ABCDEFGH3engineer” under Section 65(31) of the Finance Act v. Dilip Kumar& Co

ABCDEFGH3engineer” under Section 65(31) of the Finance Act, 1994 and hadnot considered any other issues/grounds raised in the Memo ofAppeal before the CESTAT. Therefore, the matter is remandedto the CESTAT to examine and decide the appeal on othergrounds. [Para 13][34-D-G]Commissioner of Customs (Import), Mumbai v. Dilip Kumar& Co., (2018) 9 SCC 1: [2018] 7 SCR 1191 – followed. Commissioner of Income Tax, Bangalore v. J.H. Gotla, Yadagiri, (1985) 4 SCC 343 : [1985] 2 Suppl. SCR 711;K.P. Varghese v. Income Tax Officer, Ernakulam (1981)4 SCC 173 : [1982] 1 SCR 629 – relied on.TCS v. Union of India 2016 (44) STR 33 (KAR);M.N. Dastur Ltd. v. Union of India 2006 (4) STR (3)CAL – approved.CCE v. Simplex Infrastructure & Laundry Works 2014(34) STR 191 (DEL), ST Bangalore v. TurbotechPrecision 2010 (18) STR 545, Commissioner of ServiceTax, Bangalore v. ARACO Corporation, Japan 2010SCC OnLine KAR 5448, Commissioner, Central Excise& Customs, Kerala v. Larsen & Toubro Limited, (2016)1 SCC 170 : [2015] 8 SCR 1046, Motipur ZamindariCo. Ltd. v. State of Bihar, AIR 1953 SC 320 : [1953]SCR 720; Vanguard Fire & General Insurance Co. Ltd.,Madras v. Fraser and Ross, AIR 1960 SC 971: [1960]SCR 857; Bhag Mal v. Ch. Prabhu Ram, (1985) 1 SCC61 : [1985] 1 SCR 1099; Pappu Sweets and Biscuits v.Commissioner of Trade Tax, U.P, Lucknow (1998) 7SCC 228 : [1998] 2 Suppl. SCR 119; Gem Granites v.CIT, T.N., (2005) 1 SCC 289 : [2004] 6 Suppl. SCR332; CIT v. Century Spinning and Manufacturing Co.Ltd. (1953) 24 ITR 499, Vazir Sultan Tobacco Co. Ltd.v. CIT, A.P., Hyderabad, (1981) 4 SCC 435 : [1982] 1SCR 789; CIT v. Vatika Township Private Limited, (2015)1 SCC 1 : [2014] 12 SCR 1037; Tata ConsultancyServices v. Union of India, 2001 (130) ELT 726; M.N.Dastur Limited v. Union of India, 2006 (2) STR 532CAL – referred to.COMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. ABCDEFGH4SUPREME COURT REPORTS[2022] 17 S.C.R.Case law reference[1982] 1 SCR 629relied onPara 8.1[1985] 2 Suppl. SCR 711relied onPara 8.2[2018] 7 SCR 1191followedPara 8.3[2015] 8 SCR 1046referred toPara 3.7[1953] SCR 720 referred toPara 3.10[1960] SCR 857 referred toPara 3.11[1985] 1 SCR 1099referred toPara 3.12[1998] 2 Suppl. SCR 119referred toPara 4.2[2004] 6 Suppl. SCR 332referred toPara 4.2[1982] 1 SCR 789referred toPara 4.8[2014] 12 SCR 1037referred toPara 4.9CIVIL APPELLATE JURISDICTION : Civil Appeal No.4928of 2018.From the Judgment and Order dated 04.12.2015 in Order No.STA/53723/2015-CU(DB) of the CESTAT, New Delhi in Appeal No.ST/136/2007.Balbir Singh, ASG, Ms. Nisha Bagchi, Shyam Gopal, Amit Sharma, Adit Khorana, Arvind Kumar Sharma, Mukesh Kumar Maroria, Advs.for the Appellant.P. K. Sahu, Kedar Nath Tripathy, Advs. for the Respondent. The Judgment of the Court was delivered byM. R. SHAH, J.1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 04.12.2015 passed by the Customs, Excise & ServiceTax Appellate Tribunal, Principal Bench, West Block No.2, R.K. Puram, New Delhi (hereinafter referred to as the ‘CESTAT) in Appeal No. ST/136/2007, by which the learned CESTAT has allowed the said appealpreferred by the respondent herein and has set aside the demand towardsthe service tax by holding that the services rendered by the respondent– “Consulting Engineer Service” were not subjected to service tax, theRevenue has preferred the present appeal. ABCDEFGH52. That the respondent herein – M/s Sepco Electric PowerConstruction Corporation is a Government of China companyincorporated in the Republic of China, having its office at SPEC SiteOffice, Balco Nagar, Korba (C.G), entered into a contract dated26.04.2003 with M/s. Bharat Aluminium Co. Ltd., Korba (for short,“BALCO”) for providing “Design Engineering Services” and “ProjectManagement & Technical Services”. In terms of the said agreement, itrendered “Consulting Engineer Services” to M/s BALCO. As per theRevenue, on the services rendered by the respondent as “ConsultingEngineer Services”, the respondent was liable to pay the service tax. According to the Revenue, neither the respondent was registered underthe Service Tax Act nor it paid the service tax on receipt of paymentsfor such services. According to the Revenue, under the contract, taxableservice valued at Rs. 1,12,90,53,457/- was already rendered and thepayments were made to the respondent by M/s. BALCO, on whichservice tax liability worked out was Rs. 10,42,71,437/- which was notpaid by the respondent. According to the Revenue, it also failed to obtainService Tax Registration from the department.2.1 A show cause notice dated 26.05.2006 was issued by theCommissioner of Central Excise, Raipur to the respondent under Section73 read with Sections 65, 66 and 68 of the Finance Act, 1994 demandingthe service tax along with interest under Section 75 and for imposition ofpenalty under Sections 76 & 77 of the Finance Act, 1994.2.2 The Commissioner of Central Excise, Raipur vide Order-in-Original dated 31.01.2007 confirmed the demand of service tax amountingto Rs.10,42,71,437/- and ordered for its recovery along with interest. The Commissioner also imposed penalty amounting to the same amountunder Section 78 of the Finance Act, 1994, besides imposing penalty ofRs. 150/-per day under Section 76 and Rs.1000/- under Section 77 ofthe Finance Act, 1994.2.3 Feeling aggrieved and dissatisfied with the Order-in-Originaldated 31.01.2007, the respondent preferred an appeal before theCESTAT, New Delhi bearing Appeal No. ST/136/2007.2.4 By the impugned judgment and order, the CESTAT has allowedthe said appeal setting aside the demand of service tax by holding thatduring the relevant period of dispute, namely, August, 2003 to November,2005, the respondent being a body corporate was not covered under theCOMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH6SUPREME COURT REPORTS[2022] 17 S.C.R.definition of “Consulting Engineer”. Solely on the aforesaid ground, theCESTAT has set aside the demand.2.5 Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the learned CESTAT in setting aside the demand byholding that during the relevant period the respondent being a bodycorporate was not covered under the definition of “Consulting Engineer”,the Revenue has preferred the present appeal.3. Shri Balbir Singh, learned Additional Solicitor General of Indiahas appeared on behalf of the Revenue and Shri P.K. Sahu, learnedAdvocate has appeared on behalf of the respondent.3.1 Shri Balbir Singh, learned ASG appearing on behalf of theRevenue has submitted that the issue involved in the present appealrelates to the scope of the definition of “Consulting Engineer” underSection 65 (31) of the Finance Act, 1994, specifically as to whether a“body corporate” is covered within its sweep prior to the amendment in2005. It is submitted that the definition of “Consulting Engineers” inSection 65 (31) covers services provided to a client by a professionallyqualified engineer or an Engineering firm consisting of professionallyqualified engineers. It is submitted that the taxable attribute is that theservices must be rendered in a professional capacity.3.2 It is submitted that it is well settled that while construing taxationstatutes, the Courts have to apply the strict rule of construction. It issubmitted that strict interpretation does not encompass strict literalisminto its fold. This could result in ignoring an important aspect that is“apparent legislative intent”. It is submitted that in the case ofCommissioner of Customs (Import), Mumbai v. Dilip Kumar & Co.,(2018) 9 SCC 1 (para 28), this Court has held and observed that ‘strictinterpretation’ does not encompass such literalism, which lead to absurdityand go against the legislative intent. It is submitted that if literalism is atthe far end of the spectrum, wherein it accepts no implications orinferences, then strict interpretation can be implied to accept some formof essential inferences which literal rule may not accept. It is submittedthat in the aforesaid decision it is further held and reiterated that essentialinferences can be read in while construing a taxing statute.3.3 It is submitted that the definition of the term “ConsultingEngineer” has been tested on this principle in the decision of the KarnatakaHigh Court in Tata Consultancy Services v. Union of India, 2001 ABCDEFGH7(130) ELT 726. It is submitted that the High Court proceeded on theprinciple that it is fairly well settled that where the language of a statutein its ordinary meaning leads to a manifest anomaly or contradiction, theCourt is entitled to put upon it a construction which modifies the meaningof the words used in the same. It is submitted that thereafter in para 11,it is observed and held as under:“The position is no different in the instant case. There is, in myopinion, nothing repugnant in the subject or context of the Act, which should prevent the inclusion of a Company for purposes oflevy of service tax on any advice, consultancy or technicalassistance provided by it to its clients in regard to one or moredisciplines of engineering. Indeed, if the argument advanced onbehalf of the