. The petitioner with a view to seek clarification with regard to his eligibility to seek exemption on the rent received by him from the lessee by letting the property, filed an Advance Ruling application in prescribed form under Section 97 of the Act before the Authority for Advance Ruling, Karnataka (hereinafter referred to as 'AAR Karnataka'). The AAR Karnataka vide Advance Ruling dated 23.03.2020 inter alia held that services viz., renting of residential dwelling for use as a residence do not fall under Entry 13 of the Exemption Notification. It was further held that lessee itself is not using the accommodation. Thus, it was held that the petitioner has to charge Goods and Services Tax (hereinafter referred to as 'GST') while issuing invoice to the lessee provided it is registered under the Act. Accordingly, it was held that benefit of exemption notification is not available to the petitioner. 5. The petitioner thereupon filed an appeal under Section 100 of the Act before the Appellate Authority for Advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Authority for Advance Rulings, West Bengal in 'BORBHETA ESTATE (P) LTD., IN RE (2019) 106 TAXMANN.COM 386 (AAR - WEST BENGAL). SUBMISSIONS OF RESPONDENTS: 8. On the other hand, learned counsel for the respondents submitted that lessee runs a business of leasing out of premises. It is further submitted that the expression used in the exemption notification is 'the residential dwelling' which cannot be construed as 'residence'. It is submitted that the expression 'residential dwelling' means an abode or habitat which has an element of permanency. Attention of this Court has also been invited to trade licence issued by Bruhat Bengaluru Mahanagara Palike (hereinafter referred to as 'the BBMP' for short) to the lessee and it is pointed out that the trade name has been described as boarding and lodging to which public are admitted or repose or let with or without consumption any food or drink. Learned counsel for the revenue has also relied on the registration certificate of the lessee, to contend that lessee is registered as commercial establishment under the Karnataka Shops and Commercial Establishment Act, 1961. While referring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (4) (5) 13 Heading 9963 or Heading 9972 Services by way of renting of residential dwelling for use as residence Nil Nil LEGAL PRINCIPLES: 10. The issue with regard to interpretation of exemption notification is no longer res integra and the Constitution Bench of the Supreme Court in 'DILIP KUMAR AND COMPANY AND OTHERS while dealing with the reference pertaining to interpretation of an exemption notification, has answered the reference in the following terms: 66.1 Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. 66.2 When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject / assessee and it must be interpreted in favour of the revenue. 66.3 The ratio in sun Export case is not correct and all the decisions which took similar view as in sun Expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s any residential accommodation and is different from hotel, motel, inn, guest house etc. which is meant for temporary stay. The aforesaid clarification which is issued by the Board, in the absence of anything to the contrary in the Act, binds the Respondent. 13. It is noteworthy that the accommodation which is used for the purposes of the hostel of students and working women is classified in residential category in the Revised Master Plan 2015 of Bangalore City. The Supreme Court in KISHORE CHANDRA SINGH VS BABU GANESH PRASAD BHAGAT AIR 1954 SC 316 has held that expression residence only connotes that a person eats, drinks and sleeps at that place and it is not necessary that he should own it. The aforesaid decision was referred to by Bombay High Court in BANDU RAVJI NIKAM SUPRA. The hostel is used by the students for the purposes of residence. The students use the hostel for sleeping, eating and for the purpose of studies for a period ranging between 3 months to 12 months. In the hostels, the duration of stay is more as compared to hotel in guest house, club etc. 14. It is well settled that when the word is not defined in the Act itself, it is permissible to refer to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also worth mentioning that the notification does not require the lessee itself use the premises as residence. Therefore, the benefit of exemption notification cannot be denied to the petitioner on the ground that the lessee is not using the premises. Similarly, the finding recorded by AAAR Karnataka that the hostel accommodation is more akin to 'sociable accommodation' is unintelligible and is not relevant for the purposes of determining the eligibility of the petitioner to claim the benefit under the exemption notification. 16. So far as the submission that the petitioner is registered as commercial establishment under the Karnataka Shops and Commercial Establishment Act, 1961 or that a trade licence has been issued by BBMP, suffice it to say that it is wholly irrelevant for the purposes of determining the eligibility of the petitioner under the exemption notification. 17. In view of the preceding analysis, the order dated 31.08.2020 passed by the AAAR Karnataka is quashed and it is held that the service provided by the petitioner i.e., leasing out residential premises as hostel to students and working professionals is covered under Entry 13 of Notification No.9/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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