TMI Blog2022 (11) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 (43 of 1961), and the premises held by them are meant predominantly for religious use by general public. Thus the appellant are entity who are eligible to claim the benefit of this exemption. revenue also do not dispute this aspect. The only objection which has been raised is to the word building used in the notification whereas appellant are claiming exemption in respect of shop and flats purchased by them from the M/s Yog Reality. In the impugned order and during the course of arguments learned authorized representative has sought to distinguish the decisions of ASHA MURARKA AND ORS. VERSUS THE KOLKATA MUNICIPAL CORPORATION AND ORS. [ 2015 (4) TMI 1349 - CALCUTTA HIGH COURT] and in the case of NOTIFIED AREA COMMITTEE NANGAL TOWNSHIP VERSUS BHAKRA MANAGEMENT BOARD, CHANDIGARH AND ORS. [ 1999 (8) TMI 1016 - SUPREME COURT] from the facts of following case and have argued that as per this decision 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. Thus, the word building used in entry at Sl No 13 (c) of the Notification No 25/2012-ST is wide enough cover the shop and flats purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 001) 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 from payment of service tax and had paid the service tax wrongly at the time of purchase of the said shops/ flats, to the exchequer through service provider. Having become aware of the mistake, they have filed this refund claim. 2.4 After examination of the refund claim the jurisdictional officer issued deficiency memo to the appellant stating as follows: On going through the claim the following discrepancy has been noticed (i) It is observed that, you as a service receiver {client/customer) paid service tax along with consideration to the developer (service provider for service provided/agreeing to be provided towards purchase of shop/flat in the project developed/constructed by developer(service provider) and claimed for refund for the said service tax amount paid to the developer (service provider) not to the Service Tax Department. It appears that you are not assessee in terms of Section 65(7) of erstwhile finance act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 claim is that they have received the specified services from service provider, Yog Reality in respect of the flat and shops and not in respect of the building hence the benefit of this exemption cannot be allowed to them. In the impugned order Commissioner (Appeal) has categorically held that the refund claim made by them will not be hit by the limitation as per Section1 1B of the Central excise Act, 1944. Revenue has not filed any appeal against this finding of the Commissioner (Appeal) and hence these finding have become final. The term building has not been defined by the Notification. For understanding the meaning of the said word reference is made to Merriam Webster Dictionary and the Concise Oxford Dictionary. In the case of Asha Murarka and others [MANU/WB/0282/2012], Hon ble Kolkata High Court has held that For the purpose of assessment of property tax, the area occupied or owned by the writ petitioners would be considered as a building within the meaning of definition of buildi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.01.2019' submitted to this office on 04.01.2019 at the time of the PH. 2. I find that the claimant have filed a refund calm of Rs.30,85,155/. I find that the said refund claim has been filed by the claimant in the capacity of service recipient. The ground of the said refund claim is that the claimant had purchased 08 flats and a shop in the building constructed by the Developer from M/s. Yog Reality. The claimant has argued that though as per the Entry No.13(c) of Notification No. 25/2012-ST dated 20/06/2012 there was an exemption from service tax to them, on demand from the Developer they had paid service tax amount to the developer, refund of which they are now claiming. 3. It is an argument of the claimant that as per Entry No. 13(c) of the Notification No. 25/2012-ST dated 20/06/2012 construction services provided to them were exempted service and since they have paid service tax of Rs.30,85,155/- to the Developer who subsequently deposited the same with Government Exchequer, they are rightly claiming refund claim of service tax paid by the Developer after collecting the same from them. 4. I have carefully gone through the text of Entry No. 13(c) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reality, developer (Service Provider). The issues to be decided in the instant case are stated as below: (1) Whether the service provided by M/s. Yog Reality to the Appellant by way of construction of building and for flats and shops owned by the Appeke registered under Section 12AA of the Income Tax Act. were exempted video Entry no. 13(c) of the Notification No. 25/2012-ST dated 20.06.2012? (ii) Whether the refund claim is liable for rejection on the grounds of limitations 7. As regards the first issue, I find that the Appellant had purchased under constructions 8(Eight) Flats and Shop from M/s. Yog Reality in terms of the Sale Agreement dated 19.12.2016. The Appellant paid Service Tax in instalments as and when demanded by the developer M/s. Yog Reality. Further, the developer deposited the amount so collected in the government treasury and certified the same. The Appellant held that no Service Tax was payable on the above transaction as a religious body registered under section 12AA of the Income Tax Act, 1961 the services provided by the developer are eligible for exemption in terms of Notification No. 25/20012-STdated 20.06.2012 vide Entry No. 13 (c). Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntity registered under section 12 AA of the Income tax Act, 1961(43 of 1961) and meant predominantly for religious use by general public: 7.2 From a bare reading of the provisions above, it is apparently clear that the said exemption has been provided to services which are provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of building owned by an entity registered under section 12AA of the Income Tax Act and such building are to be used predominantly for religious use. In this regard, the Appellant argued that the term 'building' has not been defined under the said notification neither under the Finance Act or the Rules made thereunder. Further, the common parlance and dictionary meanings of the word 'building' i) A structure with a roof and walls, such as a house or factory.