petitioner is accepted, it would remove all companiesproviding technical services, advice or consultancy to their clientsfrom the tax net while any such services rendered by an individualor a partnership concern would continue to remain taxable. TheAct does not, in my opinion, envisage any such classification letalone create and perpetuate anomalies that would flow from thesame. The view taken by the Additional Commissioner of CentralExcise that the petitioner-company was liable to pay service taxcannot therefore be found fault with.”3.4 It is submitted that the aforesaid decision of the KarnatakaHigh Court in the case of Tata Consultancy Services (supra) wasfollowed by the Calcutta High Court in the case of M.N. Dastur Limitedv. Union of India, 2006 (2) STR 532 CAL. It is further submitted thatthe aforesaid two decisions have been subsequently affirmed by theDivision Benches of the respective High Courts.3.5 It is submitted that in the case of TCS v. Union of India2016 (44) STR 33 (KAR), it was held that the intention of the legislatureis to bring within the ambit of the service tax, the “consulting engineer”and so long as the person is a consulting engineer, whether it be anindividual, firm or even a company, they come under the ambit of“consulting engineer”.3.6 It is submitted that in the case of M.N. Dastur Ltd. v. Unionof India 2006 (4) STR (3) CAL, itwasinter alia held that it isinconceivable that a “consulting engineer” as an individual or constitutinga partnership firm or a proprietorship firm would be liable to pay taxunder the service tax laws, but the same persons forming a company, aCOMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH8SUPREME COURT REPORTS[2022] 17 S.C.R.different juristic person, a distinct legal entity apart from the shareholders, would be outside the tax net. It is submitted that it is further held thatthere is no reason as to why a company providing “taxable service” asdefined under Section 65 (48)(g) would not be a taxable service, when itwould be so when provided by an individual qualified engineer or aproprietorship or partnership firm of engineers. It seems to be little absurd.It is submitted that in the aforesaid two decisions, the respective HighCourts have considered in detail the entire scheme of the statute and thecontext.3.7 It is submitted that while passing the impugned order, the learnedCESTAT has relied upon the decision of the Delhi High Court in thecase of CCE v. Simplex Infrastructure & Laundry Works 2014 (34)STR 191 (DEL) which followed an earlier decision of the KarnatakaHigh Court in the case of CST Bangalore v. Turbotech Precision 2010(18) STR 545. It is submitted that in the case of Turbotech Precision(supra), the High Court followed its earlier decision in the case ofCommissioner of Service Tax, Bangalore v. ARACO Corporation, Japan 2010 SCC OnLine KAR 5448. It is submitted that both thesedecisions contain no reasoning or any reference to the earlier bindingdecisions of a Co-ordinate Bench in the cases of TCS (supra) andM.N. Dastur (supra). It is submitted that in fact the department hadfiled appeals to this Court against the decisions in Turbotech Precision(supra) and Simplex Infrastructure (supra) being Civil Appeal Nos.6429/2015 and 6430/2015 respectively. However, the same have beendismissed on separate issue of taxability of works contract inCommissioner, Central Excise & Customs, Kerala v. Larsen &Toubro Limited, (2016) 1 SCC 170.3.8 It is further submitted that in the present dispute, the learnedTribunal has not at all applied its mind though it noted that it would requireconsideration of the contracts, to the aspect of works contract. Therefore, the said decision has no application to the present case.3.9 It is further submitted that the amendment of 2005 was purelyclarificatory in intent and purpose and the substitution of the words“engineering firm” with the words “any body corporate or any otherfirm” is only a clarification. The amendment did not aim at inclusion ofthe term “body corporate” simpliciter.3.10 Relying upon the decision of this Court in the case of MotipurZamindariCo. Ltd. v. State of Bihar, AIR 1953 SC 320, it is ABCDEFGH9further submitted by Shri Balbir Singh, learned ASG that it is observedand held by this Court that there is no reason to differentiate between anindividual proprietor and a company which owns estates or tenures.3.11 Relying upon the decision of this Court in the case ofVanguard Fire & General Insurance Co. Ltd., Madras v. Fraserand Ross, AIR 1960 SC 971, it is submitted by Shri Balbir Singh, learnedASG that it is observed and held by this Court that all statutory definitionsor abbreviations must be read subject to the qualification variouslyexpressed in the definition clauses which created them and it may bethat even where the definition is exhaustive inasmuch as the word definedis said to mean a certain thing, it is possible for the word to have asomewhat different meaning in different sections of the Act dependingupon the subject or the context.3.12 It is further submitted that in the case of K.P. Varghese v.Income Tax Officer, Ernakulam (1981) 4 SCC 173, this Court hasemphasised that the statutory provisions must be so construed, if possible, that absurdity and mischief may be avoided.It is submitted that followingthe aforesaid decision in the case of Bhag Mal v. Ch. Prabhu Ram, AIR 1985 SC 150 = (1985) 1 SCC 61, it is observed and held by thisCourt that the plain and literal interpretation of a statutory provisionproduces a manifestly absurd and unjust result, the Court might modifythe language used by the Legislature or even do some violence to it soas to achieve the obvious intention of the Legislature and produce arational construction.3.13 Making the above submissions and relying upon the aforesaiddecisions of the High Courts in the cases of TCS and M.N. Dastur(supra), it is prayed to allow the present appeal.4. The present appeal is vehemently opposed by Shri P.K. Sahu, learned Advocate appearing on behalf of the respondent.4.1 It is vehemently submitted that considering the provisions whichwas prevailing before the amendment on 01.05.2006 on interpretation ofSection 65 (31) of the Finance Act, 1994 and considering the fact thatthe definition of “consulting engineer” has been subsequently amendedfrom 01.05.2006 to specifically include such services of “any bodycorporate or any other firm”, the learned Tribunal has not committedany error in holding that prior to 01.05.2006, the company/body corporatewas not included within the meaning of “consulting engineer”.COMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH10SUPREME COURT REPORTS[2022] 17 S.C.R.4.2 It is submitted that in the cases of Pappu Sweets and Biscuitsv. Commissioner of Trade Tax, U.P, Lucknow (1998) 7 SCC 228and Gem Granites v. CIT, T.N., (2005) 1 SCC 289, this Court hasheld that subsequent legislation may be looked into to fix the properinterpretation of the statutory provision that stood earlier.4.3 It is submitted that the amendment to Section 65(31) wasprospective and not by way of clarification/removal of any doubt. It issubmitted that the Government in Part-III of the ExplanatoryMemorandum to Finance Bill, 2006, relating to service tax at Para (III)(10)and in Letter F.No. 334/2006-TRU dated 28.02.2006, explaining thechanges in Budget 2006-07 at para 3.12(10) explained specifically that“consulting engineer service” has been amended to include “engineeringconsulting services provided by any firm or body corporate”. It is submittedthat thus the intention was to bring in for the first time “engineeringconsulting services by body corporate”. It is submitted that therefore“body corporate” was not within the meaning of “consulting engineer”during the disputed period.4.4 Now so far as the reliance placed upon the decisions of theKarnataka High Court and Calcutta High Court in the cases of TCS &M.N. Dastur (supra) by the learned ASG is concerned, it is submittedthat the said decisions/rulings of the High Courts on “consulting engineer”were before the amendment of 2006. It is submitted that after theamendment, the High Courts of Delhi and Karnataka have relied uponthe subsequent legislation to interpret the earlier language and held that“body corporate” was not within the meaning of “consulting engineer”.It is submitted that there is no High Court ruling after the amendmentwhich has taken a different view. It is submitted that the learned CESTAThas been following consistently the view that “body corporate” becametaxable from 01.05.2006.4.5 It is submitted that the most appropriate meaning of “engineeringfirm” can be had by applying the principle of noscitur a sociis. Takingcolour from the expression “professionally qualified engineer”, anengineering firm should mean a partnership firm of professionally qualifiedengineers. After the amendment, all other kinds of firms and bodycorporates were included within the expression “consulting engineer”.4.6 It is further submitted that in India, in common parlance aswell as in legal circles, “firm” is understood as partnership firm and not ABCDEFGH11as company. Service tax was introduced in 1994, twenty-seven yearsback. It is submitted that Black’s Law Dictionary, 6th Edition (1990),defines “firm” as “Business entity or enterprise. An unincorporatedbusiness. Partnership of two or more persons.” 