Supreme Court of India
ASSISTANT COMMR. (CT) LTU AND ANR.versusAMARA RAJA BATTERIES LTD.
- Citation
- 2009 INSC 954
- Decided
- 27 July 2009
- Disposal
- Disposed off
- Bench
- S B SINHA
Holding
G.O. No.108 is a self‑contained code and its term ‘base turnover’ means the turnover of the quantity of goods produced, so the exemption must be given a liberal construction and the High Court’s interpretation is affirmed.
Summary
The Supreme Court examined the interpretation of Government Order (G.O.) No.108 dated 20‑05‑1996, issued by the Government of Andhra Pradesh under its Target‑2000 industrial policy, which granted sales‑tax deferment/exemption to existing units expanding their capacity. The respondents, industrial units, claimed the benefit on the basis of the term “base turnover” defined in the G.O., while the assessing authority limited the benefit, leading to the High Court’s ruling that “base turnover” referred only to the quantity of production, not its monetary value. The appellants argued that G.O. No.108 must be read with earlier G.O.s and that the High Court erred. The Court held that G.O. No.108 is an independent, complete code, that “base turnover” means the turnover of the quantity of goods produced, and that exemption notifications must be given a liberal construction. Consequently, the Supreme Court affirmed the High Court’s interpretation and dismissed the appeals.
Issues considered
- Whether G.O. No.108 dated 20‑05‑1996 must be read in conjunction with earlier government orders.
- What is the proper meaning of the term “base turnover” under G.O. No.108.
- Whether the exemption notification should be construed liberally or strictly.
- Whether the High Court erred in interpreting the exemption provision.
- Whether the assessing authority could lawfully restrict the deferment benefit claimed by the respondents.
Legislation cited
- General Clauses Acts. 4-A(6)
Subjects
sales taxexemption notificationgovernment order interpretationbase turnoverindustrial policyTarget‑2000liberal constructionAndhra Pradeshtax defermentexpansion project
Judgment
[2009] 11 S.C.R. 953
~
ASSISTANT COMMR. (CT) LTU AND ANR. A
V.
AMARA RAJA BATTERIES LTD.
(Civil Appeal No. 4707 of 2009)
JULY 27, 2009
B
[S.B. SINHA AND CYRIAC JOSEPH, JJ.]
_..,
.. Sales Tax - Exemption notification - New industrial
policy - GOMs No.108 dated 20-05-1996 issued in
"modification" of all earlier orders - Interpretation of - Held: c
Exemption notification must be construed having regard to
the purpose and object it seeks to achieve - It should be.
.... construed liberally - In reading an exemption notification, no
condition should be read into it when there is none - If an
entrepreneur is entitled to benefit thereof, the same should D
~
+ not be denied - On facts, GOMs No.108 dated 20-05-1996
was totally independent and complete code by itself and it was
not necessary at all to refer to the earlier GOMs for its
construction or implementation - Although the word
'modification' may not be held to be expressly repealing the E
earlier notifications, the State intended to depart from the
conditions laid down in the earlier GOMs - Words and
Phrases - "modification" - Meaning of - Andhra Pradesh
General Sales Tax Act.
4 "· F
In order to encourage industrialization in the State,
the Government of Andhra Pradesh had been evolving
various incentive schemes from time to time. In
modification of all earlier orders, the Government of
Andhra Pradesh came up with a new industrial policy
called 'Target 2000' by way of GOMs No.108 dated G
,.. 20.05.1996, which was to take effect from 15.11.1995 to
" 31.03.2000. In terms of the said GOMs, certain existing
industrial units setting up expansion project became
953 H
954 SUPREME COURT REPORTS (2009] 11 S.C.R.
A eligible for sales tax deferral I exemption on enhanced
turnover above the "base turnover" which in turn was
defined to be the best "production achieved" during
three years preceding the year of expansion or the
"maximum capacity expected" to be achieved by the
B industr;, whichever is higher.
In terms of the said GOMs No.108 dated 20.05.1996,
the respondents claimed benefit of deferment on sales tax ,..
c
on production in their expanded units which were,
however, either rejected or restricted to a lesser amount
by the assessing authority under the Andhra Pradesh
General Sales Tax Act.
"
-
Writ applications were filed questioning the orders of
assessment, without availing the remedies available to
-
D the assessee under the Andhra Pradesh General Sales
Tax Act. By reason of the impugned judgment, the High ...