(Ref: www.oxforddictionaries.com) ii) a usually roofed and walled structure built for permanent use (as for a dwelling)-Merriam Webster Dictionary iii) a structure with walls and a roof, such as a house or factory(Ref : www.collinsdictionary.com) 7.3 It is the contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income tax Act, 1961 and meant predominantly for religious use by general public on the services received by them for building owned by them. The exemption is qua the entity. The exemption is granted to the institute. The exemption is denied by the revenue that the flats were predominantly for religious use by the general public. In view of the ratio of Hon ble Supreme Court in the case of Notified Area Committee Nangal Township v. Bhakra Management Board, Chandigarh and Ors. J.T. 1999 (5) SC 349 the flats in a multistoried building though having common wall would be considered a separate 'building', qua the religious institution, for the purposes of the benefit of the Notification. 7.6 As regards the argument above that it was the intention of the Government in granting exemption qua-entity, I find that in the subsequent decision on the interpretation of exemption notification the Hon'ble Supreme Court in the case of DILIP KUMAR COMPANY, 2018 (361) E.L.T. 577 (S.C.) has held that where the words in a statute are clear, plain and unambiguous and only one meaning can be inferred, Courts are bound to give effect to the said meaning irrespective of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l or plain meaning test. The other tools of interpretation, namely contextual or purposive interpretation cannot be applied nor any resort be made to look to other supporting material, especially in taxation statutes. Indeed, it is well-settled that in a taxation statute, there is no room for any intendment; that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification. Equity has no place in interpretation of a tax statute. Strictly one has to look to the language used; there is no room for searching intendment nor drawing any presumption. Furthermore, nothing has to be read into nor should anything be implied other than essential inferences while considering a taxation statute. 7.7 Further, it also held that the burden to prove for its entitlement is on the assessee claiming exemption and If there is any ambiguity in exemption Notification, benefit of such ambiguity cannot be claimed by assessee and it must be interpreted in favour of Revenue. It also held that the ratio of Supreme Court judgment in Sun Export Corporation (1997 (93) E.L.T. 641 (S.C.)] and all decisions taking similar view as in S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article is found to satisfy the test by which it falls in the notification, then it cannot be excluded from it by construing such notification narrowly . 19. Therefore, the clause 2(e) of the Notification No. 41/2007- S.T. must be applied strictly, and the Appellant cannot selectively seek relief of the said notification. The CESTAT has passed a laconic, well-reasoned and thorough order upholding the order of the Commissioner (Appeals), which merits absolutely no interference by us. 20. Therefore, the question of law raised in this appeal is answered against the Appellant and in favour of the Respondent and this appeal is hereby dismissed. 7.9 In view of the above, while interpreting the exemption notification a Strict interpretation needs to be taken, hence the impugned order of the lower adjudicating authority rejecting the refund claims are justifiable and the Appellant will not be eligible for the benefit of Entry No. 13(C) of the Notification No. 25/2012-ST dated 20.06.2012. Held accordingly. 4.3 By the impugned order Commissioner (Appeals) has held that the refund claim filed by the appellant was filed in time and will not be hit by the limitation as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Black s Law Dictionary (10th Edn.) strict interpretation is described as under : Strict interpretation. (16c) 1. An interpretation according to the narrowest, most literal meaning of the words without regard for context and other permissible meanings. 2. An interpretation according to what the interpreter narrowly believes to have been the specific intentions or understandings of the text s authors or ratifiers, and no more. - Also termed (in senses 1 2) strict construction, literal interpretation; literal construction; restricted interpretation; interpretatio stricta; interpretatio restricta; interpretatio verbalis. 3. The philosophy underlying strict interpretation of statutes. - Also termed as close interpretation; interpretatio restrictive. See strict constructionism under constructionism. Cf. large interpretation; liberal interpretation (2). Strict construction of a statute is that which refuses to expand the law by implications or equitable considerations, but confines its operation to cases which are clearly within the letter of the statute, as well as within its spirit or reason, not so as to defeat the manifest purpose of the legislature, but so as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o accept some form of essential inferences which literal rule may not accept. 25. 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 at the cost of repetition that strict interpretation of a statute certainly involves literal or plain meaning test. The other tools of interpretation, namely contextual or purposive interpretation cannot be applied nor any resort be made to look to other supporting material, especially in taxation statutes. Indeed, it is well-settled that in a taxation statute, there is no room for any intendment; that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification. Equity has no place in interpretation of a tax statute. Strictly one has to look to the language used; there is no room for searching intendment nor drawing any presumption. Furthermore, nothing has to be read into nor should anything be implied other than essential inferences while considering a taxation statute. 26. Justice G.P. Singh, in his treatise Princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... biguously impose the tax on him , [Russel v. Scott, (1948) 2 All ER 1]. The proper course in construing revenue Acts is to give a fair and reasonable construction to their language without leaning to one side or the other but keeping in mind that no tax can be imposed without words clearly showing an intention to lay the burden and that equitable construction of the words is not permissible [Ormond Investment Co. v. Betts, (1928) AC 143]. Considerations of hardship, injustice or anomalies do not play any useful role in construing taxing statutes unless there be some real ambiguity [Mapp v. Oram, (1969) 3 All ER 215]. It has also been said that if taxing provision is so wanting in clarity that no meaning is reasonably clear, the Courts will be unable to regard it as of any effect [IRC v. Ross and Coutler, (1948) 1 All ER 616]. Further elaborating on this aspect, the Learned author stated as follows : Therefore, if the words used are ambiguous and reasonable open to two interpretations benefit of interpretation is given to the subject [Express Mill v. Municipal Committee, Wardha, AIR 1958 SC 341]. If the Legislature fails to express itself clearly and the taxpayer esca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess itself clearly . 