8th Edition (2004) of thisdictionary states that traditionally this term has referred to a partnership, but today it frequently refers to a company.4.7 It is further submitted that Indian legislatures and courts havebeen using “firm” and “company” as different expressions. In most ofthe enactments, including Finance Act, 1994, Income Tax Act, 1961,CGST Act, 2017, Companies Act, 2013, the word “person” has beendefined in the definitions clause to include “company” and “firm”separately. The service tax law (Finance Act, 1994) has considered firmand company/body corporate as separate entities in several provisions:65(19b) “business entity” include an association of persons, body of individuals, company or firm but does not include anindividual.65(105)(zzzl)…to a banking company or a financial institutionincluding a non-banking financial company or ay other bodycorporate or a firm, by any person, in relation to recovery ofany sums due to such banking company or financial institution, including a non-banking financial company, or any other bodycorporate or a firm, in any mannerIt is submitted that there are other such separate mention of “firm”and “company” in sections 65(105)(zzzl) and 73D Explanation. CGSTAct, 2017, mentions these terms separately in sections 90, 94, 137Explanation and 159. In Companies Act, 2013, sections 2(49(, 7, 25, 215and 341, the expressions firm and company/body corporate have beenused side by side. In other enactments, company has been defined toinclude firm for specific purposes, implying that both are not the same.4.8 Shri Sahu, learned counsel for the respondent has furthersubmitted that it is held by this Court in the cases of CIT v. CenturySpinning and Manufacturing Co. Ltd. (1953) 24 ITR 499 and VazirSultan Tobacco Co. Ltd. v. CIT, A.P., Hyderabad, (1981) 4 SCC435 = (1981) 132 ITR 559 (SC) that where an expression has notbeen defined, the Court shall resort to the ordinary natural meaning asunderstood in common parlance. It is submitted that in common parlance, Court rulings and legislations, “firm” has been always understood asCOMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH12SUPREME COURT REPORTS[2022] 17 S.C.R.partnership firm. Therefore, in the present case, “consulting engineer”before its amendment in 2006 should include only individual and partnershipfirm and not “body corporate”.4.9 It is further submitted that as observed and held by this Courtin the case of CIT v. Vatika Township Private Limited, (2015) 1 SCC1 that if the provision is ambiguous and is susceptible to twointerpretations, the interpretation which favours the assessee, as againstthe Revenue, has to be preferred.4.10 Making the above submissions, it is prayed to dismiss thepresent appeal.5. We have heard the learned counsel for the respective partiesat length. The short question which is posed for the consideration of thisCourt is, the scope of definition of “consulting engineer” under Section65(31) of the Finance Act, 1994, specifically as to whether a “bodycorporate” is covered within its sweep prior to the amendment in 2005.5.1 At this stage, it is required to be noted that post 2005, thedefinition of “consulting engineer” under Section 65(31) has been amendedand now it specifically includes a “body corporate”. Therefore, as such, with respect to the proceedings post amendment 2005, there will be nodifficulty. After the amendment, any “body corporate”, a service providerproviding the services as “consulting engineer” is liable to pay the servicetax. The only question which remains is, whether under the erstwhiledefinition of “consulting engineer” under Section 65(31) of the FinanceAct, 1994, a “body corporate” providing services as “consulting engineer”was liable to pay the service tax or not?6. While considering the present issue, the relevant statutoryprovisions under the Finance Act, 1994 are required to be referred to, which are as under:“Section 65. Definitions – In this Chapter, unless the contextotherwise requires: -xxx xxx xxx xxx xxx(31)“consulting engineer” means any professionally qualifiedengineer or an engineering firm who, either directly or indirectly, renders any advice, consultancy or technical assistance in anymanner to a client in one or more disciplines of engineering; ABCDEFGH13xxx xxx xxx xxx xxx(105)“taxable service” means any service provided {or to beprovided)xxx xxx xxx xxx xxx(g)to a client, by a consulting engineer in relation to advice, consultancy or technical assistance in any manner in one ormore disciplines of engineering including the discipline ofcomputer hardware engineering but excluding the discipline ofcomputer software engineering; xxx xxx xxx xxx xxxExplanation – For the purposes of this section, taxable serviceincludes any taxable service provided or to be provided by anunincorporated association or body of persons to a memberthereof, for cash, deferred payment or any other valuableconsideration. Charge of service tax. Section 66.There shall be levied a tax (hereinafter referredto as the service tax) at the rate of twelve per cent of thevalue of taxable services referred to in sub-clauses ……ofclause (105) of section 65 and collected in such manner asmay be prescribed.xxx xxx xxx xxx xxxPayment of service taxSection 68 (1) Every person providing taxable service to anyperson shall pay service tax at the rate specified in section 66in such manner and within such period as may be prescribed.(2) Notwithstanding anything contained in sub-section (1), inrespect of any taxable service notified by the CentralGovernment in the Official Gazette, the service tax thereonshall be paid by such person and in such manner as may beprescribed at the rate specified in section 66 and all theprovisions of this Chapter shall apply to such person as if he isthe person liable for paying the service tax in relation to suchservice.COMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH14SUPREME COURT REPORTS[2022] 17 S.C.R.Registration. Section 69 (1) Every person liable to pay the service tax underthis Chapter or the rules made thereunder shall, within suchtime and in such manner and in such form as may be prescribed, make an application for registration to the Superintendent ofCentral Excise.(2) The Central Government may, by notification in the OfficialGazette, specify such other person or class of persons, whoshall make an application for registration within such time andin such manner and in such form as may be prescribed. Furnishing of returns. Section 70 (1) Every person liable to pay the service tax shallhimself assess the tax due on the services provided by him andshall furnish to the Superintendent of Central Excise a returnin such form and in such manner and at such frequency andwith such late fee not exceeding two thousand rupees, fordelayed furnishing of return, as may be prescribed.(2) The person or class of persons notified under sub-section(2) of section 69, shall furnish to the Superintendent of CentralExcise, a return in such form and in such manner and at suchfrequency as may be prescribed.”6.1 Definition of “consulting engineer” under Section 65(31), postamendment 2005, reads as under:“Section 65(31)“consulting engineer” means anyprofessionally qualified engineer or any body corporate or anyother firm who, either directly or indirectly, renders any service, consultancy or technical assistance in any manner to a clientin one or more disciplines of engineering”6.2 Before it is considered, the effect of the amendmentincorporating the words “any body corporate”, post 2005, we have toconsider whether the original definition of “consulting engineer” underthe Finance Act, 1994 may include “any body corporate” or not.7. Under the Finance Act, 1994, the definition of “consultingengineer” in Section 65(31) covers services provided to a client by aprofessionally qualified engineer or an engineering firm consisting of ABCDEFGH15professionally qualified engineers. The taxable attribute is that the servicesmust be rendered in a professional capacity.7.1 From the relevant provisions under the Finance Act, 1994,referred to hereinabove, “taxable service” means any service providedor to be provided. Under the relevant provisions of Finance Act, 1994, atmany places, the word used is “person”. For example, as per Section 68,every “person” providing taxable service to any “person” shall pay servicetax. Section 69 provides that every “person” liable to pay the servicetax….may make an application for registration. In Section 70 also, thewords used are”every person liable to pay the service tax…”8. If the submission on behalf of the respondent is accepted, inthat case, it would remove all companies providing technical services, advice or consultancy to their clients from the service tax net, while anysuch services rendered by an individual or a partnership firm wouldcontinue to remain taxable. That does not seem to be an intention on thepart of the legislature