The 'person' is crucial in
taxability for the purpose of Service Tax. The definition of service in
section 65B(44) of the Finance Act, 1994 provides that 'service means
any activity carried out by a person for another for a consideration
…….'. This implies that service or activity shall be carried out by a
person for another person. Thus, two persons are required to carry out
any activity or transaction of service i.e., a service provider and a
service receiver. If a service is provided to self and no other person
is involved, it would not tantamount to service and shall, therefore,
not attract Service Tax.
Meaning of Person (Clause 37 of Section 65B)
“person” includes,--
(i) an individual,
(iv) a society,
(v) a limited liability partnership,
(vi) a firm,
(vii) an association of persons or body of individuals, whether incorporated or not,
(viii) Government,
(ix) a local authority, or
(x) every artificial juridical person, not falling within any of the preceding sub-clauses;
Clause 37 provides an inclusive definition of person which includes individuals, and certain specified types of entities/bodies etc. including government. The above list covers almost all types of entities and organisations as the residual entry covers the persons not covered in earlier specified types.
The
term ‘person’ would include all persons - natural and juristic, i.e.,
artificial persons created by an act of law such as hindu undivided
family, company, corporation, cooperative society, registered firm,
trust, government agencies etc, whether engaged in commercial activity
or not. The term ‘person’ was not defined in Finance Act, 1994 which
regulates the service tax, prior to Finance Act, 2012 amendment. Under
section 3(42) of General Clauses Act, person includes any company or
association or body of individuals, whether incorporated or not. Also, a
person is any being in existence, whom the law regards as capable of
rights and duties. Any such being shall be a person.
According to Black’s Dictionary, person means a human being, an entity (such as corporation that is recognised by law as having the rights and duties of a human being and living body of a human being).
According
to General Clauses Act, it means a legal entity that is recognised by
law as the subject of rights and duties, an individual.
The
word ‘person’ includes any company or association or body of persons,
whether incorporated or not. [Indian Panel Code, 1860 and General
Clauses Act,].
The word ‘person’ shall include a company or corporation. [Police Act, 1861].‘Person’ includes any association or body of persons, whether incorporated or not. [Carriers Act, 1865]
‘Person’ includes a Hindu Undivided Family [Income Tax Act, 1961]
‘Person’ does not include a body of persons. [Representation of the People Act, 1950]
‘Person’
means any individual or partnership or any public or private body,
whether corporate or not, including a state or any of its constituent
sub-divisions. [Merchant Shipping Act, 1958]‘Person’ includes-
(i) an individual,
(ii) a Hindu Undivided Family
(iii) a company
(iv) a firm
(v) an association of persons or body of individuals, whether incorporate or not,
(vi) a local authority, and
(vii) every artificial juridical person, not falling within any of the preceding sub-clauses.
[Income Tax Act]
‘Person’ includes-
(i) a firm whether registered or not(ii) a Hindu Undivided Family
(iii) a cooperative society
(iv) every other association of persons whether registered under the Societies Registration Act, 1860, or not. [Consumer Protection Act, 1986]
‘Person’ includes-
(i) an individual
(iii) a company
(iv) a firm,
(v) an association, of person or a body of individuals, whether incorporated or not, and
(vi)
every artificial juridical person, not falling within any of the
preceding sub-clauses, but does not include a local authority.
[Voluntary Deposits (Immunities and Exemptions) Act, 1991]
‘Person’ means-
(i) an individual who is a citizen of India
(ii) an association of individuals or body of individuals, whether incorporated or not, whose members are citizens of India
(iii) a company in which not less than fifty one per cent of the paid up share capital is held by the citizens of India, [Cable Television Networks (Regulation) Act, 1995]
‘Person’ includes-
(i) an individual
(iii) a company
(iv) a firm
(v) an association of persons or a body of individuals, whether incorporated or not
(vi) a local authority
(viii) assessee, as defined in Rules 2 of Central Excise Rules, 1944
(ix) exporter as defined in clause (20) of section 2 of the Customs Act, 1962
(x) importer as defined in clause (26) of section 2 of the Customs Act, 1962
‘Person’ includes -
(i) an individual
(ii) a Hindu Undivided Family
(iii) a company
(iv) a firm
(v) an association of persons or a body of individuals, whether incorporated or not, in India or outside India
(vi) any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956
(viii) a co-operative society registered under any law relating to co-operative societies
(ix) a local authority
(x) every artificial juridical person, not falling within any of the preceding sub-clauses. [Competition Act, 2002]
‘Person’ includes -
(i) an individual
(iii) a company
(iv) a firm
(vi) every artificial juridical person not falling within any of the preceding sub-clauses, and
(vii)
any agency, office or branch owned or controlled by any of the above
persons mentioned in the preceding sub-clauses; [Prevention of Money
Laundering Act, 2003]
So far as legal theory is concerned, a person is any being whom the law regards as capable of rights and duties. Any being that is so capable is a person, whether a human being or not, and no being that is not so capable is a person, even though he be a man. Persons are the substances of which rights and duties are the attributes. It is only in this respect that persons posses juridical significance, and this is the exclusive point of view from which personality receives legal recognition. [John Salmond, Jurisprudence 318 (Glanville L. Williams ed., 10th edition 1947)].
