TaxTMI 
TaxTMI 
2016 (7) TMI 423
X X X X Extracts X X X X
X X X X Extracts X X X X
....ground or reason, as illegal, arbitrary, unlawful and violative of principles of natural justice. W.P. No.38751 of 2015 is filed by the petitioner seeking a writ of mandamus to declare Order No.36/2013- ST dated 30.10.2013 passed by the first respondent, in so far as penalty of Rs. 2,35,000/- was imposed without any valid ground or reason, as illegal, arbitrary, unlawful and violative of principles of natural justice. Facts, as stated in the writ affidavit, are that the petitioner-Company is engaged in the construction of roads, dams, bridges, irrigation projects, power projects, mining activities etc. They obtained registration in March, 2008 for payment of service tax for certain categories of services. It is their case that they were unaware of the need to obtain service tax registration for project services, activities relating to mining, industrial construction and erection, commissioning and installation services, construction of complex service, works contract services etc and, consequently, they did not obtain registration; service tax officials, who visited their corporate office in the year 2010, had pointed out, during preliminary scrutiny, that, while some of their b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed under Section 32-E of the Act with respect to the earlier two show cause notices were settled, did not justify rejection of the third application; the three show-cause notices were in respect of a continuous period from 01.08.2008 to 28.02.2012; the respondents could have issued only one notice for the entire period even by the date the third split up notice was issued; there was no reason to issue three notices for identical issues, and for a continuous period invoking the proviso to Sections 73 and 78 of the Finance Act, 1994; the Settlement Commission had settled identical cases arising out of the earlier two show-cause notices without any objection; no finding was recorded by the Commission that there were any malafides on their part; as they had fully admitted the proposed liability without demur, it could not be said that there was failure on their part to disclose full particulars and consequent liability; they were, however, imposed penalty without any justification; they had furnished all their records including the annual balance sheet, and did not suppress any facts; and the Commission was not justified in imposing penalty pursuant to the earlier two show-cause notice....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he show-cause notice proposed a demand of interest under Section 75, and penalty under Sections 76, 77 and 78 of the Finance Act; subsequently another show-cause in OR No.97/2012 dated 24.04.2012 was issued demanding service tax of Rs. 42,38,02,245/-, for the period October, 2010 to March, 2012, based on the information provided by the petitioner to the department vide their letters dated 02.08.2010, 30.08.2010 and 17.01.2011; the petitioner had furnished details of their liability on the services rendered by them to their service recipients, and the details of the Cenvat credit availed by them during the said show-cause notice period, by their letter dated 23.04.2012; the show-cause notice proposed a demand of interest under Section 75 and penalty under Sections 76, 77 and 78 of the Finance Act; interest on delayed payment of service tax was demanded under Section 75 of the Finance Act; the show-cause notice also demanded payment towards irregular Cenvat credit of Rs. 21,47,23,290/- availed by the petitioner, along with interest under the provisions of Rule 14 of the Cenvat Credit Rules, 2004 read with Section 75 of the Finance Act, 1994; penalty under Rules 15(1) and (3) of the C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re liable to pay service tax; the Writ Petition as filed is only an afterthought to delay proceedings in the case; the initial show-cause notice, for the period 01.08.2008 to 30.06.2010, was issued on the basis of the statements given by the petitioner; the second show-cause notice, covering the period 01.07.2010 to 30.09.2010, was issued on the basis of the information provided by the petitioner to the department by their letters dated 02.08.2010, 30.08.2010 and 17.01.2011; they had furnished details of the payment received by them for the said period of the show-cause notice vide their letters dated 19.10.2011 and 20.10.2011; the third show-cause notice, covering the period 01.10.2010 to 31.03.2012, was issued to the petitioner; this notice was issued on the basis of the information provided by the petitioner to the department by their letters dated 02.08.2010, 30.08.2010 and 17.01.2011, and the details of payments received by them for the said period of the show-cause notice by their letter dated 23.04.2012; after having accepted liability to pay service tax, the petitioner had approached the Settlement Commission to settle the case after filing truthful declaration before them;....