to exclude the “body corporate” from the definitionof “consulting engineer”. There does not seem to be any logic to exclude“body corporate” from the definition of “consulting engineer”. If thesubmission on behalf of the respondent is accepted and the “bodycorporate” is excluded from the service tax, in that case, it would notonly lead to absurdity but also would create two different classes providingthe same services. That cannot be the intention of the legislature tocreate two separate classes providing the same services and to excludeone class.8.1 In the case of K.P. Varghese (supra), it is observed and heldby this Court that the statutory provision must be so construed, if possible, that absurdity and mischief may be avoided.8.2 In the case of Commissioner of Income Tax, Bangalore v.J.H. Gotla, Yadagiri, (1985) 4 SCC 343, this Court has observed andheld in paragraph 46 as under:“46. Where the plain literal interpretation of a statutoryprovision produces a manifestly unjust result which could neverhave been intended by the Legislature, the Court might modifythe language used by the Legislature so as to achieve theintention of the Legislature and produce a rational construction. The task of interpretation of a statutory provision is an attemptto discover the intention of the Legislature from the languageCOMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH16SUPREME COURT REPORTS[2022] 17 S.C.R.used. It is necessary to remember that language is at best animperfect instrument for the expression of human intention. Itis well to remember the warning administered by Judge LearnedHand that one should not make a fortress out of dictionary butremember that statutes always have some purpose or objectto accomplish and sympathetic and imaginative discovery isthe surest guide to their meaning.”8.3 In the case of Dilip Kumar and Company (supra), aConstitution Bench of this Court observed and held as under:“i) In interpreting a taxing statute, equitable considerations areentirely out of place; ii) a taxing statute cannot be interpreted on any presumption orassumption; iii) a taxing statute has to be interpreted in the light of what isclearly expressed; iv) it cannot imply anything which is not expressed; It is further observed and held that:v) the “plain meaning rule” suggests that when the language inthe statute is plain and unambiguous, the court has to read andunderstand the plain language as such, and there is no scope forany interpretation; vi) the principle of literal interpretation and the principle of strictinterpretation are sometimes used interchangeably, however, thisprinciple, may not be sustainable in all contexts and situations; vii) though all cases of literal interpretation would involve strictrule of interpretation, but the strict rule may not necessarily involvethe former, especially in the area of taxation; viii) while interpreting a statutory law, if any doubt arises as to themeaning to be assigned to a word or a phrase or a clause used inan enactment and such word, phrase or clause is not specificallydefined, it is legitimate and indeed mandatory to fall back on theGeneral Clauses Act; ix) An Act of Parliament/Legislature cannot foresee all types ofsituations and all types of consequences. It is for the court to see ABCDEFGH17whether a particular case falls within the broad principles of lawenacted by the Legislature;x) In all the Acts and Regulations, made either by Parliament orLegislature, the words and phrases as defined in the GeneralClauses Act and the principles of interpretation laid down in theGeneral Clauses Act are to be necessarily kept in view; xi) the purpose of interpretation is essentially to know the intentionof the Legislature. Whether the Legislature intended to apply thelaw in a given case; whether the Legislature intended to excludeoperation of law in a given case; whether the Legislature intendedto give discretion to enforcing authority or to adjudicating agencyto apply the law, are essentially questions to which answers canbe sought only by knowing the intention of the legislation; xii) a statute must be construed according to the intention of theLegislature and the courts should act upon the true intention ofthe legislation while applying law and while interpreting law. If astatutory provision is open to more than one meaning, the Courthas to choose the interpretation which represents the intention ofthe Legislature; xiii) if the plain language results in absurdity, the court is entitledto determine the meaning of the word in the context in which it isused keeping in view the legislative purpose. Not only that, if theplain construction leads to anomaly and absurdity, the court havingregard to the hardship and consequences that flow from such aprovision can even explain the true intention of the legislation; andxiv) the principle that in case of ambiguity, a taxing statute shouldbe construed in favour of the assessee does not apply to theconstruction of an exception or an exempting provision, they haveto be construed strictly. A person invoking an exception or anexemption provision to relieve him of the tax liability must establishclearly that he is covered by the said provision. In case of doubtor ambiguity, benefit of it must go to the State.”9. Applying the law laid down by this Court in the aforesaiddecisions on law of interpretation of a taxing statute, it is required to beconsidered, whether a “body corporate” was excluded from the servicetax net under the Finance Act, 1994.COMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH18SUPREME COURT REPORTS[2022] 17 S.C.R.10. At this stage, it is required to be noted that prior to amendment2005, by Circular/Trade Notice dated 4.7.1997, the definition of “consultingengineer” under the Finance Act, 1994 was specifically explained andas per the said Trade Notice, “consulting engineer” means anyprofessionally qualified engineer or engineering firm who, either directlyor indirectly, venders any advice, consultancy or technical assistance inany manner to a client in one or more disciplines of engineering. It alsofurther clarified that “consulting engineer” shall include self-employedprofessionally qualified engineer who may or may not have employedothers to assist him or it could an engineering firm – whether organisedas a sole proprietorship – partnership, a private or a Public Ltd. company. From the aforesaid, it can be seen that it was never the intentionof the legislation to exclude a “body corporate” from the definition of“consulting engineer” and from the “service tax net”.10.1 At this stage, it is required to be noted that during the FinanceAct, 1994 regime and prior to amendment 2005, the definition of“consulting engineer” applicable under the Finance Act, 1994 fell forconsideration before the High Courts of Karnataka and Calcutta in thecases of TCS (supra) and M.N. Dastur (supra). In both the aforesaidcases, the respective High Courts had an occasion to consider in detailthe definition of the term “consulting engineer”.10.2 In the case of TCS (supra), it was the case on behalf of theTCS that it was not liable to either recover or deposit any tax as it wasnot providing a taxable service within the meaning of Section 65(41) ofChapter V of the Finance Act, as amended from time to time. It wascontended that service provided by a consulting engineer in relation toadvice, consultancy or technical assistance in any discipline of engineeringwas taxable only if such services were provided by a consulting engineeras defined in Section 65(31) of the Finance Act. According to the TCS,service provided by a company even when it may have engaged qualifiedengineers to carry on or promote its business would not tantamount to ataxable service within the meaning of the Finance Act so as to justifyany demand on the basis thereof. After analysing the entire scheme ofthe service tax liability imposed by the Finance Act, 1994, it is observedand held in paragraphs 6 to 11 as under:“6. It is evident from a conspectus of the provisions referredto above that the taxable event is the providing of service with ABCDEFGH19the levy falling on the provider. It is also evident that the liabilityto pay is not confined to only individuals. The levy falls on‘every person’ providing the service. The expression ‘everyperson’ in turn is wide enough to include a Companyincorporated under the Companies Act. Suffice it to say thatthe Scheme of the Act envisages a tax on such services ashave for purposes of the levy been described as taxable. It isfor purposes of levy and collection of the tax immaterial whetherthe provider of the service is an individual or a juristic personlike an incorporated Company. Thus far there is no difficulty. What according to the petitioner makes the allimportantdifference is the definition of the expressions “consultingengineer” and “taxable service” as provided by Section 65(13)and Section 65(48) of the Act. The same may at this stage beextracted for ready reference.“Section 65(13): “consulting engineer” means any professionallyqualified engineer or an engineering firm who, either directlyor indirectly, renders any advice, consultancy or technicalassistance in any manner to a client in one or more disciplinesof engineering.”