Page 170 - GSTL_26th March 2020_Vol 34_Part 4

680 GST LAW TIMES [ Vol. 34
not on hiring of cabs. This position was also confirmed by the
Hon’ble Uttarakhand High Court in the case of Sachin Mal-
hotra (supra) followed in R.S. Travels v. CCE, Meerut, 2008 (12)
S.T.R. 27 and Bharat Travels Co. Ltd. v. CST, Ahmedabad, 2010
(20) S.T.R. 646. Therefore, inasmuch as the Ld. Advance Rul-
ing Authority ignored the decision of the High court which is
squarely applicable to the present case, without assigning any
reason, the same is liable to be set aside.
(q) The Ld. Advance Ruling Authority has erroneously relied
upon the decision of Gujarat High Court in the case of Com-
missioner of Service Tax v. Vijay Travel, 2014 (36) S.T.R. 513
(Guj.) which has not yet attained finality as an appeal against
the said order is pending before Hon’ble Supreme Court and
the Supreme Court has granted leave and admitted the said
appeal [2016 (43) S.T.R. J172 (S.C.)].
(r) The Ld. Advance Ruling Authority ought to have considered
that Section 17(5) is a non obstante clause to the enabling pro-
visions of granting input tax credit specified in Section 16(1)
of the Act. The entire rationale for granting input tax credit is
to avoid cascading effect of taxes on supply of goods or ser-
vices or both. Thus, reading of non obstante clause in Section
17 discloses that an exception has been made to beneficial
provisions of granting of input tax credit by specifying situa-
tions where such credit shall not be available to the registered
person. In this regard, it is a settled principle of law that pro-
visions which carve out an exception to a beneficial provision
ought to be read strictly and unless a particular activity or
goods or services specifically fall within exception, the benefit
of provisions should not be denied. In this regard, it is a set-
tled principle of law laid down in Mangalore Chemicals and
Fertilizers Ltd. v. Deputy Commissioner, 1991 (55) E.L.T. 437
(S.C.), Union of India v. Wood Papers Ltd. & Anr., 1990 (47)
E.L.T. 500 and Union of India v. Suksha International and Nutan
Gems, 1989 (39) E.L.T. 503 (S.C.), that the exceptions to any
beneficial provision have to be construed strictly and an in-
terpretation unduly restricting the scope of a beneficial provi-
sion is to be avoided so that it may not take away with one
hand what the policy gives with the other. Therefore, inas-
much as the Ld. Advance Ruling Authority failed to strictly
construe the exception under Section 17(5), the same is liable
to be set aside.
(s) The Ld. Advance Ruling Authority failed to consider the set-
tled legal principal there are two possible interpretation of a
tax provision, the one in favour of the assessee should be pre-
ferred. It is a settled principle in taxing statutes that in case
there are two interpretation, the one which casts a lesser bur-
den on the subject must be adopted. Accordingly, it is sub-
mitted that not only the definition of ‘rent’ or ‘cab’ must not
be expanded beyond what is contemplated, also that it is a
settled law that in case there are two interpretation, one in fa-
GST LAW TIMES  26th March 2020  266