Court held that the term "base turnover" referred only to
the quantum of production and not the turnover thereof.
In appeals to this Court, it was contended that the
E
High Court committed a serious error insofar as it failed
to take into consideration that GOMs No. 108 was to be
read with other GOMs preceding thereto and that the
High Court should not have entertained petitions directly )
against the orders of assessment as the question as to
F whether the entrepreneurs had fulfilled the conditions laid •
down in the said GOMs or not were required to be
considered by the respective assessing authorities.
Interpretation of GO Ms No.108 dated 20.05. 1996 thus
G fell for consideration in the present appeals.
Disposing of the appeals, the Court +-
HELD: 1.1. The Government adopted the new
industrial policy Target-2000 in order to accelerate
H
ASSISTANT COMMR. (CT) LTU AND ANR. v. AMARA 955
RAJA BATIERIES LTD.
industrial development in the State. The respondents had A
expanded their projects pursuant to or in furtherance of
the said policy decision. The period for which the said
policy was to remain operative was between 15.11.1995
and 31.03.2000. It was, therefore, valid for a fixed period.
[Paras 17 and 19) [964-E; 964-G] B
1.2. As the period in question has a direct nexus with
the scheme, it wo'uld not be correct to contend that the
said policy decision should be read with earlier policy
decisions. Reference to the earlier policy decision has C
nothing to do with the new scheme introduced by the
Government. They have been referred to only for the
purpose of tracing the history and to lay emphasis on the
fact that the Government of Andhra Pradesh had from
time to time issued appropriate notifications with a view
to implement its liberalized State Incentive Schemes as D
also the industrial policy statement issued in the year
1992. Had the intention of the Government of Andhra
Pradesh been to continue with the old schemes, only the
period therefor could have been extended from time to
time. It was not necessary for it to issue notification E
introducing the new scheme. [Para 19] [964-H; 965-A-B;
964-C-D]
1.3. The said notification indisputably was issued in
modification of all the earlier orders. The State advisedly F
used the word 'modification'. When the said GOMs No.
108 was issued, some of the earlier notifications might be
in force. There cannot, however, be any doubt
whatsoever that the said .GOMs is totally an independent
one and a complete .code by itself and in th~t view of the G
matter, it is not necessary at all to refer fo the earlier
GOMs for the purpose of either its construction or
implementation. Although the word 'modification' may not
be held to be expressly repealing the earlier notifications,
the State intended to depart from the conditions laid down H
956 SUPREME COURT REPORTS [2009] 11 .).C.R.
A in the earlier GOMs. [Paras 19, 20 and 28) [965-D; 965-F-
G; 965-H; 971-8)
1.4. The notification used the words 'production
achieved' and 'maximum capacity expected to be
achieved'. It did not use the word 'turnover'. It did not
8
provide that the amount of sales tax paid in the earlier
years will have any relevance for the purpose of
enforcement of the scheme. The said GOMs does not
refer to maintenance of local sales. If the condition of local
sale had not been incorporated in the GOMs, no case has
C been made out for incorporating the same by reference
or otherwise. The term 'base turnover', therefore, refers
to the turnover of the quantity in goods and not its
monetary value. 'Base turnover' was defined differently
from that of the earlier definitions given in various earlier
D orders which clearly discloses the intention on the part
of the government. If what was provided in the earlier
government orders were to be followed, nothing
prevented the State to adopt the same. [Paras 21, 22 and
28) [966-8-C; 966-D]
E
1.5. An exemption notification should be given a
literary meaning. Recourse to other principles or canons
of interpretation of statute should be resorted to only in
the event the same give rise to anomaly or absurdity. The
F exemption notification must be construed having regard ...
to the purpose and object it seeks to achieve. The
Government sought for increase in industrial
development in the State. Such a benevolent act on the
part of the State, unless there exists any statutory
interdict, should be given full effect. The exemption
G notification should be construed liberally once it is found
that the entrepreneur fulfills all the eligibility criteria. In
reading an exemption notification, no condition should •
be read into it when there is none. If an entrepreneur is
entitled to the benefit thereof, the same should not be
H
ASSISTANT COMMR. (CT) LTU AND ANR. v. AMARA 957
RAJA BATIERIES LTD.