“Section 65(48): “taxable service” means any serviceprovided-(g) to a client, by a consulting engineer in relation to advice, consultancy or technical assistance in any manner in one ormore disciplines of engineering.”7. The argument is that a service provided by a technicallyqualified person in regard to advice, consultancy or technicalassistance in one or more disciplines of engineering is taxableonly if the same is provided either by an individual, who is aprofessionally qualified engineer or by an engineering firm. Anyservice provided by a Company even when based on the adviceof professionally qualified engineers is not a taxable service soas to attract the levy under the Act. Since the petitioner-Company is neither an individual nor a partnership concern, any service provided by it even when the same may relate toany discipline of engineering and be based on the opinion ofqualified engineers engaged by it cannot be regarded as ataxable service. The argument is nodoubt attractive thoughCOMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH20SUPREME COURT REPORTS[2022] 17 S.C.R.not equally sound. The reasons are not far to seek. The questionin essence is whether the Scheme of the Act makes anydistinction between services rendered or provided by individualsand partnership concerns on the one hand and incorporatedcompanies on the other. The answer has to be in the negative.As noticed earlier, the Act aims at levying a tax on the servicesdeclared taxable regardless whether the same are provided bya natural or a juristic person. There is no distinction under theAct between the provider of a service, who is an individual, apartnership concern or an incorporated company. The liabilityto pay tax on the service provided falls uniformly on all thethree, provided the service is of a kind that has been declaredtaxable under Section 65(48) of the Act. Viewed thus, what istaxed by the Act in the case of service provided by consultantengineers is the service provided directly or indirectly in thenature of advice, consultancy or technical assistance in anymanner and relating to any disciplines of engineering. The factthat the service is provided by an individual or a partnership orby a Company is wholly inconsequential. It is true that inclusionof in the definition of the expression “consulting engineer” couldinclude a Company to set the entire controversy at rest, butthe very fact that a Company providing a technical assistancein any engineering discipline is not specifically included in thedefinition of the expression “consulting engineer” would notipso facto mean that service rendered by any such Companycannot be considered to be taxable. It is fairly well settled thatwhere the language of a statute in its ordinary meaning leadsto a manifest anomaly or contradiction, the Court is entitled toput upon it a construction which modifies the meaning of thewords used in the same. The decision of the Supreme Courtin Tirath Singh v. Bachittar Singh (AIR 1955 SC 830), wherethe Court made the following observations is apposite: —“Where the language of a statute, in its ordinary meaningand grammatical construction, leads to a manifestcontradiction of the apparent purpose of the enactment, orto some inconvenience or absurdity, hardship or injustice, presumable not intended, a construction may be put upon itwhich modifies the meaning of the words, and even thestructure of the sentence.” ABCDEFGH218. Reference may also be made to the decision of the SupremeCourt in Commissioner of Income Tax, Bangalore v. J.H.Gotla(AIR 1985 SC 1698), wherein their lordships declaredthat a plain interpretation of the statutory provision produces amanifestly unjust result, which could never have been intendedby the legislature, the Court may modify the language: —“Where the plain literal interpretation of a statutory provisionproduces a manifestly unjust result which could never havebeen intended by the legislature, the Court might modifythe language used by the legislature so as to achieve theintention of the legislature and produce a rationalconstruction. The task of interpretation of a statutoryprovision is an attempt to discover the intention of theLegislature from the language used. It is necessary toremember that language is at best an imperfect instrumentfor the expression of human intention. Section 16(3) of theAct has to be read in conjunction with Section 24(2) for thepurpose in question. If the purpose of a particular provisionis easily discernible from the whole scheme of the Act whichin this case is, to counteract, the effect of the transfer ofassets so far as computation of income of the assessee isconcerned then bearing that purpose in mind, the intentionmust be found out from the language used by the Legislatureand if strict literal construction leads to an absurd result i.e.result not intended to be subserved by the object of thelegislation then if other construction is possible apart formstrict literal construction then that construction should bepreferred to the strict literal construction. Though equityand taxation are often strangers, attempts should be madethat these do not remain always so and if a constructionresults in equity rather than in injustice, then suchconstruction should be preferred to the literal construction.”9. Reference may also be made to the decision of the SupremeCourt in Nagpur Electric Light and Power CompanyLimited v. K. Shreepathirao(AIR 1958 SC 658), where theCourt declared that even a definition clause in an enactmentmust derive its meaning from the context or subject.COMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH22SUPREME COURT REPORTS[2022] 17 S.C.R.10. In Motipur Zamindari Company Limited v. State of Biharand Another (AIR 1953 SC 320), the Court held that therewas no justification to differentiate between a company andan individual and that there was nothing in the statute beinginterpretedCourt in that case, which would prevent the inclusionof the Company. The Court was in that case interpreting theterm “proprietor” as defined by Section 2(O) of Bihar LandReforms Act. It held that in view of the object of the BiharLand Reforms Act, there was no reason to differentiatebetween an individual proprietor and a company which ownsestates or tenures.11. The position is no different in the instant case. There is, inmy opinion, nothing repugnant in the subject or context of theAct, which should prevent the inclusion of a Company forpurposes of levy of service tax on any advice, consultancy ortechnical assistance provided by it to its clients in regard toone or more disciplines of engineering. Indeed, if the argumentadvanced on behalf of the petitioner is accepted, it would removeall companies providing technical services, advice or consultancyto their clients from the tax net while any such services renderedby an individual or a partnership concern would continue toremain taxable. The Act does not, in my opinion, envisagesany such classification let alone create and perpetuate anomaliesthat would flow from the same. The view taken by theAdditional Commissioner of Central Excise that the petitioner-Company was liable to pay service tax cannot therefore befound fault with.”10.3 A similar controversy arose before the Calcutta High Courtin the case of M.N. Dastur (supra). The Calcutta High Court in thesaid case was also considering the service tax law under the FinanceAct, 1994 regime. The question before the Calcutta High Court was asto whether the expression “engineering firm” used in the definition of“consulting engineer” in Section 65(31) of the Finance Act, 1994, ChapterV, relating to service tax includes a company. The aforesaid issue had been considered in detail by the HighCourt after considering the entire scheme of the service tax and theobject of the Act including the taxable even etc. and ultimately heldagainst the petitioner and it was held that the petitioner in that case being ABCDEFGH23a “company” was subjected to service tax law under the Finance Act,1994. The relevant discussion, observations and the findings recordedby the High Court in paragraphs 8 to 30 are as under:“Consulting engineer: Whether includes a company:8. The definition of “consulting engineer” admittedly has notused identical expression used in defining the other assesseesliable to pay service tax. Apart from the definition of “consultingengineer” in section 65(13), in all other cases, the expression“person” or “concern” or “commercial concern” has been used. Admittedly, a different expression has been used in defining“consulting engineer”7. It could not have been contended, andrightly, that the Legislature had made a distinction consciouslyand by reason of such distinction, it had intended differently. Afiscal statute has to be construed strictly, if something is notsubject to levy of tax clearly expressed in the statute, the samecannot be brought within the tax net by way of interpretationas was held in A.V. Fernandez, [1957] 8 STC 561 (SC). It is asettled proposition that it is the clear words of law and not theintention of the Legislature, which is to be examined to find outwhat the taxing statute has clearly said. There is no room forintendment. There is no equity about a tax. There is nopresumption as to tax. Nothing is to be read in, nothing is to beimplied. Only the language used is to be looked at fairly as waslaid down in Orissa State Warehousing Corporation, [1999]237 ITR 589 (SC) quoting from Cape BrandySyndicate v. IRC, [1921] 1 KB 64 and also in CIT v. AjaxProducts Ltd., [1965] 55 ITR 741 (SC). At the same time, asheld in C.A. Abraham, [1961] 41 ITR 425 (SC), the courtcannot proceed to make good the deficiency, if there be any. The court must interpret the statute as it stands. In the case ofdoubt, the interpretation favourable to the taxpayer is to beadopted. At the same time, in the case of absurdity the courtcan make good the deficiency, remove the absurdity andinterpret the statute according to its objects and purposes.9. The word “firm” cannot include a company. The name of apartnership firm is a compendious method of describing thepartners in a partnership firm as was laid down in Mrs. BachaF. Guzdar, [1955] 27 ITR 1 (SC), Dulichand Laxminarayan, COMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH24SUPREME COURT REPORTS[2022] 17 S.C.R.