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Accordingly, even though service tax exemption has not been specifically provided under the Finance Act vis a vis to transactions undertaken by ADB & IFC, that position, being contrary to the specific tax exemption accorded under the ADB Act and the IFC Act, would thus stand overridden by the ADB Act and the IFC Act.
(iv) It is further urged that the powers of the Parliament to levy Service Tax admittedly arise Entry 97 & 92 C of List 1, Seventh Schedule of the Constitution of India read with Article 246. However, the powers of the Parliament under Article 253 are wide and the non-obstante clause at the beginning of the article, leaves no room for any doubt that such power, any legislation enacted under Article 253 would and can override any legislation enacted in exercise of power under Article 246. Basis this inherent power, Agreement Establishing the Asian Development Bank which was signed by the Government of India in Manila, Philippines, 2-4 December 1965 (the Agreement) and the International Finance Corporation Articles of Agreement, 1958, which was signed by the Government of India in Washington DC, the Parliament had legislated the ADB Act and the IFC Act for implementing the said agreements. Consequently, the Finance Act, 1994 which has been enacted by the Parliament by virtue of power bestowed under Article 246 has been overridden by Section 3 and Section 5 of the IFC and ADB Act by the Parliament while exercising its power under Article 252.

Accordingly, notwithstanding the fact that the Finance Act, 1994 does not provide any exemption from service tax qua transactions undertaken by ADB and IFC, exemption from the said tax can still be available within the tenets of the ADB Act and the IFC Act in view of the express language provided in Section 3 (1) read with Section 9 of the IFC Act and Section 5(1) read with Article 56 of the ADB Act. Reliance was placed on decision of the Honble Supreme Court in the case of Maganbhai Ishwarbhai Patel etc v UOI, 1970 (3) SCC 400 on the aspect that powers conferred on the Parliament under Article 253 is an exception to powers under Article 246.