denied. [Paras 23 and 25] [966-F-H] A
1.6. Even in equity, the State cannot be ~~rmitted to
alter its stand as pursuant to or in furtherance of the
representation made by it the entrepreneurs had not
collected tax from its consumers to which they were B
otherwise entitled to. [Para 29] [971-C-D]
Vadilal Chemicals Ltd. v. State of A.P. and Others (2005)
-¥' 6 SCC 292; lnnamuri Gopalan and Others v. State of Andhra
"' Pradesh and Anr. (1964) 2 SCR 888; Hansraj Gordhandas
v. H.H. Dave, Assistant Collector of Central Excise and c
Customs, Surat and Others AIR 1970 SC 755; Parle
Biscuits (P) Ltd. v. State of Bihar and Others (2005) 9 SCC
669; Commissioner of Sales Tax v. Industrial Coal
Enterprises (1999) 2 SCC 607; Commissioner, Trade Tax,
U.P. v. DSM Group of Industries (2005) 1 SCC 657; Mis. G.P. D
_.,.. Ceramics Pvt. Ltd. v. Commissioner, Trade Tax, UP.(2009)
2 SCC 90; AP. Steel Re-Rolling Mill Ltd. v. State of Kera/a
and Others (2007) 2 SCC 725; State of Orissa v. Tata Sponge
Iron Ltd. (2007) 8 SCC 189 and Commissioner of Trade Tax,
U.P. v. Modipan Fibres Co. (2006) 6 sec 577, relied on. E
2. The Appellant also is not correct in contending that
in a situation of this nature, the High Court should not
have entertained the writ applications directly from the
-
"\ orders of assessment. [Para 30] [971-D]
Case Law Reference:
F
(2005) 6 sec 292 relied on Para 23
(1964) 2 SCR 888 relied on Para 24
G
AIR (1970) SC 755 relied on Para 24
•\ (2005) 9 sec 669 relied on Para 24
(1992) 2 sec 607 relied on Para 25
H
958 SUPREME COURT REPORTS [2009] 1·· S.C.R.
A (2005) 1 sec 657 relied on Para 26
(2009) 2 sec 90 relied on Para 26
(2007) 2 sec 725 relied on Para 26
B (2007) s sec 1a9 relied on Para 26
(2006) 6 sec 577 relied on Para 27
CIVIL APPELLATE JURISDICTION : Civil Appeal No. ~
4707 of 2009. ...
c From the Judgment & Order dated 30.11.2005 of the High
Court of Andhra Pradesh at Hyderabad in Writ Petition Nos.
22569 of 2005.
WITH
D
C.A. Nos. 4708, 4709, 4710, 4711, 4712, 4713, 4714 of 2009. ...
I. Venkatanarayanan, Manoj Saxena, Rajneesh Kr. Singh,
Rahul Shukla, T.V. George, T. Anamika, A. Chandramohan, P.
Mohan Rao for the Appellants.
E
T.L.V. Iyer, S. Ganesh, A.V. Rangam, Buddy A.
Rangadhan, G. N. Reddy, V.B. Joshi, Kailash Pandey, K.V.
Vishwanathan, Shally Bhasin Maheshwari, Rishi Maheshwari,
Akhil Anand, Megha Mukherjee for the Respondents. )I
F .
The Judgment of the Court was delivered by
S.B. SINHA, J. 1. Leave granted.
2. Interpretation of GOMs No. 108 dated 20.05.1996 falls
G for our consideration in this batch of appeals which are being
disposed of by this common judgment.
3. Respondents are owners of various industries.
..
Indisputably, the Government of Andhra Pradesh in order to
H
ASSISTANT COMMR. (CT) LTU AND ANR. v. AMARA 959
RAJA BATTERIES LTD. [S.B. SINHA, J.]
-yi. encourage industrialization in the entire State had been A
evolving various schemes in terms whereof incentives were to
be provided to the entrepreneurs not only for the establishment
of new units but also expansion thereof. Such incentives were
being granted in various forms such as subsidy, deferment/ tax
holiday, rebate in electricity charges, interest subsidy, etc. B
For the aforementioned purpose, government orders were
being issued from time to time since 1989. By reason of
.~
... GO Ms No. 498 dated 16.10.1989, the government provided
investment subsidy at various rates depending upon the
backwardness of different districts of the State apart from
c
granting deferment/ tax holiday on sales tax.