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of service tax of Rs. 2,35,52,071/- and interest of Rs. 11,90,340/- was confirmed by the revenue; during the course of proceedings, the applicant made additional disclosure, and accepted and agreed to pay the balance amount of Rs. 32,67,552/- after receipt of the order from the Bench; in the facts and circumstances of the case, the Bench considered the additional amount of Rs. 2,68,19,623/- to be the applicant's true and full disclosure, besides applicable interest liability thereon; the Bench, therefore, considered it to be a fit case for settlement of service tax liability at Rs. 2,68,19,623/-; the applicant had paid Rs. 11,90,340/-towards interest; and additional interest, if any, required to be paid should be worked out by the jurisdictional Commissioner, and informed to the applicant for discharge of his full interest liability. The first respondent observed that the applicant had not paid service tax for the period July, 2010 to September, 2010 for various services rendered within the due dates, and had also not filed ST-3 returns in time; the applicant had not even taken registration for works contract services, erection commissioning or installation services and mining ser....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... SCN No.97/2012 dated 24.04.2012 for the period from October, 2010 to March, 2012; orders were passed in the first show-cause notice on 30.10.2013, and in the second show-cause notice on 06.11.2013, before the application, in respect of the third show-cause notice, was filed on 25.11.2013; in the first order dated 30.10.2013, a penalty of Rs. 2,35,000/- was imposed on the petitioner, and in the second order dated 06.11.2013 a penalty of Rs. 19,00,000/- was imposed on them; the petitioner had filed the third application, arising out of show-cause notice No.97/2012 dated 24.04.2012 covering the period of demand from October, 2010 to March, 2012, on 25.11.2013; during the course of hearing on 13.08.2014, the petitioner's counsel had submitted that the bar under Section 32-O of the Act was not applicable in this case, as they had approached the Commission on an identical matter for the subsequent period; this submission was not supported by the provisions of Section 32-O of the Act; applications, in respect of the first two show-cause notices, were filed by the petitioner on 28.01.2013 and 18.04.2013 both of which was only after the third show cause notice was issued to them on 24.04.2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....00/- respectively under these two orders; the third Settlement Application dated 25.11.2013 seeking settlement of the case arising out of Show-Cause Notice O.R. No. 97/2012 dated 24.04.2012, for the period October 2010 to March 2012, came to be rejected by order dated 14.11.2014; it is this order which is under challenge in W.P. No.38658 of 2015; and the ground on which the Commission rejected the application dated 25-11-2013 was that Section 32-O of the Act, as it applied to Service Tax proceedings by virtue of Section 83 of the Finance Act, 1994, barred a subsequent application if an earlier order, passed under Section 32F(5) or Section 32F(7) of the Act, provided for imposition of penalty on the ground of concealment of particulars of the applicant's duty liability. Learned Senior Counsel would submit that, when objections were called for from the respondent-officials by the Commission, they did not raise any objection regarding the maintainability of the third application; the petitioner had no inkling that their application would be rejected on the hyper-technical ground that it was filed after orders were passed on the earlier two applications; the third application was re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to the undesirable consequence, namely that a person who conceals particulars before the Commission would be completely immune, and can make successive applications; a reconciliation of these various positions would lead to the conclusion that the pre-amended provision contemplated a bar against a subsequent application, if penalty was imposed for concealment of particulars before the Commission; and the Explanation now extends the bar even in respect of cases of concealment before the Central Excise Officer. On the other hand Sri Jalakam Satyaram, Learned Standing Counsel for Central Excise, would submit that pursuant to the show cause notice issued on 24.04.2012 by the Jurisdictional Commissioner, covering the period from October, 2010 to March, 2012, the petitioner had filed the third application before the Settlement Commission on 25.11.2013; by the time the said application was decided by the Settlement Commission on 14.11.2014, the amendment to Section 32-O(1)(i), by way of insertion of an Explanation thereto, was already in the Statute w.e.f 06.08.2014; Section 32-O of Act is made applicable to service tax matters by Section 83 of the Finance Act 1994; the Settlement Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....missions and counter into the consideration, the writ petitions may be dismissed with exemplary costs. The show-cause notice in OR No.69/2010 dated 23.08.2011 related to the period 01.08.2008 to 30.06.2010 for failure on the part of the petitioner to pay service tax on mining of minerals service, oil and gas service under Section 65(105)(zzzy), transport of goods by road service under Section 65(105)(zzp), works contract service under Section 65(105)(zzzza), and erection, commissioning or installation services under Section 65(105)(zzd) of the Finance Act, 1994. After receipt of the said show-cause notice, the petitioner submitted an application before the Settlement Commission on 18.04.2013 which resulted in a final order being passed by the Settlement Commission on 06.11.2013. This order of the Settlement Commission dated 06.11.2013 is under challenge in W.P. No.38728 of 2015. Another show-cause notice was issued to the petitioner in O.R.No.137 of 2011 dated 22.10.2011 for the period July, 2010 to September, 2010 for failure to pay service tax on mining of minerals service, oil and gas service under Section 65(105)(zzzy), and works contract service under Section 65(105)(zzz....
