Carry-forward of rebate reduction under taxing law must rest on express wording; ambiguity is resolved for the assessee.

The Finance Act, 1959 was read as not expressly allowing carry forward of an unabsorbed reduction in rebate from an earlier assessment year. The computation mechanism in the second proviso was confined to the statutory scheme and to the immediately preceding year, so the reduction could not be extended by implication across years. Where the taxing language was capable of two reasonable interpretations, the construction favourable to the assessee was applied. On that basis, the revenue's broader carry-forward approach was rejected and the rebate reduction was not permitted to be carried forward.

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Issues: Whether the unabsorbed reduction in rebate relating to an earlier assessment year could be carried forward and set off against the rebate available under the Finance Act, 1959 for the assessment year 1959-60.

Analysis: The relevant provisions of the Finance Act, 1959 did not expressly provide for carry forward of any unabsorbed reduction in rebate from year to year. The computation mechanism in the second proviso was confined to the manner stated in the statute and was read as permitting consideration only of the unabsorbed reduction, if any, relatable to the immediately preceding year covered by the statutory scheme. A taxing provision capable of two reasonable interpretations had to be construed in the manner favourable to the assessee.

Conclusion: The unabsorbed reduction in rebate could not be carried forward from the earlier year in the manner contended by the revenue, and the issue was answered in favour of the assessee.

Ratio Decidendi: In the absence of an express statutory provision for carry forward, a rebate reduction under a taxing statute cannot be extended by implication beyond the year or computation period specifically provided, and any reasonable ambiguity must be resolved in favour of the assessee.

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