4. The said GOMs No. 498 dated 16.10.1989 was
followed by the GOMs No. 117 dated 17.03.1993 which was
operative from 3.10.1992 to 31.03.1997. D
+
5. Another GOMs No. 386 dated 26.09.1994 was issued
by way of amendment to GOMs No. 117 dated 17.03.1993 on
representations made by various entrepreneurs in terms
whereof benefits were sought to be conferred on expansion/ E
modernization. In the said GOMs various terms were defined
including the term "base turnover" which is to the following effect:
"Base Turnover : the best production achieved during three
• -· years preceding the year of expansion or the maximum
capacity expected to be achieved by the Industry as per F
the appraisal made by the Financial Institution before
funding the project, whichever is higher."
6. Thereafter, GOMs No. 75 dated 14.03.1996 was issued
by way of a clarification; the relevant portion whereof reads as G
under:
-t_
"After careful examination of the matter, Government
hereby clarify that "tax deferral would be only on the amount
of tax payable on additional local sales over and above
H
960 SUPREME COURT REPORTS (2009) 11 S.C.R.
A the previous level of local sales before expansion. In case
the local sales after expansion is less than or equal to the
previous level, the actual tax liability."
7. The Government of Andhra Pradesh came up with a
new industrial policy called 'Target 2000' by way of GOMs No.
8
108 dated 20.05.1996. In this GOMs issued for enforcing the
said policy, all other GOMs were mentioned except GOMs No.
75 dated 14.03.1996. Apart from the grant of subsidy upto 20%
of the fixed capital not exceeding Rs. 20,00,000/-, tax holiday ..
was declared for a period of seven years and deferment of tax
C for a period of fourteen years, apart from other benefits
specified therein.
8. We may notice some provisions of GOMs No. 108
dated 20. 05.1996 which are as under:
D
"4. After careful review and examination of the package
of incentives and all the other connected factors, in
modification of all the earlier orders, Government have
decided to introduce a New Industrial Policy called
"TARGET-2000" in order to acceletate Industrial
E
Development of the State and issued it
*** *** ***
7.00 Expansion projects:-
F
Existing industrial units, in eligible areas, setting up
expansion project in products other than ttiose listed in
Annexure, involving enhancement of lixed capital
investment by at least 25% as well as enhancement of
capacity by 25% for the products of the same product-line,
G will be eligible for sales tax deferral or sales tax exemption
for the enhanced turnover above the base turnover as
defined for a period of 14 years or 7 years respectively,
subject to a ceiling of 135% of additional fixed capital
investment made, from the date of commencement of
H commercial production by the expansion project. Base
ASSISTANT COMMR. (CT) LTU AND ANR. v. AMARA 961
RAJA BATIERIES LTD. [S.B. SINHA, J.]
~-
turnover for this purpose shall be the b-est production A
achieved during three years preceding the year of
expansion or the maximum capacity expected to be
achieved by the industry as per the appraisal made by the
financial institution before funding the project, whichever is
earlier. The same limits and conditions as specified in B
para 6.03 and 6.05 above will apply.
*** *** ***
_..·'"'
16.00. The decisions of the State Level Committee shall
be final in scrutinizing and deciding the eligible investment c
and sanctioning the incentives for eligible industries.
*** *** ***
18.00. These orders shall take effect from 15.11.1995 and
D
-i- will be in force up to 31.03.2000."
9. Indisputably, in terms of the said GOMs No. 108 dated
20.05.1996, the respondents herein applied for and was
granted eligibility certificate on their project for expansion of
their factory as a result whereof the benefit of deferment on sales E
tax to the extent of 13.5% of the capital investment made by
them was conferred. It is also not in dispute that the
respondents thereafter claimed the benefit of deferment on
.. "" sales tax payable by them on their production in their expanded
units which were, however, either rejected or restricted to a F
lesser amount while passing the orders of assessment by the
assessing officers under the Andhra Pradesh General Sales
Tax Act.
