In Brief
Agricultural Produce Market Committees in Rajasthan challenged service tax demands for renting/leasing shops and land to traders, claiming exemption under the 2006 Circular that exempts mandatory statutory activities performed by public authorities. The Supreme Court held that Section 9(2) of the 1961 Act uses permissive language ('may'), not mandatory language ('shall'), making such renting/leasing activities discretionary, not mandatory statutory duties. Therefore, the exemption under Circular No. 89/7/2006 did not apply, as that circular exempts only mandatory statutory activities. The Court dismissed the appeals, holding that exemption notifications must be strictly construed and all conditions must be fulfilled.
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