2005 (8) TMI 113 - SC - Customs

Amended exemption notification of 27-11-1997 given beneficent, retrospective effect for agricultural beneficiaries who previously availed benefit

GOVERNMENT OF INDIA Versus INDIAN TOBACCO ASSOCIATION

SC dismissed the appeal, upholding the HC's ruling that the amended exemption notification of 27-11-1997 should be given beneficent construction and ... Interpretation of the expression 'substitute' - Retrospective effect of the amended notification dated 27-11-1997 - doctrine of fairness - Held that:- In a case of this nature where the effect of a beneficent statute was sought to be extended keeping in view the fact that the benefit was already availed of by the agriculturalists of tobacco in Guntur, it would be highly unfair if the benefit granted to them is taken away, although the same was meant to be extended to them also. For such purposes the statute need not be given retrospective effect by express words but the intent and object of the legislature in relation thereto can be culled out from the background facts. The question has furthermore to be considered having regard to the language and object discernible from the statute read as a whole. The Respondents were not ineligible from obtaining the benefit. Once they are held to be eligible for obtaining the benefit, the amended notification being an exemption notification should receive the beneficent construction. It is not a case where the Respondents were ineligible from claiming the benefit. The subsequent notification, thus, should receive a beneficent construction. registration at the inland container depot was to remain valid for a period of 12 months only and in that view of the matter too, it cannot be said that the Central Government intended to deprive the Respondents herein who were agriculturists from the benefit of the aforementioned notification dated 7-4-1997 only for a limited period, viz., between 7-4-1997 and 27-11-1997. We, therefore, are of the opinion that the High Court cannot be said to have committed any error in arriving at the aforementioned conclusion. Appeal dismissed. Issues Involved:1. Interpretation of the term 'substitute' in the context of a notification.2. Retrospective effect of the amended notification dated 27-11-1997.3. Eligibility for benefits under the Duty Entitlement Pass Book (DEPB) Scheme for exports made before the amendment.Issue-wise Detailed Analysis:1. Interpretation of the term 'substitute' in the context of a notification:The primary issue in this case revolves around the interpretation of the word 'substitute' as used in the amended notification dated 27-11-1997. The court examined various dictionary definitions and legal precedents to establish that 'substitute' generally means 'to put in place of another' or 'to replace.' The court noted that the amendment did not take away any substantive rights or impose any penal consequences but sought to correct an obvious mistake.2. Retrospective effect of the amended notification dated 27-11-1997:The court scrutinized whether the amended notification should have a retrospective effect. The original notification dated 7-4-1997 did not include 'Guntur' as an Inland Container Depot eligible for the DEPB Scheme. The amendment on 27-11-1997 included 'Guntur' by way of substitution. The court held that the term 'substitution' implies that the change relates back to the original notification, thus giving it a retrospective effect. The court cited various precedents, including Ramkanali Colliery of BCCL v. Workmen and Zile Singh v. State of Haryana, to support this interpretation. The court concluded that the amendment was intended to rectify an omission and thus should be applied retrospectively.3. Eligibility for benefits under the Duty Entitlement Pass Book (DEPB) Scheme for exports made before the amendment:The respondents argued that the amended notification should cover the period from 7-4-1997 to 27-11-1997, making them eligible for DEPB benefits for exports made during this period. The court noted that the Central Government did not explicitly state that the benefit was to be prospective only. Furthermore, the court observed that the respondents were not ineligible for the benefits and had been exporting tobacco from 'Guntur' even before the amendment. The court emphasized that exemption notifications should be construed liberally to achieve their beneficent purpose. Consequently, the court held that the respondents were eligible for the benefits under the DEPB Scheme for the period in question.Conclusion:The court dismissed the appeal, affirming the High Court's decision that the amended notification dated 27-11-1997 had retrospective effect and that the respondents were eligible for DEPB benefits for exports made from 'Guntur' between 7-4-1997 and 27-11-1997. The judgment underscores the principle that exemption notifications should be liberally construed to fulfill their intended purpose.