10. Some matters were taken to the Sales Tax Appellate
G
Tribunal. By reason of a judgment and order dated 27.09.2003,
-\ the Tribunal held:
"For the all the above reason, we hold that for availing the
benefit of deferment of tax under the Eligibility Certificate
granted to the appellant by the industries department, the H
962 SUPREME COURT REPORTS (2009] 11 S.C.R.
A appellant has to satisfy not only the achievement of base
production as per G.O. Ms. No.108 but has to achieve the
previous level of local sales under APGST Act. In this case,
there is no dispute that the appellant achieved base
production by the cut off date 11.2.98 and also the level
B of previous local sales of t~e base year under APGST Act
in as much as previous level as stated by the Dy.
Commissioner is Rs.8,79,98,708/- whereas according to
Dy. Commissioner himself the APGST Act paid the "'...
appellant upto out off date during the assessment year
c 1997-98 is Rs.9,02, 10, 115/- which is more than the tax
paid under APGDT Act during he base year and therefore
the appellant is entitled to avail deferment from 12.2.98
onwards which is rightly granted by the assessing authority
and the Dy. Commissioner erred in holding that the
appellant should also achieve the previous level of sales
D
under CST Act for the purpose of availing deferment ..,
benefit and therefore we come to the conclusion that the
revision made by the Dy. Commissioner is not justified in
the facts and circumstances and the same is not valid and
legal and therefore not sustainable and liable to be set
E aside by allowing the TA."
11. Several writ applications were filed thereagainst. Some
of the writ applications were filed questioning the orders of
assessment, without availing the remedies available to the "' ..
F assessee under the Andhra Pradesh General Sales Tax Act.
12. By reason of the impugned judgment, the High Court
opined that the definition of the term "base turnover". referred
only to the quantum of production and not the turnover thereof
and hence the Tribunal's judgment to that effect was held to be
G
erroneous.
13. Mr. I. Venkatanarayanan, learned senior counsel
..
appearing on behalf of the State, would urge:
H (i) The High Court committed a serious error insofar
ASSISTANT COMMR. (CT) LTU AND ANR. v. AMARA 963
RAJA BATIERIES LTD. [S.B. SINHA, J.]
as it failed to take into consideration that GOMs No. A
108 was to be read with other GOMs preceding
thereto.
(ii) The High Court should not have entertained
petitions directly against the orders of assessment
B
as the question as to whether the entrepreneurs had
fulfilled the conditions laid down in the said GOMs
or not were required to be considered by the
--1• respective as~essing authorities.
~
14. Mr. T.L.V. Iyer, Mr. S. Ganesh, learned senior counsel, c
· Mr. K.V. Vishwanathan and Mrs. Shally Bhasin Maheshwari,
learned counsel appearing on behalf of the respondents, on the
other hand, urged:
(i) The exemption notification having been valid for a D
period of five years, the conditions'laid down
;.- therefor must be read literally keeping in view the
terminologies used in paragraph 7 only. The
principle of interpretation adopted by the High
Court should be accepted as the GOMs refers to
E
the quantity and/ or capacity and not the turnover.
(ii) GOMs No. 108 should be read literally and not
along with other GOMs as the former was issued
~
. in modification of the earlier ones as even in some
cases the State had issued the eligibility F
certificates in quantitative terms which would clearly
go to show that even the authorities of the State had
read the GOMs in that way. A different'stand taken
by them in that regard at a later stage has rightly
been rejected by the High Court. G
(iii) The word "modification" would amount to an
'
~ express repeal and/ or must be held to be issued
in departure from the earlier GOMs. By reason of
the GOMs No. 108 as exemption from payment of
H
964 SUPREME COURT REPORTS [2009) 11 S.C.R.
A tax had been granted on the condition that the
respondents would not collect the same from the
consumers and the said condition having been
complied with, even in equity, this Court should not
interfere with the impugned order in exercise of its
B jurisdiction under Article 136 of the Constitution of
India.
15. GOMs No. 108 dated 20.05.1996 referred to the
earlier GOMs, which are 18 in number, except GOMs No. 75,
·~
c
only for the purpose of tracing the history thereof. Indisputably, ,.
the said Government Orders had been issued by the
Government having regard to the liberalized state incentive
schemes for setting up of new industries and/or expansion
thereof.
D 16. A new industrial policy statement was issued in the
year 1992. Pursuant to or in furtherance of the said industrial
policy statement, various government orders were issued from ~
31.03.1993 to 21.11.1995.
17. It is in the aforementioned backdrop of events, the
E
Government adopted a new industrial policy called 'Target
2000'. The said policy was adopted in order to accelerate
industrial development in the State.
