2010 (9) TMI 30 - HC - Central Excise

Court interprets amended notification, rules in favor of petitioners, upholding validity and avoiding discrimination.

The court allowed the petition, holding that the interpretation placed by the Revenue on the amended notification was incorrect and discriminatory. The ... Exemption notification no. 175/86 – conditions to be satisfied – ultra virus amendment – the words ‘And’ versus ‘Or’ – Held that: - It is needless to mention that the word `or' and the word `and' are often used interchangeably. There are occasions when the Court, through construction, may change one to the other. This cannot be done, if the meaning of the statute is clear. A departure from natural and plain meaning of the word `and' can be made whenever context justifies it or makes it necessary so do; but the departure ought not to be made, except for good and sufficient reason. - Thus, to give effect to the manifest intention of the Government as disclosed from the context the word `and' appearing in proviso after clause (b) to para-4 needs to be read as `or' to save the notification from the vice of Article 14 of the Constitution of India. Issues Involved:1. Validity of the order dated 14th December 1990.2. Constitutionality of the second proviso appended to paragraph 4(b) of Notification No.175/86C.E., as amended by Notification No.174/89C.E.3. Interpretation of the amended notification and its compliance requirements.4. Alleged violation of Articles 14 and 19(1)(g) of the Constitution of India.Issue-wise Detailed Analysis:1. Validity of the Order Dated 14th December 1990:The petitioners challenged the order dated 14th December 1990, which denied them the benefit of Notification No.175/86 as amended by Notification No.174/89. The Assistant Commissioner held that the petitioners were not entitled to the benefit of the notification because they had not availed of the exemption during the financial year 1986-87. The petitioners argued that this interpretation was unjust and discriminatory.2. Constitutionality of the Second Proviso Appended to Paragraph 4(b) of Notification No.175/86C.E., as Amended by Notification No.174/89C.E.:The petitioners contended that the second proviso to paragraph 4(b) of Notification No.175/86C.E., as amended, was ultra vires Articles 14 and 19(1)(g) of the Constitution of India. They argued that the proviso discriminated against units that came into existence after the financial year 1986-87, depriving them of the benefits of the notification without any rational basis.3. Interpretation of the Amended Notification and Its Compliance Requirements:The petitioners argued that the interpretation placed by the Revenue on the amended notification was incorrect. They contended that the word 'and' in the proviso should be read as 'or' to avoid rendering the notification absurd and unworkable. They emphasized that units registered with the Directorate General of Technical Development (DGTD) could not have availed the benefits of the notification prior to 1st September 1989, as they were not eligible until the amendment.4. Alleged Violation of Articles 14 and 19(1)(g) of the Constitution of India:The petitioners argued that the interpretation placed by the Revenue on the amended notification violated Articles 14 and 19(1)(g) of the Constitution of India. They claimed that it discriminated between similarly situated units based on an arbitrary cut-off date, resulting in unequal treatment. The petitioners contended that the notification should be interpreted in a manner that upholds the principles of equality and non-discrimination.Consideration and Judgment:The court found that the literal interpretation of the amended notification by the Revenue led to an absurd and unintelligible result, defeating the purpose of the amendment. The court held that the word 'and' in the proviso should be read as 'or' to avoid rendering the notification discriminatory and unworkable. The court emphasized that the government has the power to impose conditions for extending benefits under a notification, but such conditions must be reasonable and non-discriminatory.The court cited several precedents, including the case of Tirath Singh v. Bachittar Singh, where the Apex Court held that a statute should be construed to avoid manifest contradictions or absurdities. The court also referred to the principle of reading down provisions to uphold their constitutionality, as observed in All Saints High Court, Hyderabad v. Government of Andhra Pradesh.Conclusion:The court allowed the petition, holding that the interpretation placed by the Revenue on the amended notification was incorrect and discriminatory. The court read down the word 'and' in the proviso as 'or' to uphold the notification's validity and avoid violating Articles 14 and 19(1)(g) of the Constitution of India. The petitioners were thus entitled to the benefits of Notification No.175/86C.E. as amended. The rule was made absolute with no order as to costs.