[1956] 29 ITR 535 (SC) and Malabar Fisheries Co., [1979]120 ITR 49 (SC). It is distinct from a company, a juristic persondistinct from its shareholders; whereas a partnership firmcomprises the partners and has no separate entity or existencewithout the partners. According to section 4 of the PartnershipAct, 1932, a “firm” means persons entering into partnershipwith another collectively called a firm, a compendious methodof describing the partners in a partnership. The partners ownabsolute interest in the partnership firm and its assets andproperties. The partners and the partnership firm are not distinctand separate entities and are identified with each other. Whereas a company is a juristic person, a distinct and separateentity other than its shareholders. The shareholders by reasonof their holding of shares do not hold any interest in the assetsand properties of the company. The shareholders’ interest isconfined to the profits and gains of the company; it does notextend beyond the interest to receive dividends or liability tothe proportion of his shareholding. A shareholder cannot claimany interest in the property of the company. It was so heldin Mrs. Bacha F. Guzdar, [1955] 27 ITR 1 (SC).10. In Vazir Sultan Tobacco Co Ltd., [1981] 132 ITR 559,the Supreme Court had made a distinction between the companyand a firm, which is to be understood in the light of the definitiongiven in section 4 of the Indian Partnership Act. There is nodoubt about the legal proposition. But each case has to beconsidered according to its own merits having, regard to thefacts and circumstances of the case. So far as the decisionin Vazir Sultan Tobacco Co. Ltd., [1981] 132 ITR 559 (SC)is concerned, it was dealing with the expression “reserve” asdefined in the Companies (Profits) Surtax Act, 1964. Theprovisions contained therein were distinct and different fromthe provisions with which we are concerned. In the context ofthe said 1964 Act, the Supreme Court was considering theexpression with reference to the Companies Act holding thatthe expression not defined in the 1964 Act is to be understoodby reference to the expression used under the Companies Act,1956. Therefore, this decision will not help us in order tointerpret the expression “firm” used in the definition of“consulting engineer” in the Finance Act, 1994. ABCDEFGH2511. Keeping the above settled principles of law in mind, wemay now proceed to find out as to whether the expression“firm” used in section 65(13) is to be understood differently. Section 65: The definitions: Scheme and context:12. In order to ascertain the Situation/the principles ofinterpretation have to be followed. The court in order toconstrue the definition comprehensively may apply the goldenrule of interpretation according to the ordinary grammaticalmeaning having regard to the scheme of the definitions and inthe context of the provisions contained in the statute and theobject and purpose for which it was enacted. It is apparentthat the expressions “person”, “concern” or “commercialconcern” have been used to define all other assessees liable topay service tax except section 65(13) defining “consultingengineer”. The word “person” as defined in section 3(42) ofthe General Clauses Act includes an individual, a company oran association of persons. A “person” includes a juristic person.A company is a juristic person and there would be no difficultyto include a company when the definition uses the expression“person”. Similarly, a “concern” without any qualification caninclude any business or professional establishment and the“commercial concern” would include all concerns connectedwith commerce carrying on trade or profession or any kind ofcommercial activities and includes a company.13. In the present case, section 65(13) includes an individualprofessionally qualified as an engineer. This does not seem tobe disputed. The definition also includes an engineering firm. According to Dr. Pal, though qualified by the word“engineering”, a “firm” is to be understood something distinctfrom the company. According to him, it clearly means apartnership firm. It may be proprietorship firm but in any eventit would be an association of qualified engineers without losingits entity or identity of being a qualified engineer either as anindividual or as a partner in the partnership firm or as a personin an association of persons without losing its identity otherthan a compendious mode of describing themselves withoutresulting into an entity different from the firm as it would be inthe case of a company in relation to its shareholders.COMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH26SUPREME COURT REPORTS[2022] 17 S.C.R.14. Therefore, if the definition does not clearly include acompany in view of the principles on which the fiscal statute isinterpreted, a company cannot be brought within the taxing netand when there is some doubt, the benefit would be availableto the assessee, the taxpayer. Admittedly, the court whileinterpreting the provision cannot make good the deficiency; therefore, it is to be understood as it is.15. But, it appears that there is a fallacy hidden in the definitionunder section 65(13). The expression “firm” has not been usedindependent of its qualification. The engineers are definitelyindividuals or persons, but are not ordinary individuals orpersons. They are qualified engineers. Therefore, an individualqualified engineer may be a person and means a person aswell and include a person, who is a qualified engineer. But theexpression “person” may include a qualified engineer but thesaid expression is insufficient to identify a particular class ofpersons who are qualified engineers. Therefore, the expression“person” could not be used to define a “consulting engineer”when he is an individual or an association of persons orotherwise.16. The expressions “person”, “concern” or “commercialconcern” appear to have been used freely in its common andordinary meaning apposite to the particular class of assesseesubject to service tax. It does not seem to give any particularor specified meaning. These expressions have been used toidentify a class of assessee. It does not make any distinctioninter se within the particular class. The definition is intended toembrace the class of assessee subject to service tax. In noneof the definitions, it appears that any class within the class hadever been intended to be identified. Neither it appears that aclass within the class was made liable or was intended to beexcluded from the liability to pay service tax The context inwhich these definitions were given was intended to identify aparticular class of assessee liable to pay service tax.17. Therefore, when in none of the definitions there was anyattempt to identify a class within the class in order to makeliable or exempt from the liability, that particular class withinthe class from being subjected to service tax, it cannot be ABCDEFGH27conceived that the Legislature had attempted to make such adistinction in the definition of “consulting engineer” by creatinga class within the class for the purpose of exemption from theliability to pay service tax. When in all classes of assessees asdefined in section 65, the whole of the particular class fallingwithin the definition have been made liable, it would be whollyagainst the scheme, object and purpose of the legislation toexempt a particular class coming within the definition of“consulting engineer”. The definitions have been intended toidentify a particular class liable to pay service tax. There cannotbe any earthly reason to tax all coming within the particularclass except one within that class. Nothing seems to appearfrom the scheme and the context in which the legislation wasenacted to make a rational or intelligible differentia to exemptone class within the class.18. It is inconceivable that