Exhaustive charging definition excludes interest on securities from interest-tax without clear statutory inclusion.

Section 2(7) of the Interest-tax Act, 1974 was treated as an exhaustive charging definition because it uses "means and includes", so only interest on loans and advances, and the specifically added items of commitment charges and discounts on promissory notes and bills of exchange, fell within its scope. Interest on debentures, bonds and Government securities was not expressly covered, and the earlier exclusion of securities could not expand the charging provision by implication. The statute was therefore understood to target financing transactions, not investment returns from securities, and interest on such securities was not chargeable to interest-tax.

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Issues: Whether interest on debentures, bonds and Government securities formed part of "interest" chargeable to interest-tax under section 2(7) of the Interest-tax Act, 1974.

Analysis: The definition in section 2(7) was held to be exhaustive because it uses the words "means and includes". The main part of the definition covers interest on loans and advances, while the inclusive part extends it only to commitment charges and discount on promissory notes and bills of exchange. Interest on securities was not expressly included, and the deletion of the earlier exclusion could not by itself enlarge the charging provision. The Court distinguished investment in securities from lending by loans and advances, holding that an investment may create a debtor-creditor relationship but does not necessarily amount to a loan. The commercial and economic character of bonds, debentures and Government securities, the Finance Minister's speech, and the statutory context all indicated that the levy was intended to cover financing transactions and not interest from securities.

Conclusion: Interest on debentures, bonds and Government securities was not chargeable to tax under the Interest-tax Act, 1974.

Ratio Decidendi: Where a charging definition uses "means and includes", only the specifically covered species can be taxed, and interest on securities cannot be brought within interest-tax unless the statute clearly includes it.

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