The
natural and obvious meaning of the expression ‘person’ is a living
human being, a man, woman or child, an individual of the human race. As
used in law the word includes natural persons and artificial persons
like corporations and point stock companies, but it does not include a
state or Government. [Shiv Prashad v. Punjab State, 1956 (9) TMI 57 -
PUNJAB & HARYANA HIGH COURT. (Constitution of India, Art. 14The
word, person means not duly a natural person, but also a jurisdic or
artificial person, Rahmat v. Mandir Shri Laxminiaram, AIR 1976 MP 216,
218. [Madhya Pradesh Land Revenue Code 1859].
The expression ‘person’ as defined in Section 3(42) of the General Clauses Act (10 of 1897) includes a company or association or body of individuals whether incorporated or not, but the expression ‘person’ cannot be detached from the context and viewed apart from the nature of the writs that are enumerated in the article. In Re v. S. Hariharan, 1959 (9) TMI 47 - ANDHRA PRADESH HIGH COURT. [General Clauses Act, 1897].
The
word ‘person’ as understood in its ordinary sense generally implies a
natural person and not a person artificial unless there is a provisions
made for it either expressly or by necessary implication. Nand Prasad v.
Arjun Prasad, 1958 (5) TMI 34 - HIGH COURT OF PATNA. [Companies Act,
1913].
‘Person’ includes a corporate body. The Collective Farming Society Ltd. v. State of MP, 1973 (10) TMI 52 - MADHYA PRADESH HIGH COURT. [Madhya Pradesh Co-op. Societies Act, 1961] a corporate body like a club registered under Societies Registration Act is a ‘person’ within the meaning of Section 3, Madras Gaming Act. In Re Somasundaram Chettiar, 1947 (8) TMI 1 - MADRAS HIGH COURT.
‘Person’
in the technical or legal sense can be a natural person like a human
being or an artificial person like the holder of an office or a
corporation. Jagneshwar Sen Gupta v. Bimal Kantipaul, 1960 (12) TMI 79 -
GAUHATI HIGH COURT (Tripura Municipal Act, 1349]
The
words ‘a person’ must be taken to include a group of persons who are in
joint possession. If two persons are in joint possession over twice the
maximum quantity prescribed, they become liable for contravention of
the order and they cannot set up the fiction of being in separate
possession of half the quantity each. Anil Kumar Samanta v. State, 1953
(2) TMI 37 - CALCUTTA HIGH COURT.
In
Jennifer Gregg and Mervyn Gregg v. CCE and C 1999 (9) TMI 943 -
EUROPEAN COURT OF JUSTICE where assessee, being a firm, had a nursing
home and applied for registration under Service tax law to claim input
credit, which was denied on ground that its activities were exempt, but
assessee argued that it was not a body/establishment, hence, exemption
allowable to body/establishment could not be allowed to it, it was held
that terms ‘body’, ‘establishment’ and ‘organisation’ were in principle
sufficiently broad to include natural persons as well. Exemptions
provided to ‘body’, ‘establishment’ and ‘organisation’ were applicable
not only to legal persons, but also to natural persons. Hence, it was
held that assessee was eligible for exemption and was not liable to
registration.
In Larsen and Toubro Ltd. v. CCE, Vadodara-II 2013 (12) TMI 492 - CESTAT AHMEDABAD, it was held that a ‘person’ is a juristic person. To become a person, person includes an association of person or body of individuals, whether incorporated or not. It cannot be said that the units in Special Economic Zones (SEZ) and domestic tariff area (DTA) are separate persons in the eyes of law and can be considered as separate persons.
an individual
a Hindu undivided family
a companya society
a limited liability partnership
a firm
an association or body of individuals, whether incorporated or not
Government (Central and State Governments, will be separate persons)
a local authority, orevery artificial juridical person, not falling within any of the preceding sub-clauses.
Services by Government
Most of the services provided by the Government or local authorities are in the negative list. Only those activities of Government or local authorities are taxed where they compete with private entities. The rationale is as follows-
to
provide a level playing field to private entities in these areas as
exemption to Government in such activities would lead to competitive
inequities; and
to avoid break in Cenvat chain as the support
services provided by Government are normally in the nature of
intermediary services.Since ‘Government’ has not been defined in the Act, the definition of ‘Government’ as contained in the General Clauses Act, 1897 would be applicable as per which ‘Government’ includes both State Government and Central Government. Further as per the General Clause Act 1897, State includes Union Territory.
‘Government’
would include various departments and offices of the Central or State
Government or the U.T. Administrations which carry out their functions
in the name and by order of the President of India or the Governor of a
State.
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