a consulting engineer as an individualor constituting a partnership firm or a proprietorship firm wouldbe liable to pay tax under the service tax laws, but the samepersons forming a company, a different juristic person, a distinctlegal entity apart from the shareholders, would be outside thetax net. We do not find any reason as to why a companyproviding “taxable service” as defined under section 65(48)(g)would not be a taxable service, when it would be so whenprovided by an individual qualified engineer or a proprietorshipor partnership firm of engineers. This seems to be little absurd. Sections 66 and 68 : The chargeability : The taxable event:19. Section 66 is the charging section. Under sub-section (3),service tax is levied at the rate of 5 per cent, of the value ofthe taxable service referred to in sub-clause (g) among othersenumerated in section 65(48) and collected in such manner asprescribed. Section 68 provides that every person providingtaxable service to any person shall pay service tax at the ratespecified in section 66 in such manner and within such periodas may be prescribed. That apart, by reason of sub-section (2)of section 68, any other taxable service on being notified bythe Central Government may also be liable to service tax inthe same manner as may be prescribed and the rate specifiedin section 66 subject to the provisions of Chapter V may applyCOMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH28SUPREME COURT REPORTS[2022] 17 S.C.R.to such person as if he is the person liable to pay the servicetax in relation to such taxable service.20. Therefore, section 65 cannot be read out of the contextand the scheme of the Act. It has to be read in consonancewith sections 66 and 68, namely, the charging section and theliability to pay. Rule 6 in sub-rule (1) provides that service taxon the value of the taxable service received during the calendarmonth shall be paid to the credit of the Central Government by25th day of the month immediately following. The proviso, however, carves out an exception in respect of the assessee, who is an individual or a proprietary firm or a partnership firm, who are supposed to pay on the 25th day of the monthimmediately following the quarter in which service tax in thevalue of taxable service is received.21. Admittedly, the word “firm” has not been defined in theAct. We are to give the ordinary grammatical meaning of theword “firm” in order to interpret the provisions of section 65(13).While ascertaining the meaning of the word “firm” intended tobe given by the Legislature, we may first look into the word ifused elsewhere in the statute in consonance with the taxingevent apparent from the scheme and gather the meaningtherefrom. In Nagpur Electric Light and Power Co.Ltd. v. K. Shreepathirao, [1958-59] 14 FJR 199; AIR 1958SC 658, the apex court declared that a definition clause in anenactment must derive its meaning from the context or subject.We find that the word “firm” has been used in section 81 whereit was explained in relation to imposition of penalty. It has beenused in rule 6 to make a distinction with regard to the mannerof payment. This use of the word “firm” in the statute and therules indicates how it is to be interpreted. It is the responsibilityof the court to interpret the word in a manner consonance withthe scheme and the object and its purpose as well as the differentexpressions used in the statute unless a different intention ofthe Legislature is apparent to impute a different meaning. Whilefixing the liability on account of breach of the provisions of thestatute, a company has been explained to include a partnershipfirm. According to the scheme of the Act, the tax is leviable onthe provider of taxable service. The providing of the taxable ABCDEFGH29service is taxable event. Under section 68, every personproviding taxable service is made liable to pay the tax. Thus, itappears that the Legislature had never intended to make anydistinction between a firm and a company for the purpose ofdefining “consulting engineer”. If for the purpose of penalty, itcan be so, then it would also be so in relation to chargeability.22. Any other interpretation would lead to absurdity, adeficiency supposed to be made good by the court whileinterpreting. If two views are possible, and one leads toabsurdity, the other possible view is to be accepted. Theprinciple of beneficial interpretation in favour of the assesseecannot come into play on the face of absurdity. The use of theword “firm” qualified by the word “engineering” was intendedto denote a conglomeration of engineers providing taxableservice in its ordinary, common and natural sense. The words“engineering firm” denote an establishment of engineersproviding taxable service defined under section 65(48)(g). TheLegislature had never used nor intended to use the word “firm”in its legal or technical sense.23. Words used in a statute dealing with matters relating tothe general public are presumed to have been used in theirpopular rather than narrow, legal or technical sense. Thedoctrine of loquitur ut vulgus, i.e., according to the commonunderstanding and acceptance of the terms, is to be applied inconstruing the words used in the statute dealing with mattersrelating to the public in general. If an Act is directed to dealingswith matters affecting everybody generally, the words usedhave the meaning attached to them in the common and ordinaryuse of language. It was so observed by Lord Esher M.R. atpage 119 in Unwin v. Hanson, [1891] 2 QB 115 (CA). Thatthe Income-tax Act and for that matter the Finance Act is ofgeneral application is beyond dispute. It is all the more sobecause the Finance Act is one consolidating and amendingthe law relating to income-tax, super tax, service tax, etc. Tosupport this proposition, we may derive inspiration from RaoBahadur Ravulu Subba Rao v. CIT, [1956] 30 ITR 163 (SC)at page 169. Therefore, the natural not the legal or technicalmeaning of the word “firm” is to be given.COMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH30SUPREME COURT REPORTS[2022] 17 S.C.R.Section 65(13): Firm: Natural meaning:24. Having read the provisions in the context it is used and thescheme in which it is intended to be used and the object andpurpose of enacting the statute and the absence of anyintelligible differentia or a rational classification, it has to beinterpreted to include all kinds of firm, i.e., a businessestablishment. This again we must note that the Legislaturehad used the expression “engineering firm”. The firm has beenqualified by the word “engineering”. Therefore, the word “firm”has been used in this particular class of assessee to include allclasses of firms dealing with engineering. The word “firm”was not used for the purpose of indicating the constitution ofthe firm, namely, a proprietorship or partnership, but in order toidentify a class of firm providing taxable service within themeaning of section 65(48)(g).25. In these circumstances, we do not think that there is anydeficiency in the definition of “consulting engineer”, which couldbe presumed to have excluded a company providing taxableservice defined under section 65(48)(g) when its counterpartscomprising an individual or a proprietorship or partnership firmor an association of person are included. From the scheme ofthe Act, we have not been able to find out any intelligibledifferentia or rational classification for excluding a companyproviding taxable service under section 65(48)(g) when itscounterparts being individuals or proprietorship or partnershipor association of persons are coming within the taxing netproviding the same service. This is further supported from thescheme of the 1994 Act. The Act aims at levying tax on service.It is the taxable service, which makes the provider liable. Thus, the taxable event is the providing of service and the levy fallson the provider. It would be inconceivable that the Legislaturehad intended that the levy would fall on a provider when anindividual or a proprietorship or partnership firm but not whena company. The distinction seems to be unintelligible and withoutany rationale, thus absurd. Under section 68 the liability is ofevery person. In support of this proposition, we may gainfullyrefer to the decision in Motipur Zamindari Co. Ltd. v. Stateof Bihar, AIR 1953 SC 320, where the court held that there ABCDEFGH31was no justification to differentiate between a company andan individual and that there was nothing in the statute beinginterpreted by the court in that case, which would prevent theinclusion of the company. The court was in that caseinterpreting the term “proprietor” as defined by section 2(o) ofthe Bihar Land Reforms Act. It held that in view of the objectof the Bihar Land Reforms Act, there was no reason todifferentiate between an individual proprietor and a company, which owns estates or tenures.26. The object of the Act is of general application, and notintended to confer any special benefit to a company. Thedefinition of all other assessees includes company, then it isnot known why the Legislature would intend to exclude acompany providing a particular class