Page 108 - GSTL_26th March 2020_Vol 34_Part 4

618 GST LAW TIMES [ Vol. 34
upon completion of the auction, the sales consideration is received not by the
sellers but by IFAB. Thereafter, IFAB will make payments to the growers for the
flowers supplied to them after deduction of the commission. The payments are
made to the growers/sellers on the day following the end of the calendar week.
IFAB themselves issue delivery orders which enables the buyers to take delivery
of the flowers from the auction house. They do the billing work and collection of
sale proceeds on behalf of their clients. IFAB also invests a great deal in the sys-
tem of sale through the clock. They offer dealers sophisticated facilities for online
buying - remote buying. With the help of such services, IFAB is able to attract an
increasing number of international buyers to the auction. It therefore appears to
reason that this wide gamut of activities of IFAB would go far beyond the scope
of a commission agent since the services rendered by them are not restricted only
to sale of goods on behalf of the sellers for consideration, which is the main edi-
fice of the definition of commission agent. We are of the view that the activities
of the respondent company - IFAB are more appropriately classifiable as ‘Auc-
tioneer service’.
20. As regards the eligibility to the exemption under Sl. No. 54(g) of
Notf. No. 12/2017-C.T. (R), dated 28-6-2017, it is seen that the exemption is avail-
able to the services provided by a commission agent for sale or purchase of agri-
cultural produce. The respondent company have argued that the words ‘auc-
tioneer’ and ‘commission agent’ are interchangeable and the reference to ‘com-
mission agent’ in entry Sl. No. 54(g) of Notf. No. 12/2017-C.T. (R) can include
even an auctioneer. We are not impressed by this argument. It is trite law that
exemption notifications are to be strictly interpreted. A notification has to be in-
terpreted in the light of the words employed by it and not on any other basis. In
the case of entry Sl. No. 54(g) of Notf. No. 12/2017-C.T. (R), the exemption given
is to the APMC or Board or commission agent. As mentioned by us earlier, a
commission agent and an auctioneer are no doubt mercantile agents but the
functions performed by them are vastly different. The services provided by IFAB
fall within the ambit of Auctioneer service and not that of a commission agent. If
the notification is read treating some words as surplus, the result would be to
hold that exemption is available to all mercantile agents who sell or purchase
agricultural produce. This is to almost re-write the notification according to one’s
own purposes ignoring the intention of the Legislature. If the Legislature meant
to grant exemption on an extended scale so as to include all agents, it would
have stated so in plain terms. Further, this is not a case where intention is re-
quired to be ascertained through interpretation. The Notification, as it is worded,
grants exemption to the services provided by a commission agent. Even if the
absence of a definition of “commission agent” in the notification or in the GST
statute causes some ambiguity, the notification’s applicability to a particular class
of service providers is to be arrived at by a strict construction and the benefit
must go to the State. Viewed from this principle, it is clear that the respondent
company - IFAB is not eligible for the exemption under Entry 54(g) of Notifica-
tion No. 12/2017-C.T. (R).
21. The Appellant has also contended that the respondent company -
IFAB does not deal with ‘agricultural produce’ as defined in para 2(d) of the Ex-
planation to the Notification No. 12/2017-C.T. (R), dated 28-6-2017 for the reason
that the respondents are not traders or wholesalers in the primary market. We
however, are not inclined to dwell on this aspect since we have already held that
the respondent company- IFAB by virtue of providing Auctioneer service is not

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