Read Time: 08 minutes

Synopsis

"In a given case, different classes of service providers may be rendering the same service to the same class of service recipients. That, per se, does not amount to discrimination", the Supreme Court held on Tuesday while dismissing a plea seeking removal of GST and Service Taxes on the Hajj services provided to Hajis of India in Saudi Arabia.

A question was posed before the top court in the plea by All India Haj Umrah Tour Organizer Associations, namely,

Whether Haj Committees under the 2002 Act, can be treated as a separate class?

While dealing with the question, Court noted that Article 14 does not prohibit the classification of persons or class of persons provided it is not arbitrary.

"The classification has to be reasonable. The classification is permissible provided it is founded on an intelligible differentia which must distinguish the persons grouped together from those who are left out. Moreover, the classification must have a rational nexus to the objects sought to be achieved by it", further observed a bench of Justices Khanwilkar, Oka and Ravikumar.

Furthermore, the bench opined that while it examined the infringement of Article 14, it must be remembered that only on the ground that both Haj Group Organizers (HGOs) and the Haj Committee render service to the same class of persons, the classification made by treating the Haj Committee as a separate class, cannot be questioned.

Noting that HGOs were tour operators carrying on business of arranging tours, the bench relied on Section 9 of the Haj Committee Act, 2002 (‘the 2002 Act’), to opine that the functions of the Haj Committee are not confined only to making arrangements for enabling the pilgrims to undertake the Haj pilgrimage.

"Its first duty is to collect and disseminate the information useful to the pilgrims and to arrange orientation and training programmes for the pilgrims. It is the duty of the Haj Committee to give relief to pilgrims and visitors. It is its duty to generally look after the welfare of the pilgrims. The Haj Committee has an important duty to assist the pilgrims in distress. One of the duties is to finalize the Annual Haj Plan with the approval of the Central Government and to execute the same. The Haj Committee is under an obligation to publish proceedings of the Committee...", the bench noted.

Court further remarked that the Haj Committees are statutory bodies working under the control and supervision of the Government.

The Haj Committees are the agencies and instrumentalities of the State. Apart from arranging visits of Haj pilgrims for the purposes of Haj pilgrimage, there are important statutory duties assigned to the Haj Committee, the three-judge bench said.

Distinguishing between the Haj Committees and the HGO's Court said that when the Haj Committee facilitates the Haj pilgrims by making arrangements for their visit to the Kingdom of Saudi Arabia for undertaking the Haj pilgrimage, there is a complete absence of profit motive.

On the other hand, there are no onerous duties attached to HGOs, the top court found.

"They earn profit by rendering service to Haj pilgrims. Except for the stringent conditions for the registration, the Government has no control over HGOs...", Court opined.

The top court thus held that the Haj Committee thus constitutes a class in itself when it comes to rendering service to Haj pilgrims.

"There is an intelligible differentia for this classification. The object of exemption in paragraph 5A of the Mega Exemption Notification is to promote the activity of the specified organisations of rendering service for the religious pilgrimage.....the service rendered by the specified organisations to the devotees is not with the object of making profit. Therefore, there is a nexus between the classification made and the object sought to be achieved by granting exemptions", the Court concluded.

Case Title: All India Haj Umrah Tour Organizer Association Mumbai Vs. Union of India & Ors.