X X X X Extracts X X X X
X X X X Extracts X X X X
....23.08.2011, on 06.11.2013 did the Settlement Commission reject their application as barred under Section 32-O(1)(i) of the Act on the ground that penalty had been imposed on the petitioner under the earlier two orders dated 30.10.2013 and 06.11.2013. The question which necessitates examination is whether the Explanation added to Section 32-O(1)(i) of the Act, by Section 101 of Finance Act 2 of 2014 w.e.f. 06.08.2014, is prospective or retrospective in its application. If it is the latter, the Settlement Commission was then justified in rejecting the petitioner's application by its Order dated 14.11.2014 on the ground that they had, by the earlier Orders dated 30.10.2013 and 06.11.2013, suffered penalty for concealment of particulars of their duty liability before the Central Excise Officer. If, on the other hand, the Explanation only operates prospectively, we must then examine whether Section 32-O(1)(i) of the Act, before the Explanation was added thereto, barred an application being entertained by the Settlement Commission when, by its earlier orders, it had imposed penalty on the very same applicant for concealment of duty liability before the Central Excise Officer. It is us....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o apply the Explanation to Section 32-(O)(1)(i) of the Act retrospectively, it is useful to note the There is no general theory, as to the effect and intendment of an Explanation, except that the purposes of the 'Explanation' are determined by its own words. An Explanation, depending on its language, might supply or take away something from the contents of a provision. (Keshavji Ravji & Co. v. CIT (1990) 2 SCC 231 ). An Explanation to a provision of an Act is inserted to clarify the vagueness which might have otherwise occurred in the provision of the Act. (Dipak Chandra Ruhidas v. Chandan Kumar Sarkar (2003) 7 SCC 66). An Explanation cannot be read as changing or as interfering with the incidence of a levy. (M.P. Cement Manufacturers' Assn. v. State of M.P., (2004) 2 SCC 249 ). An Explanation may also be introduced by way of abundant caution in order to clear any mental cobwebs surrounding the meaning of a statutory provision spun by interpretative errors, and to place what the legislature considers to be the true meaning beyond controversy or doubt. (Keshavji Ravji & Co. (1990) 2 SCC 231). An Explanation may also be inserted ex abundanti cautela because of a groundless apprehensi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and Distributing Company of India Ltd. [1961] I SCR 902; Dattatraya Govind Mahajan AIR 1977 SC 915). The object of an Explanation to a statutory provision is (a) to explain the meaning and intendment of the Act itself, (b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it consistent with the dominant object which it seems to subserve, (c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful, (d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where some gap is left which is relevant for the purpose of the Explanation, in order to suppress the mischief and advance the object of the Act, it can help or assist the Court in interpreting the true purport and intendment of the enactment, and (e) it cannot, however, take away a statutory right with which any person under a statute has been clothed or set at naught the working of an Act by becoming a hindrance in its interpretation. (S. Sundaram Pillai (1985) 1 SCC 591. The Explanation must be read so as to harmonise with and clear up any ambiguity in the main provision. (M/s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty or otherwise of the Explanation therefore assumes relevance. Where the legislature can make a valid law, it can provide not only for the prospective operation of the material provisions of the said law, but also for the retrospective operation of the said provisions. (Rai Ramkrishna v. The State of Bihar AIR 1963 SC 1667 = (1964 (1) SCR 897 ; M/s. Satnam Overseas (Export) v. State of Haryana AIR 2003 SC 66). The power to legislate includes the power to legislate prospectively as well as retrospectively and, in that behalf, tax legislation is no different from any other legislation. The power to tax can be competently exercised by the legislature either prospectively or retrospectively. (Jawaharmal v. State of Rajasthan AIR 1966 SC 764 = (1966 (1) SCR 890 ; M/s. Satnam Overseas (Export) AIR 2003 SC 66). While clarificatory provisions have retrospective application, a provision cannot be said to be clarificatory if it neither supplies an obvious omission in the Act nor purports to explain any provision thereof. (M/s.Satnam Overseas (Export) AIR 2003 SC 66). III. THE RIGHT TO SEEK SETTLEMENT IS REGULATED BY THE PROVISIONS OF CHAPTER-V OF THE ACT: While examining the