COMMISSIONER, CUSTOMS CENTRAL EXCISE AND SERVICE TAX, PATNA versus M/S SHAPOORJI PALLONJI AND COMPANY PVT. LTD. & ORS.

Citation: [2023] 15 S.C.R. 421 · Decided: 13-10-2023 · Supreme Court of India · Bench: S. RAVINDRA BHAT · Disposal: Dismissed

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Judgment (excerpt)

[2023] 15 S.C.R. 421 : 2023 INSC 910
421
CASE DETAILS
COMMISSIONER, CUSTOMS CENTRAL EXCISE AND 
SERVICE TAX, PATNA
v.
M/S SHAPOORJI PALLONJI AND COMPANY PVT. 
LTD. & ORS.
(Civil Appeal No. 3991 of 2023 Etc.)
OCTOBER 13, 2023
[S. RAVINDRA BHAT AND DIPANKAR DATTA, JJ.]
HEADNOTES
Issue for consideration: Whether the educational institutions-Indian 
Institute of Technology, Patna and the National Institute of Technology, 
Rourkela are covered by the defi nition of “governmental authority” in 
Mega Service Tax Exemption Notifi cation inter alia exempting various 
services from the tax network rendered to government, governmental, or 
local authorities.
Tax/Taxation – Service tax – Exemption from – Eligibility – 
Educational institutions-IIT Patna and NIT Rourkela if covered by the 
defi nition of ‘Government authority’ in Mega Service Tax Exemption 
Notifi cation No. 25/2012, G.S.R 467(E) dated 20th June, 2012, exempting 
various service from service tax:
Held: Educational institutions-IIT Patna and NIT Rourkela fall under 
the amended defi nition of ‘Government authority’ under clause 2(s) and 
are eligible for the benefi t in the Exemption Notifi cation to the educational 
institutions and exempted from service tax – Amended definition of 
‘government authority’ in clause 2(s) by way of Clarifi cation Notifi cation, 
has widened the exemption base for service tax to be provided even to an 
authority or a board or any other body, set up by an Act of Parliament or a 
State Legislature without the condition of having been established with 90% 
or more participation by way of equity or control by Government to carry 
out any function entrusted to a municipality u/Art. 243W – Clarifi cation 
Notifi cation introduced an amended version of clause 2(s), which re-defi ned 
422 
SUPREME COURT REPORTS 
[2023] 15 S.C.R.
“governmental authority” with a purpose to make the clause workable in 
contra-distinction to the earlier defi nition – Decisions of the Patna High 
Court and the Orissa High Court rightly extending the benefi t of the 
Exemption Notifi cation to the educational institutions, and a fortiori, to 
SPCL, is upheld – Thus, the impugned judgments and orders are upheld – 
Constitution of India – Art. 243W. [Paras 30, 34]
Circular/Government order/Notifi cation – Mega Service Tax 
Exemption Notifi cation – Clause 2(s)(as amended by clarifi cation 
Notifi cation), defi ning ‘Government Authority’ – Interpretation of word 
‘or’ employed in clause 2(s):
Held: Word “or” employed in clause 2(s) manifests the legislative intent 
of prescribing an alternative – Going by the golden rule of interpretation that 
words should be read in their ordinary, natural, and grammatical meaning, 
the word “or” in clause 2(s) clearly appears to have been used to refl ect the 
ordinary and normal sense, that is to denote an alternative, giving a choice; 
and, a diff erent meaning cannot be assigned unless it leads to vagueness or 
makes clause 2(s) absolutely unworkable – Word “or” between sub-clauses 
(i) and (ii) indicates the independent and disjunctive nature of sub-clause 
(i), meaning thereby that “or” used after sub-clause (i) cannot be interpreted 
as “and” so as to tie it with the condition enumerated in the long line of 
clause 2(s) which is applicable only to sub-clause (ii) – Literally read, the 
conjunction ‘or’ between sub-clauses (i) and (ii) clearly divides the two 
clauses in two parts with the fi rst part completely independent of the second 
part – First part is by itself complete and capable of operating independently 
– While the Clarifi cation Notifi cation introduced an amended version of 
clause 2(s), “governmental authority” was re-defi ned with a purpose to 
make the clause workable in contra-distinction to the earlier defi nition – 
Thus, this Court cannot overstep and interpret “or” as “and” so as to allow 
the alternative outlined in clause 2(s) to vanish – There exists no ambiguity 
insofar as the interpretation of clause 2(s) is concerned – Notifi cation No. 
25/2012, G.S.R 467(E) dated 20th June, 2012. [Paras 23, 24, 28].
Circular/Government order/Notifi cation – Mega Service Tax 
Exemption Notifi cation – Clause 2(s)(as amended by clarifi cation 
Notifi cation) – Punctuation in clause 2(s) of the Clarifi cation Notifi cation 
defi ning ‘Government Authority’ – Interpretation of:
423
Held: Punctuation, though a minor element, may be resorted to for 
the purpose of construction – Use of a semicolon is not a trivial matter but a 
deliberate inclusion

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