{"id":25677,"date":"2022-02-23T20:04:40","date_gmt":"2022-02-23T14:34:40","guid":{"rendered":"https:\/\/tradebrains.in\/features\/sc-tax\/"},"modified":"2022-02-23T20:04:40","modified_gmt":"2022-02-23T14:34:40","slug":"sc-tax","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/features\/sc-tax\/","title":{"rendered":"Exception or exempting provision in taxing statute should be construed strictly: SC"},"content":{"rendered":"<div class=\"trade-content_2\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-2489793081\"><p><a href=\"https:\/\/tradebrains.in\/get\/telegram\/\"><img decoding=\"async\" class=\"alignnone wp-image-101992\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2023\/01\/telegram-channel-300x119.png\" alt=\"\" width=\"148\" height=\"59\" \/><\/a> <a href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN3Epgswxc--Aw?hl=en-IN&amp;gl=IN&amp;ceid=IN%3Aen\"><img decoding=\"async\" class=\"alignnone wp-image-123430\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png\" alt=\"follow-on-google-news\" width=\"222\" height=\"61\" srcset=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png 300w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-150x41.png 150w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news.png 468w\" sizes=\"(max-width: 222px) 100vw, 222px\" \/><\/a><\/p>\n<\/div><p>New Delhi, Feb 23 (PTI) The Supreme Court Wednesday said an exception or exempting provision in a taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the policy and notifications issued in that regard.<\/p><div class=\"trade-content_7\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-2202784267\"><!-- Composite Start --> \r\n <div id=\"M923760ScriptRootC1549812\"> \r\n <\/div> \r\n <script src=\"https:\/\/jsc.mgid.com\/t\/r\/tradebrains.in.1549812.js\" async> \r\n <\/script> \r\n <!-- Composite End --><\/div>\n<p>The apex court said the exemption notification should be given meaning according to the legislative intendment and such statutory provisions have to be interpreted in light of the \u201cwords employed in them\u201d.<\/p>\n<p>A bench of Justices M R Shah and B V Nagarathna dismissed a batch of appeals arising out of the judgement passed by the principal bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi.<\/p>\n<p>The CESTAT had said that the appellants, \u2018Krishi Upaj Mandi Samiti\u2019 (Agricultural Produce Market Committees) located in different parts of Rajasthan, were liable to pay service tax under the category of \u201crenting of immovable property service\u201d for the period up to June 30, 2012.<\/p><div class=\"trade-content_5\" id=\"trade-433126907\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_2_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"7925020301\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div>\n<p>In its 18-page judgement, the apex court noted that as per the law laid down by the top court, in a taxing statute, it is the plain language of provision that has to be preferred, where the language is plain and is capable of determining a defined meaning.<\/p>\n<p>\u201cAn 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 the relevant policy and the exemption notifications issued in that regard,\u201d the bench said.<\/p>\n<p>\u201cThe exemption notification should be strictly construed and given meaning according to legislative intendment. The statutory provisions providing for exemption have to be interpreted in light of the words employed in them and there cannot be any addition or subtraction from the statutory provisions,\u201d it noted.<\/p>\n<p>The top court noted that appellants before it, that is \u2018Krishi Upaj Mandi Samiti\u2019 located in different parts of Rajasthan, is established under the provisions of the Rajasthan Agricultural Produce Markets Act, 1961.<\/p>\n<p>It noted that Samiti regulates the sale of agricultural produce in the notified markets and they charge a \u201cmarket fee\u201d for issuing the license to traders, agents, factory\/storage, company, or other buyers of other agricultural produce.<\/p>\n<p>The appellants also rent out land and shops to traders and collect the allotment fee or lease amount for it.<\/p><div class=\"trade-content-10\" id=\"trade-3698906176\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_3_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"2969612066\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div>\n<p>The bench noted that the concerned revenue department was of the view that appellants are liable to pay service tax on the services rendered by them by renting or leasing the lands and shops and show cause notice was issued by the concerned jurisdictional authorities.<\/p>\n<p>After adjudication, it was held that the appellants were not liable to pay service tax on \u201cmarket fee\u201d or \u201cmandi shulk\u201d collected by them.<\/p>\n<p>However, they were held liable for service tax under the category of \u201crenting of immovable property\u201d in respect of renting of land or shops.<\/p>\n<p>The service tax demands were confirmed and later, the appellants preferred appeals before the CESTAT \tDuring the arguments before the apex court, the counsel appearing for the appellants, had said as the activity of allotment of shops or space to traders and brokers by market committees for the purpose of storage or marketing of agricultural produce is in the nature of a statutory activity as mandated under section 9 of the 1961 Act, they are exempted from payment of service tax on such services as per a circular of December 18, 2006.<\/p>\n<p>The bench noted that the appellants are claiming exemption under 2006 circular.<\/p>\n<p>\u201cAs per the exemption circular only such activities performed by the sovereign\/public authorities under the provisions of law being mandatory and statutory functions and the fee collected for performing such activities is in the nature of a compulsory levy as per the provisions of the relevant statute and it is deposited into the government treasury, no service tax is leviable on such activities,\u201d it said.<\/p>\n<p>The apex court said the exemption notification should not be liberally construed and the beneficiary must fall within the ambit of the exemption and fulfill the conditions thereof.<\/p>\n<p>The bench noted that on and after July 1, 2012, such activity carried out by the agricultural produce market committees is placed in the negative list.<\/p>\n<p>\u201cThe fact that, on and after July 1, 2012, such activity by the market committees is put in the negative list, it can safely be said that under the 2006 circular, the market committees were not exempted from payment of service tax on such activities,\u201d it said.<\/p>\n<p>\u201cIn view of the above and for the reasons stated above, all these appeals fail and the same deserves to be dismissed and are accordingly dismissed,\u201d the bench said. PTI ABA  ABA RKS RKS<\/p>\n<div class=\"trade-after-content\" id=\"trade-2796320197\"><div id=\"taboola-below-article-thumbnails\"><\/div>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({\r\n    mode: 'alternating-thumbnails-a',\r\n    container: 'taboola-below-article-thumbnails',\r\n    placement: 'Below Article Thumbnails',\r\n    target_type: 'mix'\r\n  });\r\n<\/script>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({flush: true});\r\n<\/script><\/div>","protected":false},"excerpt":{"rendered":"<p>New Delhi, Feb 23 (PTI) The Supreme Court Wednesday said an exception or exempting provision in a taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the policy and notifications issued in that regard. The apex court said the exemption notification should be given [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[31],"tags":[],"class_list":["post-25677","post","type-post","status-publish","format-standard","hentry","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.5 (Yoast SEO v25.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Exception or exempting provision in taxing statute should be construed strictly: SC - Trade Brains Features<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tradebrains.in\/features\/sc-tax\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Exception or exempting provision in taxing statute should be construed strictly: SC\" \/>\n<meta property=\"og:description\" content=\"New Delhi, Feb 23 (PTI) The Supreme Court Wednesday said an exception or exempting provision in a taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the policy and notifications issued in that regard. 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