18. The scheme for grant of the said incentive and/ or
F deferment or exemption from payment of sales tax was granted ..
not only to the new industries but also to those entrepreneurs
who had got expansion projects prepared.
19. Indisputably, the respondents had expanded their
G projects pursuant to or in furtherance of the said policy decision.
The period for which the said policy was to remain operative
was between 15.11.1995 and 31.03.2000. It was, therefore,
valid for a fixed period. ~
As the period in question has a direct nexus with the
H scheme, in our opinion, it would not be correct to contend as
ASSISTANT COMMR. (CT) LTU AND ANR. v. AMARA 965
RAJA BATIERIES LTD. [S.B. SINHA, J.]
has been done by Mr. Venkatanarayanan that the said policy A
decision should be read with earlier policy decisions. Reference
to the earlier policy decision has nothing to do with the new
scheme introduced by the Government. They have been
referred to only for the purpose of tracing the history and to lay
emphasis on the fact that the Government of Andhra Pradesh B
had from time to time issued appropriate notifications with a
view to implement its liberalized State Incentive Schemes as
also the industrial policy statement issued in the year 1992.
-
~
Each of the Schemes, as noticed hereinbefore, operated in
different fields. Had the intention of the Government of Andhra
Pradesh been to continue with the old schemes, only the period
c
therefor could have been extended from time to time. It was not
necessary for it to issue notification introducing the new
scheme. The said notification indisputably was issued in
modification of all the earlier orders. What is meant by
D
modification has been noticed by the High Court in its judgment
.,...- in the following terms:
"... The word 'modification' means - 'an alteration that does
not change the general purpose and effect of that which
is modified (as per West's Legal Thesaurus/Dictionary); E
and, 'a change and alteration or amendment, which
introduces new element into the details or cancel some of
them but leave the general purpose and effect of the
subject matter intact' (as per the Judicial Dictionary - by
....
LP. Singh & P.K. Majmudar... " F
•
20. The State advisedly used the word 'modification'.
When the said GOMs No. 108 was issued, some of the earlier
notifications might be in force. There cannot, however, be any
doubt whatsoever that the said GOMs is totally an independent
G
one and a complete code by itself and in that view of the matter,
.. i.
it is not necessary at all to refer to the earlier GOMs for the
purpose of either its construction or implementation.
21. Paragraph 7 of the said GOMs refers to projects for
expansion. Setting up of such expansion projects in products H
~
966 SUPREME COURT REPORTS [2009) 11 S.C.R.
A other than those listed in the Annexure attached thereto refers
to enhancement of capacity by 25% thereof for which purpose
only the base turnover was to be the best 'production achieved'
during three years preceding the years of expansion or the
'maximum capacity expected to be achieved' by the industry.
B The notification used the words 'production achieved' and
'maximum capacity expected to be achieved'. It did not use the
word 'turnover'. It did not provide that the amount of sales tax
paid in the earlier years will have any relevance for the purpose
1-
of enforcement of the scheme. The said GOMs does not refer :..
to maintenance of local sales. The term 'base turnover' woutd,
c therefore, in our opinion refers to the turnover of the quantity in
goods and not its monetary value.
22. 'Base turnover' was defined differently from that of the
earlier definitions given in various earlier orders which clearly
D discloses the intention on the part of the government. If what
was provided in the earlier government orders were to be
followed, nothing prevented the State to adopt the same. We
..
have noticed hereinbefore that even on earlier occasions the
State had been issuing clarificatory notifications as has been
E done in the case of GOMs No. 75. It has rightly been pointed
out that even in GOMs No. 386, the State level Committee was
given liberty to adopt in the place of production the turnover in
value but such liberty had not been granted to the State Level
Committee or to any other authority under the GOMs in
F question.
Jo
..
23. An exemption notification should be given a literary
meaning. Recourse to other principles or canons of
interpretation of statute should be resorted to only in the event
the same give rise to anomaly or absurdity. The exemption
G
notification must be construed having regard to the purpose
and object it seeks to achieve. The Government sought for
increase in industrial development in the State. Such a
benevolent act on the part of the State, unless there exists any
,._
-
-
H
statutory interdict, should be given full effect. [See Vadila/
..
ASSISTANT COMMR. (CT) LTU AND ANR. v. AMARA 967
RAJA BATIERIES LTD. [S.B. SINHA, J.]
