In Brief
Two civil appeals challenged High Court orders exempting educational institutions (IIT Patna and NIT Rourkela) from service tax on construction services. The key issue was whether these institutions qualify as "governmental authorities" under the Service Tax Exemption Notification. The Supreme Court held that the amended definition of "governmental authority" contains two independent, disjunctive categories: bodies set up by Act of Parliament (without 90% equity condition) and government-established bodies (with 90% equity condition). Using grammatical analysis—the word "or" denotes alternatives, and the semicolon after the first category—the Court concluded IIT Patna and NIT Rourkela qualify under the first category as statutory bodies and are entitled to exemption. The appeals were dismissed, upholding the High Court judgments.
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