question,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rns showing production, clearance and central excise duty paid in the prescribed manner; (b) a show cause notice for recovery of duty issued by the Central Excise Officer has been received by the applicant; (c) the additional amount of duty accepted by the applicant in his application exceeds three lakh rupees; and (d) the applicant has paid the additional amount of excise duty accepted by him along with interest due under Section 11AA. The second proviso to Section 32-E(1) enables the Settlement Commission, if it is satisfied that circumstances exist for not filing the returns referred to in clause (a) of the first proviso to sub-section (1), after recording reasons therefor, to allow the applicant to make such application. The third proviso disables an application being entertained by the Settlement Commission under Section 32E(1) in cases which are pending with the Appellate Tribunal or any Court. The fourth proviso stipulates that no application under Section 32-(E)(1) shall be made for the interpretation of the classification of excisable goods under the Central Excise Tariff Act, 1985 (5 of 1986). Section 32E(4) provides that an application, made under Section 32-E(1), sha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d where the amount admitted as payable by the assessee towards duty, in addition to what they had paid earlier, is less than Rs. 3.00 lakhs; and (3) the applicant should have paid the additional amount of excise duty, admitted by them as due, along with interest thereon in terms of Section 11AA of the Act. The third proviso to Section 32-E bars an application being entertained by the Settlement Commission in cases which are pending before the Appellate Tribunal or any Court. The fourth proviso to Section 32E(1) discourages any attempt by an applicant to have a classification dispute settled by the Commission since there cannot, ordinarily, be any settlement with regards classification of goods which must be uniform for all manufacturers of identical goods. Unlike the adjudicatory process, settlement proceedings take place only if the assessee voluntarily opts for resolution of the dispute through the settlement process under Chapter V of the Act. It is only after the assessee has received a show-cause notice from the Central Excise Officer regarding non-payment of duty, and before the duty liability has been adjudicated by the said Officer, can an application be made by the asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Settlement Commission, (Garikapati Veeraya v. N. Subbiah Choudhry AIR 1957 SC 540 = 1957 SCR 488 ; Nahar Industrial Enterprises Ltd. (2009) 8 SCC 646; Dilip S. Dahanukar v. Kotak Mahindra Co. Ltd. (2007) 6 SCC 528), or during pendency of settlement proceedings. V. PROVISIONS WHICH TOUCH UPON AN EXISTING RIGHT WOULD NOT, ORDINARILY, HAVE RETROSPECTIVE OPERATION: While provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch upon a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment. It is settled law that a right of appeal, being a substantive right, preserves all successive appeals available under the law then in force to the parties to the Suit throughout the rest of the career of the suit. Likewise the right to make an application to the Settlement Commission is preserved from the date on which the show cause notice is received by the applicant. There are two exceptions to the application of this rule, viz, (1) when, by competent en....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., since they are remedial in nature. The right will not be restricted or denied unless such a construction is unavoidable. (Super Cassettes Industries Ltd. (2009) 10 SCC 531; V.C. Shukla v. State AIR 1980 SC 962 = 1980 Supp SCC 92; Crawford : The Construction of Statutes). As the Explanation to Section 32-O(1)(i) was inserted with effect from 06.08.2014 long after the petitioner received the show cause notice dated 24.04.2012, which resulted in their making an application for settlement on 25.11.2013, the Explanation cannot be applied retrospectively to deny the petitioner the right to make an application to the Settlement Commission which accrued to them when they received the show cause notice dated 24.04.2012. VII. AN EXPLANATION, ADDED TO A PROVISION, SHOULD BE CONSTRUED HARMONIOUSLY WITH OTHER PROVISIONS OF CHAPTER-V OF THE ACT, AND SHOULD NOT BE READ IN ISOLATION: The question, whether or not the Explanation has retrospective application, can be examined from another angle also. It is settled law that the Court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statute. It must compare t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cified in the notice. Section 31(a), in Chapter V of the Act, defines "assessee" to mean any person who is liable for payment of