Chemicals Ltd. v. State of A.P. and Others (2005) 6 SCC 292] A
24. We may notice that this Court in lnnamuri Gopa/an
and Others v. State of Andhra Pradesh and Anr. ((1964) 2
SCR 888] held:
"... We do not feel persuaded to accept this argument. No B
doubt, statutes have to be construed as a whole so as to
· avoid any inconsistency or repugnancy among its several
-'!' provisions, but if there is nothing to modify, nothing to alter,
... or nothing to qualify the language of a statute, the words
and sentences have to be construed in their ordinary and c
natural meaning [vide 36 Hals (3rd Edn.) s. 585] ... "
The said dicta was followed by this Court in Hansraj
Gordhandas v. H.H. Dave, Assistant Collector of Central
Excise and Customs, Surat and Others [AIR 1970 SC 755], D
in the following terms:
...
" ... It is well established that in a taxing statute there is no
room for any intendment but regard must be had to the
clear meaning of the words. The entire matter is governed
wholly by the language of the notification. If the tax-payer E
is within the plain terms of the exemption it cannot be
denied its benefit by calling in aid any supposed intention
of the exempting authority ... " '
• "' The same in turn has been followed in Parle Biscuits (P) F
Ltd. v. State of Bihar and Others [(2005) 9 SCC 669], stating:
"19. It is well established that in a taxing statute there
is no room for any intendment and regard must be had to
the clear meaning of the words. The entire matter is
governed wholly by the language of the notification. If the G
taxpayer is within the plain terms of the. exemption, it
cannot be denied its benefit by calling in aid any supposed
intention of the exempting authority. If such intention can
be gathered from the construction of the words of the
notification or by necessary implication therefrom, the H
968 SUPREME COURT REPORTS (2009] 11 S.C.R.
A matter is different, but that is not the case here. In this
connection we may refer to the observations of Lord
Watson in Salomon v. Salomon & Co.5 (AC at p.
38): (All ER p. 41 C-0)
" 'Intention of the legislature' is a common, but very
B
slippery phrase, which, popularly understood, may signify
anything from intention embodied in positive enactment to
speculative opinion as to what the legislature probably
would have meant, although there has been an omission
to enact it. In a court of law or equity, what the legislature
c intended to be done or not to be done can only be
legitimately ascertained from that which it has chosen to
enact, either in express words or by reasonable and
necessary implication."
D 25. The exemption notification furthermore as is well known
should be construed liberally once it is found that the
entrepreneur fulfills all the eligibility criteria. In reading an
...
exemption notification, no condition should be read into it when
there is none. If an entrepreneur is entitled to the benefit thereof,
E the same should not be denied. [See Commissioner of Sales
Tax v. Industrial Coal Enterprises [(1999) 2 SCC 607]
26. In Commissioner, Trade Tax, U.P. v. DSM Group of
Industries [(2005) 1 SCC 657], this Court opined that when an
application for exemption is filed for an expansion or ;.
F diversification, Explanation 5 appended to Section 4-A(6) ..
specifying the word 'unit' must receive a liberal construction to
include not only a new unit but also a unit which is sought to be
expanded, modernized or diversified, stating :
G "25 ... As seen above, the term "unit" has the meaning as
defined in Section 4-A. As we have already seen, Section
4-A defines the term "unit" to mean an industrial
undertaking, which has undertaken expansion,
modernisation and diversification. Even under the General
H Clauses Act, where the context so requires the singular
ASSISTANT COMMR. (CT) LTU AND ANR. v. AMARA 969
RAJA BATIERIES LTD. [S.B. SINHA, J.]
can include the plural. A plain reading of the notification A
shows that for "expansion, modernisation and
diversification" it is the industrial undertaking which is
considered to be the "unit". This is also clear from the fact
that in the notification wherever the words "expansion,
modernisation or diversification" are used, there are no B
qualifying words to the effect "in any one unit". In none of
the clauses is there any requirement of the investment
being in one unit oMhe industrial undertaking. Words to
.~· the effect "in a particular unit" or "in one unit" are missing .
To accept Mr Sunil Gupta's submission would require c
adding words to a notification which the Government
purposely omitted to add."
