Sugar rebate slabs must be applied against average five-year production, not isolated excess production

The sugar rebate under Notification No. 146 dated 12-10-1974 was to be computed on the excess production measured against the average production of the preceding five sugar years. The notification's slab rates applied only after that comparison, and the plain language of the exemption could not be expanded by adding words or treating the excess production in isolation. On that construction, the excess did not reach the first slab and the supplementary rebate claim failed. The governing principle was that an exemption notification must be construed strictly according to its express language.

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Issues: Whether the sugar rebate under Notification No. 146 dated 12-10-1974 had to be computed by applying the percentage slabs to the excess production itself, or by calculating the excess production with reference to the average production of the preceding five sugar years.

Analysis: The notification granted exemption only in respect of sugar produced in excess of the average production of the corresponding period of the preceding five sugar years. The slab rates in clauses 2(a) to 2(e) were held to operate on the excess after it was measured against that average production. The Court applied the plain language of the notification and refused to add words to it. On that construction, the percentage slabs were to be worked out with reference to the average production, not with reference to the excess production alone. The supplementary claim failed because the excess production did not cross the first slab when so calculated.

Conclusion: The rebate had to be computed with reference to the average production of the preceding five sugar years, and the assessee was not entitled to the higher supplementary rebate claimed.

Ratio Decidendi: An exemption notification must be construed according to its express language, and where rebate slabs are linked to production in excess of an average, the percentage slabs are to be calculated with reference to that average and not by isolating the excess production.

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