excise duty assessed under the Act or any other Act and includes any producer or manufacturer of excisable goods. Section 31 (c) defines "case" to mean proceedings under the Act or any other Act for the levy, assessment and collection of excise duty, or any proceeding by way of appeal or revision in connection with such levy, assessment or collection, which may be pending before a Central Excise Officer or Central Government. Section 32(1) of the Act requires the Central Government, by notification in the Official Gazette, to constitute a Commission to be called the Customs and Central Excise Settlement Commission for the settlement of cases under Chapter-V of the Act. Section 32A relates to jurisdiction and powers of the Settlement Commission and under sub-section (1) thereof, subject to the other provisions of Chapter-V, the jurisdiction, powers and authority of the Settlement Commission may be exercised by benches thereof. Section 32F prescribes the procedure on receipt of an application under Section 32E. Sub-section (1) thereof stipulates that,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....settlement under Section 32E was made. Section 32-I (1) confers on the Settlement Commission all the powers which are vested in a Central Excise Officer under the Act or under the Rules made thereunder. During the pendency of proceedings before it, i.e., during the period after an application has been submitted to it and before an order is passed under Section 32-F(5), the Settlement Commission has exclusive jurisdiction, in terms of Section 32-I(2), to exercise the powers and perform the functions of a Central Excise Officer in relation to the case and, consequently, no other officer can exercise jurisdiction in the matter. Section 32K(1) confers power on the Settlement Commission to grant the applicant immunity from prosecution for any offence under the Act. The power to grant immunity is, however, hedged by certain restrictions including that (1) the applicant should have co-operated with the Settlement Commission in the proceedings before it; and (2) the applicant must have made a full and true disclosure of his duty liability. The power to grant immunity can be exercised by the Settlement Commission subject to such conditions as it may think fit to impose. In addition to th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ement shall be conclusive as to the matters stated therein, and no matter covered by such order shall, save as otherwise provided in Chapter-V, be reopened in any proceeding under the Act or under any other law for the time being in force. Section 32N stipulates that any sum, specified in the order of settlement passed under Section 32F(5), may be recovered and any penalty, for default in making payment of such sum, may be recovered as sums due to the Central Government. Section 32P stipulates that any proceedings, under Chapter V before the Settlement Commission, shall be deemed to be a judicial proceeding within the meaning of Section 193 and 228, for the purpose of Section 196 of the Indian Penal Code. VIII. DECLARATORY OR CURATIVE PROVISIONS HAVE RETROSPECTIVE APPLICATION: On a reading of the aforesaid provisions, it is clear that even before the Explanation was inserted to Section 32-O(1)(i) of the Act, with effect from 06.08.2014, an Explanation was inserted to Section 32K(1) of the Act by Act 22 of 2007 with effect from 01.06.2007. Unlike the Explanation to Section 32O(1)(i), the Explanation to Section 32K(1) uses the words "for removal of doubts, it is hereby declared....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns, normally different meaning is required to be assigned to the language used by the legislature, and there is a presumption that they are not used in the same sense. (Arthur Paul Benthall41; Oriental Insurance Co. Ltd. v. Hansrajbhai V Kodala (2001) 5 SCC 175 = AIR 2001 SC 1832). If the legislative intent was not to distinguish, and it was intended that both the Explanation to Section 32-K(1) and Section 32-O(1)(i) should have retrospective operation, there would have been no necessity of expressing the position differently and, while using the words "for the removal of doubts it is hereby declared" in the Explanation to Section 32-K(1), to refrain from using a similar expression in Section 32-O(1)(i) of the Act. When the situation has been differently expressed the legislature must be taken to have intended to express a different intention. (CIT v. East West Imports and Exports (P) Ltd., (1989) 1 SCC 760). X. REMEDIAL ACTS, ORDINARILY, OPERATE PROSPECTIVELY: As the newly inserted Explanation to Section 32-O(1)(i) does not indicate that it was enacted to remove any doubt or declare what the law has always been, it must be construed to be an ordinary remedial piece of legisl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uffered