In Mis. G.P. Ceramics Pvt. Ltd. v. Commissioner, Trade
Tax, UP. [(2009) 2 SCC 90], this Court held:
D
"29. It is now a well established principle of law that
whereas eligibility criteria laid down in an exemption
notification are required to be construed strictly, once it is
found that the applicant satisfies the same, the exemption
notification should be construed liberally." E
[See also A.P. Steel Re-Rolling Mill Ltd. v. State of Kera/a
and Others (2007) 2 SCC 725].
In State of Orissa v. Tata Sponge Iron Ltd. [(2007) 8 SCC
.. ·'r 189], this Court held: F
"21. It is furthermore a well-settled principle of law that an
exemption notification must be liberally construed."
27. We may furthermore notice that construction of the
words 'base production' came up for consideration before th_is G
Court in Commissioner of Trade Tax, UP. v. Modip'an Fibres
:{ Co. [(2006) 6 SCC 577] wherein it was opined:
"8. Purpose of granting exemption under the notification
dated 27-7-1999 was to promote the development of H
970 SUPREME COURT REPORTS [2009] 11 S.C.R.
A certain industries in the State. By the said notification, ,\.
exemption from payment of tax or reduction in rate of tax
was granted to new units as also to the units which had
undertaken expansion, diversification or modernisation.
The units of dealers in all the revisions are units, which had
B undertaken expansion/modernisation. The units of the
dealers (the respondents) are covered by clause (1-B)(a)
of the notification. Exemption granted is on the turnover of
sales of quantity of goods manufactured in excess of base
j.
production. Under clause (6)(a) of the said notification,
•
c turnover of sale of goods in any assessment year to the
extent of quantity covered by the base production of that
year and balance stock of base production of previous
years, shall be deemed to be turnover of the base
production. Under clause (6)(b) of the notification, the
facility of exemption can be availed on the turnover of
D
goods in "any assessment year" in excess of the quantity
referred to in sub-clause (a) of clause (6). A conjoint ...
reading of clause (1-B)(a), clauses (6)(a) and (b) makes
it clear that the dealer is entitled to claim exemption in
respect of the turnover of sale of goods of an assessment
E year in excess of the base production. "Assessment year"
has been defined in Section 30) to mean the twelve months
ending on March 31. If that be the case then the extent of
entitlement to exemption will depend on the sale of goods
in the assessment year minus the base production y
F determined under the Act (sic notification). Simply
because the dealer has to file returns from month to month
and deposit the admitted tax at the time of filing of the return
does not mean that the question of exemption on the
turnover of the production in excess• of the base production
G can be considered only after the base production is
achieved. Returns filed every month and the tax paid would
be subject to adjustment at the time of the finalisation of )-
the assessment. Intention of the legislature is clear and
unambiguous. Exemption is to be given on the turnover of
H sale of goods in an assessment year in excess of the base
ASSISTANT COMMR. (CT) LTU AND ANR. v. AMARA 971
RAJA BATTERIES LTD. [S.B. SINHA, J.]
production. We do not find any substance in the A
submission advanced on behalf of the appellants."
28. Although the word 'modification' may not be held to be
expressly repealing the earlier notifications, indisputably, the
State intended to depart from the conditions laid down in the
B
earlier GOMs. If the condition of local sale, thus, had not been
incorporated in the GOMs, we are of the opinion that no case
A has been made out for incorporating the same by reference or
• otherwise .
29. Furthermore, even in equity, the State cannot be c
permitted to alter its stand as pursuant to or in furtherance of
the representation made by it the entrepreneurs had not
,. '
collected tax from its consumers to which they were otherwise
entitled to.
D
~
30. Mr. Venkatanarayanan also is not correct in contending
that in a situation of this nature, the High Court should not have
entertained the writ applications directly from the orders of
assessment.
- 31. As the Tribunal had already expressed its views in the E
matter, it has rightly been contended that appeal to the
appellate authority as also the Tribunal would have be:en an idle
y
formality.
...
32. Civil Appeals arising· out of SLP (C) Nos. 18795,
F
19104, 21482 of 2006, 489, 12440 and 12151 of 2007 are
dismissed and other appeals being Civil Appeals arising out
of SLP (C) Nos. 14640 and 17903 of 2007 filed by
Suryachandra Paper Mills Limited are allowed with costs.
Counsel's fee assessed at Rs.50,000/- in each case.
G
:1. B.B.B. Appeals disposed of.
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