Commissioner vs Doon Institute of Information and Technology (P.) Ltd.

Barin Ghosh, C.J.—We are concerned about the tax obligation of the respondent for the period subsequent to 30th June, 2004. Respondent claimed exemption in the matter of payment of service tax, but that was denied by the assessing officer. Therefore, the appellant went before the appellate authority. The appellate authority also denied the same to him. The appellant then approached the Tribunal. Before the Tribunal, the appellant contended that it imparted training to students in computer related matters and, in respect thereof, it has paid the tax. It submitted that, in addition thereto, it trained students for the purpose of establishing them in their life and, accordingly, they are entitled to the exemption on the footing that they were vocational training institute. Therefore, the short question was, whether the respondent was or was not a vocational training institute during the relevant time in relation to those students, who were imparted training for establishing them in their life. The Tribunal held in favour of the respondent that it imparted vocational training and declared it to be a computer training institute providing vocational training and, accordingly, would become a vocational training institute. Despite having had done so, the Tribunal held that since the notification dated September 10, 2004 did not deal with computer training institute until June 16, 2005, until then, the computer training institute will get the benefit of the exemption as was provided by the 2003 notification. In the notification of June 20, 2003, by which exemption was given to vocational training institutes as well as to the computer training institutes, it was specifically mentioned that vocational training institute shall mean a commercial training or coaching centre, which provides vocational coaching or training that impart skills to enable the trainee to seek employment or undertake self-employment directly after such training or coaching and, at the same time, provided that computer training institute shall mean a commercial training or coaching centre, which provides coaching or training relating to computer software or hardware. The notification, therefore, made clear, what is a vocational training institute and what is a computer training institute. The important distinction, that was made, was that a computer training institute shall be such institute, which provides coaching or training relating to computer software or hardware. It contemplated training related to computer software or hardware and not pertaining to imparting of skills to enable the trainee to seek employment or undertake self-employment directly after such training or coaching as was provided for a vocational training institute. Therefore, even if by being trained in computer software or hardware, the person is capable of seeking employment or undertaking self-employment, inasmuch as the training is in computer software or hardware, it will not come within vocational training institutes as the notification made specific distinction between vocational training institutes and the computer training institutes by giving definitions thereof in the notification dated June 20, 2003. Therefore, we are of the view that the Tribunal was wrong in holding that, inasmuch as training in computer software and hardware imparted to the trainees enables the trainees to seek employment or to undertake self-employment, the trainer, namely, the respondent is a vocational training institute and not a computer training institute as was provided in the notification dated June 20, 2003. The fact remains that the benefit of the exemption accorded by the notification dated June 20, 2003 was available up to February 29, 2004 and thereafter the same was extended up to June 30, 2004 by the notification dated February 4, 2006. Therefore, the benefit of the notification, available to the computer training institutes in terms of the notification dated June 20, 2003, came to an end on June 30, 2004.

On September 10, 2004, when the original Notification No. 24/2004-Service Tax was notified, thereby, vocational training institutes and recreational training institutes were accorded exemption, but not the computer training institutes. Computer training institutes, therefore, could not be covered by the exemption accorded by the notification dated September 10, 2004. September 10, 2004 notification is an independent notification. The same did not refer to any earlier notification. Therefore, in the matter of interpreting the notification dated September 10, 2004, one has to read only the words used in that notification and cannot borrow any words from any other notification. By this notification, there is no dispute that exemption was accorded to vocational training institutes. Vocational training institutes had been defined by the notification. It said that a vocational training institute shall mean a commercial training or coaching centre, which provides vocational training or coaching that imparts skill to enable the trainee to seek employment or undertake self-employment directly after such training or coaching. In absence of statutory definition, we have to proceed on the basis of the ordinary meaning of the word "vocational", which means "relating to an occupation or employment; directed at a particular occupation and its skills". It cannot be questioned that skill pertaining to computer software and hardware is required to be acquired and, at the same time, it cannot be disputed that once such a skill is acquired, it throws open the door of an occupation relating to computer software and hardware, which entails employment or self-employment. Inasmuch as nothing was mentioned in the notification dated September 10, 2004 as regards computer training institutes, it cannot be said that the September 10, 2004 notification made any distinction in between a vocational training institute and a computer training institute, as was made on June 20, 2003. In that background, we find that the Tribunal cannot be said to have erred by holding out that the respondent-assessee was a vocational training institute, but we make it clear that it was so in terms of the notification dated September 10, 2004 until June 16, 2005, i.e., when the concept of computer training institute was introduced for the first time in the notification dated September 10, 2004. Having had said so, we find no scope of interference. The appeal fails and the same is dismissed.