D.K.Seth,J. - (1.) The short question raised by Dr. Pal in this appeal is as to whether the expression 'engineering firm' used in the definition of consulting engineer in Section 65(13) of the Finance Act, 1994, Chapter V relating to service tax includes a company.
(2.) Dr. Pal pointed out from the definitions defined in Section 65 that, while defining various categories of assessees liable to pay service tax under the Finance Act, 1994, Chapter V, the legislature has employed the expression 'person', 'concern' or 'commercial concern' except in Section 65(13) while defining 'consulting engineer'. Whereas in the definition of 'consulting engineer', the legislature had employed the expression 'firm', which is distinct and different from the expression used in the other definitions. By reason thereof, the legislature had consistently expressed its intention to treat consulting engineer differently from the other categories of assessees liable to pay service tax. Unless the legislature had a different intention to treat consulting engineer differently, it would not have employed different expression. It could have employed the same expression used in the other definitions substituting the word 'firm' by the word 'concern' or 'commercial concern', as the case may be. In the absence of definition of the word 'firm' alike the term 'person' either in the service tax laws or in the Central Excise Act, the term 'person' can be construed to mean a person as defined in Section 2(42) of the General Clauses Act, 1897, which includes any company, association, BOI whether incorporated or not, whereas the word 'firm' has to be understood according to the general concept of law, which does not include a company. Company and firm being two distinct legal concepts, one cannot mean the other unless so specified under the relevant Act. This is apparent from Section 81 of the Finance Act, 1994, wherein the Explanation was appended to include a firm within the expression 'company'. Without this Explanation the firm cannot include a company nor a company include a firm. (1) Relying on A.V. Fernandez v. State of Kerala, Dr. Pal contended that in construing a fiscal statute determining the liability of a subject to tax, one must have regard to the strict letter of the law and not merely to the spirit of the statute or substance of law. Referring to Orissa State Warehousing Corporation v. CIT, quoting from Cape Brandy Syndicate v. IRC (1921) 1 KB 64 and CIT v. Ajax Products Ltd., Dr. Pal submitted that one has to look at the clear words of law and not at the intention of the legislature. In a taxing statute, one has to look merely as what is clearly said. There is no room for any intendment. There is no equity about tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used. Dr. Pal cited C.A. Abraham v. ITO and Anr., to contend that in interpreting a fiscal statute, the Court cannot proceed to make good the deficiencies, if there be any, the Court must interpret the statute as it stands. Incase of doubt, the one favourable to the taxpayer is to be accepted. (2) According to Dr. Pal, the scheme of the definitions given in Section 65 of the Service Tax Law clearly indicates that the legislature had made a distinction between a 'firm' and a 'company', which is also a well-settled distinction in legal parlance. This definition is also apparent from Rule 6(1) of the Service-tax Rules, 1994, to which our attention was drawn by Dr. Pal, where also a distinction was made between a 'firm' and a 'company'. Therefore, according to Dr. Pal, the firm since not been defined in Finance Act, 1994, or in the Central Excise and Salt Act, 1944, the definition of the word 'firm' as defined in Section 4 of the Indian Partnership Act, 1932, is to be adopted, namely, a firm is a compendious method of describing the partners in a partnership. Whereas a company is incorporated under the Companies Act and is a separate juristic person distinct from its shareholders, which is reiterated in Mrs. Bacha F. Guzdar v. CIT. Having placed reliance on Dulichand Laxmi Narayan v. CIT, Dr. Pal contended that a firm name is merely an expression, a compendious mode of designating the persons agreed to carry on business in partnership. This has since been reiterated in Malabar Fisheries Co. v. CIT, whereas a company defined under Section 3(1)(ii) of the Companies Act is distinct from its shareholders. The shareholders who buy the share do not buy an interest in the property of the company, which is a juristic person distinct from its shareholders. It only buys an interest in the profits and gains of the company as was held in Mrs. Bacha F. Guzdar (supra) whereas a firm can only mean a partnership firm. In the absence of any definition, it is to be understood in the light of the Indian Partnership Act, as was laid down in Vazir Sultan Tobacco Co. Ltd. v. CIT. (3) In these circumstances, the Circular No. 43/5/1997-TRU, dt. 2nd of July, 1997 issued by the Ministry of Finance and the Trade Circular dt. 3rd July, 1997, seeking to include company within the word 'firm' used in the definition of 'consulting engineer' is inconsistent with the scheme and context of the service tax law and are repugnant to the clear legislative provision defining 'consulting engineer', under Section 65(13) and as such the said circulars are ultra vires the provisions of the Finance Act, 1994, and without authority of law. The said circular having been issued by the executive, amounts to subordinate legislation. If a subordinate legislation crosses the limits of the parameters laid down by the delegating Act, such delegated legislation so much is outside the parameters and is ultra vires and void. A delegated legislation cannot go beyond nor be repugnant to the statute under which the delegation was made and it cannot extend beyond the scope or ambit of the parent Act as was held in State of MP and Anr. v. G.S. Dall & Flour Mills. What is not taxable under the Act, cannot be brought within the taxing-net by any by-law, rule or regulation unless the statute under which the subordinate legislation is made specifically authorizes the same, as was held in Gopal v. State of Bihar AIR 1964 SC 370. Therefore, the impugned notification and the trade notice are ultra vires, bad in law and void. Dr. Pal criticized the judgment of the learned Single Judge, which relied on the decision in Tata Consultancy Services v. Union of India and Anr. and Dr. V. Shanmughavel v. CCE 2001 (131) ELT 14 (Mad) on the conspectus of the expression 'every person' used in Section 68, namely, the levying section which includes company. This, according to Dr. Pal, is wholly misplaced since in conflict with the specific definition of 'consulting engineer' defined in Section 65(13), in which the legislature had avoided or omitted to use the expression 'any person' or 'concern' or 'commercial concern'.
(3.) Mr. Kalyan Bandopadhyay, learned counsel appearing on behalf of the Department, on the other hand, contended that the learned Single Judge had adopted the ratio decided in Tata Consultancy Services (supra) rightly. Relying on the said decision, Mr. Bandopadhyay had submitted that the word 'firm' was significantly used in the definition 'consulting engineer' not to make a distinction but for properly describing an engineering firm. According to him, the word 'firm' cannot remain confined only to a partnership firm in the absence of any express provision. He further contends that there is no earthly reason to make a distinction that a consulting engineer if he is an individual or a firm other than company would be liable to tax, but when it is a company, it would be exempted. Such a proposition seems to be preposterous. According to him, such an interpretation would lead to absurdity. When an interpretation leads to absurdity, the Court can make the deficiency and remove the absurdity and interpret the statute according to its objects and purposes.;