Strict interpretation of exemption notification upheld for imported cars under EPCG-linked entry tax concession

Exemption notifications must be construed strictly on their own language, and item 9 of the 19.05.2003 entry tax notification extended only to capital goods brought into a local area by or to units covered under the EPCG Scheme, subject to its stated conditions. The EPCG Scheme could not be treated as interchangeable with the notification, and no additional words could be read in to enlarge the concession. Reference to the statutory meaning of capital goods under the then-applicable tax law was permissible, and the classification was not discriminatory because the enabling provision allowed exemption only for specified goods or classes. The denial of concessional entry tax on imported cars was therefore lawful, and the refund claim failed.

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Issues: Whether imported motor cars were entitled to concessional entry tax under item 9 of the exemption notification dated 19.05.2003 by reason of their reference to the Export Promotion Capital Goods Scheme, and whether the authorities were justified in denying the concession by construing the notification strictly and by referring to the definition of capital goods under the Goa Value Added Tax Act, 2005.

Analysis: The notification issued under Section 25(1) of the Goa Tax on Entry of Goods Act, 2000 was an exemption notification and therefore had to be interpreted strictly on its own language. Item 9 covered only capital goods brought or caused to be brought or delivered into a local area by or to units covered under the EPCG Scheme, subject to the stated conditions, and did not extend to every good mentioned in the EPCG Scheme. The scheme and the notification were not interchangeable, and no words could be added to enlarge the scope of the concession. The authorities were also justified in referring to the meaning of capital goods through the statutory scheme then applicable, and the classification was not discriminatory because Section 25 empowered the State to grant exemption or reduction only to specified goods or classes.

Conclusion: The denial of concessional entry tax on the imported cars was lawful, and the petitioners were not entitled to the refund claimed.

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