27. Now coming to the other aspect, as we presently discuss, even with regard to exemption clauses or exemption notifications issued under a taxing statute, this Court in some cases has taken the view that the ambiguity in an exemption notification should be construed in favour of the subject. In subsequent cases, this Court diluted the principle saying that mandatory requirements of exemption clause should be interpreted strictly and the directory conditions of such exemption notification can be condoned if there is sufficient compliance with the main requirements. This, however, did not in any manner tinker with the view that an ambiguous exemption clause should be interpreted favouring the revenue. Here again this Court applied different tests when considering the ambiguity of the exemption notification which requires strict construction and after doing so at the stage of applying the notification, it came to the conclusion that one has to consider liberally. 4.5 Thus it is clear from the above in the case of Dilip Kumar Co, Hon ble Supreme Court has itself rejected the argument advanced to the effect that strict interpretation and literal inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss there is something in the context, or in the object of the statute to suggest the contrary. Where a word has a secondary meaning, the assessment is whether the natural, ordinary or popular meaning flows from the context in which the word has been employed. In such cases, the distinction disappears and Courts must adopt the meaning which flows as a matter of plain interpretation and the context in which the word appears. (ii) Accelor Mittal Nippon Steel India Ltd. [2022 (379) ELT 418 (SC)] has observed as follows: 14.1 While the exemption notification should be liberally construed, beneficiary must fall within the ambit of the exemption and fulfill the conditions thereof. In case such conditions are not fulfilled, the issue of application of the notification does not arise. 14.2 It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. An exception and/or an exempting provision in a taxing statute should be construed strictly and it is not open to the Court to ignore the conditions prescribed in industrial policy and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... building owned by an entity registered under section 12 AA of the Income tax Act, 1961(43 of 1961) and meant predominantly for religious use by general public. Undisputedly the appellant is an entity registered under section 12AA of Income Tax Act, 1961 (43 of 1961), and the premises held by them are meant predominantly for religious use by general public. Thus in our view the appellant are entity who are eligible to claim the benefit of this exemption. revenue also do not dispute this aspect. In the case of Talanpur Ramsabha Bhavan [2020=TIOL-1307-CESTAT-Del] following has been held: 8. Having considered the rival contentions, I am satisfied that the appellant is in possession of the certificate of registration under Section 12A(a) read with Section 12AA of the Income Tax Act. The certificate is granted under Section 12A and the procedure for grant of certificate is given in Section 12AA of the Income Tax Act. Further, it is evident from the certificate of registration dated 8-12-1998, that the appellant is having the status of being registered under the provisions of Section 12AA of the Income Tax Act. Further, the appellant has also led evidence that they are continuing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;building' which is incomprehensible. The Committee was not justified in clubbing all the quarters/bungalows in one block together and term that as 'building'. 4.8 After taking note of this decision, Hon ble High Court of Rajasthan has in the case of Bharat Petroleum Corporation [RLW 2008 (1) Raj 439] held as follows: 18. More than hundred years ago, Earl of Halsbury L.C. stated in the case of Grant v. Langston that the word house has acquired an artificial meaning. The word is no longer the expression of a simple idea; but to ascertain its meaning one must understand the subject matter with respect to which it is used in order to arrive at the sense in which it is employed in a statute. Each flat in a multi-storied building is a separate occupation and is a separate place of dwelling and habitation with the separate entry. 19. Seen thus, it is difficult to uphold the contention of State that group of flats in a multi-storied building owned by one person constitute one 'building' within the meaning of Section 2(3). For all legal and ordinary purposes, each separate flat in a multi-storied building would constitute a separate house or for that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alls because the ground would not have a separate existence, apart from the building. 13. Thus it is clear that a tank to be a building must be a structure designed for either habitation or shelter for human habitation or storage of inanimate objects in storehouse or stable for horses shed or a hut etc. within the four corners of the walls built with masonary or otherwise with ingress or egress. The word building must be given its ordinary natural meaning ascribable to it including the fabric and the ground on which it stands. On a mere look at the tank, by no stretch of imagination, it could be said to be a building. 4.10 In view of the decisions as above we are of the view the word building used in entry at Sl No 13 (c) of the Notification No 25/2012-ST is wide enough cover the shop and flats purchased by the appellant in the project being developed by the M/s Yog Reality. That being so benefit of exemption under the said entry cannot be denied to the appellant on this ground. 4.11 Authorized representative has raise the issue of unjust enrichment. However he has failed to specify how the same can be applied in the present case where the claimant is recipient of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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