Exemption notification interpretation: later scheme computed on investment spent, without importing earlier additional-capacity restriction.

Exemption under the notification dated 19 June 1991 for expansion, diversification or modernisation was to be computed on the amount spent as investment under the later notification's own terms. The later notification did not incorporate the additional-capacity restriction found in the earlier notification dated 27 September 1990; it only required inclusion of tax already exempted under that earlier notification for calculation purposes. The court held that a deficiency in the language of a notification cannot be filled by judicial interpretation, and conditions from an earlier notification cannot be imported unless expressly adopted. The revisional order was therefore set aside in favour of the assessee.

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Issues: Whether, under the notification dated June 19, 1991, tax exemption for expansion, diversification or modernisation was to be computed with reference only to the amount spent as investment, or whether the restriction tied to additional capacity created under the earlier notification dated September 27, 1990 also governed the later notification.

Analysis: The later notification was construed on its own language. Clause (a) of Explanation II linked exemption to the amount spent as investment, and did not refer to additional capacity created. Clause (c) of Explanation II only required inclusion of the amount of tax exempted under the earlier notification while computing the exemption under the later notification. It did not incorporate the earlier notification's restriction relating to additional capacity. The Court held that a deficiency in the language of the notification could not be supplied by judicial interpretation, and that the conditions of the earlier notification were not adopted into the later one.

Conclusion: The exemption under the notification dated June 19, 1991 had to be calculated on the basis of the amount spent as investment, without importing the additional-capacity restriction from the notification dated September 27, 1990. The revisional order was therefore set aside in favour of the assessee.

Ratio Decidendi: An exemption notification must be construed according to its plain language, and conditions from an earlier notification cannot be imported into a later notification unless expressly adopted.

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