a penalty for such non-disclosure, is a subsequent application for settlement barred. On the other hand the construction placed on Section 32-(O)(1)(i) by the revenue would bar an applicant from availing the statutory remedy of a settlement, before the Settlement Commission, in terms of Chapter V of the Central Excise Act if the Settlement Commission had earlier imposed penalty for concealment of duty liability only before the Central Excise Officer, and not before itself. The ambiguity in the language used in Section 32-O(1)(i) has resulted in two opposite construction being placed thereon, one on behalf of the assesee, and the other on behalf of the revenue. It is not for the Court, when legislative clarity is required, to untangle the legislative confusion. The legislature could have avoided the controversy, if it had wished to make the provison explicit, by the simple expedient of so providing. The legislature in its wisdom did not choose to do so. (M.P. Cement Manufacturers' Assn. v. State of M.P., (2004) 2 SCC 249). Courts cannot aid the legislatures' defective phrasing of an Act. It cannot add or mend, and by construction make up deficiencies which are left th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rtaining a subsequent application where a penalty has been imposed in an earlier application filed by the assessee for concealment of duty liability from the Settlement Commission itself. Accepting the construction placed on Section 32-(O)(1)(i) by the revenue would mean that, while the Settlement Commission can refuse to grant or withdraw immunity, and send a case back to the Central Excise Officer, it cannot bar a second application when penalty, for concealment of duty liability before it, has been imposed in the earlier application. Such a construction is difficult to accept. We find force in the alternative construction placed thereon by Sri S. Ravi, Learned Senior Counsel, that, prior to insertion of the Explanation with effect from 06.08.2014, the concealment referred to in Section 32-O(1) (i) of the Act related only to concealment of particulars of duty liability before the Settlement Commission, and not for concealment of such particulars before the Central Excise Officer, as that would accord with the other powers conferred on the Settlement Commission under Sections 32-(K) and (L) of the Act. In this context it is useful to note that i n Ankit Metal and Power Ltd. v. Set....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s presumed, even by the legislature, to suffer from ambiguity necessitating legislative intervention and an Explanation being added thereto. Further even if it is presumed that Section 32-O(1)(i) is capable of more than one construction and the construction placed thereon, that concealment of particulars of duty liability relates to concealment either before the Settlement Commission or the Central Excise Officer, were to be held also to be a possible interpretation, it is well settled law that, in case of ambiguity in a fiscal/penal statute and where the provision is capable of being construed in more than one manner, the construction which favours the assessee should be preferred. In interpreting a fiscal statute, the court cannot proceed to make good deficiencies if there be any: the court must interpret the statute as it stands and in case of doubt in a manner favourable to the taxpayer. (C.A. Abraham v. ITO AIR 1961 SC 609 = (1961) 2 SCR 765 ; J.K. Steel Ltd. v. Union of India AIR 1970 SC 1173 = (1969) 2 SCR 481). A taxing statute must be construed strictly, and if two meanings are equally possible, the meaning in favour of the subject must be given effect to. (Board of Revenu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h favours the assessee, and which has been acted upon and accepted by the Revenue for a long period, should not be disturbed except for compelling reasons; there were no compelling reasons to hold that Explanation III, inserted in Section 194-C with effect from 01.07.1995, was clarificatory or retrospective in operation; and Section 194-C, before insertion of Explanation III, was not applicable to transport contracts, i.e., contracts for carriage of goods. XV. IS THE DELAY OF ONE YEAR, IN FILING W.P.NO.38658 OF 2015, FATAL? W.P. No.38658 of 2015, wherein the validity of the order of the Settlement Commission dated 14.11.2014 is put in issue, was filed before this Court on 26.11.2015, a little over one year from the date on which the impugned order was passed. The rule which says that the Court may not enquire into belated and stale claims is not a rule of law, but a rule of practice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy claimed are, and how the delay arose. The principle on which relief to the party, on the grounds of laches or delay, is denied i....