IMPORTANT POINT
Interpretation of Statute – Punctuation, though a minor element, may be resorted to for the purpose of construction – A construction leading to an anomalous result has to be avoided.

JUDGMENT :

DIPANKAR DATTA, J.

PREFACE

1. We are tasked to decide two civil appeals that centre around a common question: whether the educational institutions in question, viz. (i) the Indian Institute of Technology, Patna (“IIT Patna” hereafter) and (ii) the National Institute of Technology, Rourkela (“NIT Rourkela” hereafter), are covered by the definition of “governmental authority” in Mega Service Tax Exemption Notification¹ [No. 25/2012, G.S.R. 467(E) dated 20th June, 2012] (“Exemption Notification” hereafter) inter-alia exempting various services from the tax network rendered to government, governmental, or local authorities. If “governmental authority” as defined in the Exemption Notification takes within its embrace IIT Patna and NIT Rourkela, they would be eligible for an exemption from the service tax that otherwise applies to construction services provided by service providers or subcontractors within their premises.

THE APPEALS

2. In Civil Appeal No. 3991 of 2023 (“CA-I” hereafter), the appellant assails the judgment and order dated 03rd March, 2016 of the High Court of Judicature at Patna (“Patna High Court” hereafter) whereby a writ petition² [CWJC No. 16965 of 2015] preferred by the first respondent, i.e. M/s Shapoorji Pallonji and Company Pvt. Ltd. (“SPCL” hereafter) was allowed and the service tax collected by the appellant was directed to be refunded.

3. Civil Appeal No. 3992 of 2023 (“CA-II” hereafter) challenges the judgment and order dated 05th February, 2018 of the High Court of Orissa at Cuttack (“Orissa High Court” hereafter). The Orissa High Court while relying on the aforesaid decision of the Patna High Court in favour of SPCL, on a similar question of law, allowed a writ petition³ [W.P. (C) No. 17188 of 2015] preferred by SPCL for refund of service tax.

THE RELEVANT NOTIFICATIONS

4. The Exemption Notification, under consideration, was issued by the Department of Revenue under section 93 of the Finance Act, 1994 (“the 1994 Act” hereafter) inter-alia exempting various taxable services from the levy of whole of the service tax under section 66B thereof. Clause 12(c) of the Exemption Notification, which is relevant for the purpose of the present adjudication, reads as follows:

“12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of:

(a) ***

(b) ***

(c) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment;

(d) ***

(e) ***

(f) ***”

5. Since we are concerned with the interpretation of “governmental authority” clause 2(s) of the Exemption Notification defining “governmental authority” is reproduced hereunder:

“(s) “governmental authority” means a board, or an authority or any other body established with 90% or more participation by way of equity or control by Government and set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W of the Constitution.”

6. It may also be noticed that section 66D of the 1994 Act, inserted by the Finance Act, 2012 with effect from 1st July, 2012, specifies the negative list of services, i.e. the services on which service tax is not leviable.

7. Clause 2(s) of the Exemption Notification underwent an amendment vide a Notification dated 30th January, 2014 (“Clarification Notification” hereafter). This amendment, re-defining “governmental authority” sought to broaden the scope of the exemption. The amended definition is set out herein-below:

“(s) “governmental authority” means an authority or a board or any other body.

(i) set up by an Act of Parliament or a State Legislature.

(ii) established by Government, with 90% or more participation by way of equity or control, to carry out any function e