of taxable service fallingwithin section 65(48)(g). Though eloquently argued by Dr. Pal, the rationale between the differentiation having regard to theexpression “firm” imposing liability to the whole class to exempta class within the class is not intelligible and does not at allmake out a case of rational classification to interpret the saiddefinition otherwise than in consonance with the definition givento all other class read together with sections 66 and 68 havingregard to the object and purpose of the enactment. When thestatute is not a statute aimed at conferring certain specialtreatment for protecting the interest of a company, such aninterpretation is not possible. Therefore, though for differentreason, we are in agreement with the decision of the learnedsingle judge since appealed against.27. To support our view, we may borrow the reasoning fromthe decision of the Karnataka High Court in Tata ConsultancyServices, [2002] 257 ITR 710, relying on the decisions in TirathSingh v. Bachittar Singh, AIR 1955 SC 830 and CIT v. J.H.Gotla, [1985] 156 ITR 323; (1985) 4 SCC 343 : AIR 1985 SC1698 to support its view, as quoted hereafter (page 715):“There is no distinction under the Ad between the provider ofa service, who is an individual, a partnership concern or anincorporated company. The liability to pay tax on the serviceprovided falls uniformly on all the three, provided the service isof a kind that has been declared taxable under section 65(48)COMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH32SUPREME COURT REPORTS[2022] 17 S.C.R.of the Ad. Viewed thus, what is taxed by the Act in the case ofservice provided by consultant engineers is the service provideddirectly or indirectly in the nature of advice, consultancy ortechnical assistance in any manner and relating to any disciplinesof engineering. The fad that the service is provided by anindividual or a partnership or by a company is whollyinconsequential. It is true that inclusion in the definition of theexpression ‘consulting engineer’ could indude a company toset the entire controversy at rest, but the very fad that acompany providing a technical assistance in any engineeringdiscipline is not specifically included in the definition of theexpression ‘consulting engineer’ would not, ipso facto, meanthat service rendered by any such company cannot beconsidered to be taxable. It is fairly well-settled that where thelanguage of a statute in its ordinary meaning leads to a manifestanomaly or contradiction, the court is entitled to put upon it aconstruction which modifies the meaning of the words used inthe same.28. The decision in Dr. V. Shanmughavel, [2001] 131 ELT 14(Mad) may not help us much since in that case the distinctionwas sought to be made as to whether the services rendered bya valuer or by an engineer would come within the definition of“consulting engineer” or not. Though some other decisions havesince been cited by Dr. Pal, but we do not find any reason todiscuss the same, since, in our view, any further discussionwould be superfluous. Conclusion:29. Thus, the circular dated July 2, 1997, issued by the Ministryof Finance and the said circular dated July 3, 1997, cannot beheld to be contrary to the provisions of the statute orinconsistent with the scheme and the context of the servicetax law or repugnant to the clear legislative provisions defining“consulting engineer” under section 65(13). Having regard tothe discussion made above, it cannot be said that the said circularwas issued in excess of the parameters limited by the legislationdelegating the power. It is well within the parameters and, therefore, can never be ultra vires the parent Act or void. Therefore, the ratio decided in G.S. Dali and Flour Mills, ABCDEFGH33[1991] 187 ITR 478 (SC) cannot be attracted. Since it is wellwithin the enactment, it is not a case that a tax is being imposedby reason of the said two circulars on the company though notliable through subordinate legislation without being authorisedby the parent Act as was held in Gopal Narain, AIR 1964 SC370.30. From the discussion above, we are of the view that theword “firm” used in the definition of “consulting engineer”interpreted in the context and the scheme of section 65 inconsonance with section 66 and section 68 and the meaningconferred to the word “firm” elsewhere in the statute includesa company as explained in section 81 since there is nothing tosupport an intelligible differentia or a rational classificationbetween a company and a firm providing taxable service definedunder section 65(48)(g) to exclude a company from the taxnet when both providing the same taxable service being thetaxable event in a statute, which is not meant for providingspecial provisions for or benefit to a company.”10.4 At this stage, it is required to be noted that all the decisions ofsome of the High Courts relied upon on behalf of the respondent are ofpost amendment 2005. In none of the cases, the respective High Courtshad an occasion to consider the actual meaning and definition of“consulting engineer” contained in Finance Act, 1994, which directly fellfor consideration before the Karnataka and Calcutta High Courts in thecases of TCS (supra)and M.N. Dastur (supra).11. As observed hereinabove, in many places under the FinanceAct, 1994, the Parliament/Legislature has used the word “person”(Sections 68, 69 and 70). At this stage, Section 3(42) of the GeneralClauses Act, 1897 is also required to be referred to, considered andapplied. The word “person” includes any company or association orbody of individuals, whether incorporated or not. Therefore, there is nologic and/or reason to exclude a” body corporate” from the definition of“consulting engineer” and to exclude the services of a “consultingengineer” rendered by a “body corporate” to exclude and/or exemptfrom the service tax net. Such an interpretation would lead to anomalyand absurdity. As observed hereinabove, it will create two differentclasses providing the same services which could not be the intention ofthe Parliament/Legislature. Therefore, we are in complete agreementCOMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.] ABCDEFGH34SUPREME COURT REPORTS[2022] 17 S.C.R.with the view taken by the High Court of Karnataka in the case of TCS(supra) and the Calcutta High Court in the case of M.N. Dastur (supra),taking the view that a “firm” and a” company” can be said to be a“consulting engineer” as defined under the Finance Act, 1994 and liableto pay the service tax as a service provider.12. In view of our above finding that under the Finance Act, 1994,in the definition of “consulting engineer”, a “body corporate” is includedand/or to be read into so as to bring a “body corporate” being a serviceprovider providing the consultancy engineering services within the servicetax net, as such, it is not necessary to consider whether the subsequentamendment amending the definition of “consulting engineer” by way of2005 amendment adding a “body corporate” within the definition of“consulting engineer” would be retrospective and/or whether it can besaid to be a clarificatory in nature or not and the said issue would becomeacademic now.13. In view of our discussion and for the reasons stated above, the impugned judgment and order dated 04.12.2015 passed by theCESTAT is unsustainable. It is held that the respondent, being a serviceprovider providing consultancy engineering services, was/is liable to paythe service tax for such services being “consulting engineer” within thedefinition of Section 65(31) of the Finance Act, 1994 and therefore andthereby liable to pay the service tax under Section 66 r/w Section 68 ofthe Finance Act, 1994. The impugned judgment and order dated04.12.2015 passed by the CESTAT in Appeal No. ST/136/2007 is herebyquashed and set aside. However, from the impugned judgment and orderpassed by the CESTAT, it appears that the CESTAT has consideredonly one issue namely whether for the period pre 01.05.2006 – the FinanceBill, 2006 whether “body corporate” was covered within the definitionof “consulting engineer” under Section 65 (31) of the Finance Act, 1994and had not considered any other issues/grounds raised in theMemo ofAppeal before the CESTAT. Therefore, the matter is remanded to theCESTAT to examine and decide the appeal on other grounds, if any, raised in the Appeal Memo before it afresh in accordance with law andon its own merits and in light of the observations made hereinabove andthe law laid down by this Court in the present judgment and order. Theaforesaid exercise shall be completed by the learned CESTAT within aperiod of three months from the date of receipt of the present order, ABCDEFGH35which shall be produced by the Revenue before the learned CESTATwithin a period of four weeks from today without fail.14. The present appeal is accordingly allowed to the aforesaidextent. However, in the facts and circumstances of the case, there shallbe no order as to costs. Devika Gujral and Amarendra KumarAppeal partly allowed.(Assisted by : Pragya Samal, LCRA)COMMISSIONER OF CENTRAL EXCISE, RAIPUR v. M/S SEPCOELECTRIC POWER CONST. CORP. [M. R. SHAH, J.]