TaxTMI 
TaxTMI 
2025 (12) TMI 903
X X X X Extracts X X X X
X X X X Extracts X X X X
....nufacture and Other Operations under Section 65 of the Act." "I hereby reject the application dated 14.12.2024 of M/s Bhagwati Products Limited, Tower WTC One C, TZ-13A, IT Park, Tech Zone, Greater Noida, Gautam Budh Nagar 201308 for the License for Private Warehouse under Section 58 of the Customs Act, 1962 along with the permission to carry out Manufacture and Other Operations under Section 65 of the Act." 1.2 Since the issues involved in both the communications and observation made for rejection in both, are identical both the appeals against these communications have been taken up for consideration simultaneously. 2.1 Vide applications dated 14.12.2024 appellant had applied for grant of License for Private Warehouse at the addresses indicated in the application under Section 58 of Customs Act, 1962 (Act) read with Private Warehousing Licensing Regulation, 2016 (PWLR), along with the permission to carry out of Manufacture and Other Operations under Section 65 of the Act read with Manufacture and Other Operations (No.2) Regulations, 2019 (MOOWR). 2.2 On scrutiny of the documents- Balance Sheet of the appellant it was observed that cases as detailed in tabl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d." "the Company has not been penalized under the Customs Act, 1962, the Company submits that the matter is currently under litigation before the Hon'ble Supreme Court, with no final adjudication on any alleged violations. The undertaking dated 22.01.2025. was given on the premise that a penalty cannot be considered final until the judicial process concludes with an adverse ruling. It would be inappropriate to assume that the Company has been rightly penalized while the dispute remains pending. Therefore, the statement in the undertaking is neither misleading nor incorrect but accurately reflects the present status of the case, where no conclusive liability has been established." 2.8 Appellant relying on the decision of Delhi Bench in case of Kunadan Care Products Ltd. [Final Order No 56198/2024 dated 31.07.2024] and Chennai Bench in case Flemingo DFS Private Limited [Final Order No 40621/2023 dated 31.07.2023] requested that their application be allowed. 2.9 After following the principles of natural justice and hearing the appellant representatives, both the applications have been rejected. 2.10 Aggrieved appellant has filed these appeals. 3.1 We have hear....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of provisions of law. o The above submission also gets fortified if regard is had to the other clauses of Regulation 3(2) which clearly establishes that only when criminally the person is punished, the same becomes a bar for grant of the licence. For example, clause (b) of Regulation 3(2) refers to "convicted for an offence...". Similarly, subclause (iv) of clause (e) refers to "criminal proceedings are pending" and "offences involved are of such nature that he is not a fit person for grant of licence." Thus, a combined reading of the various sub- clauses of Regulation 3(2) and a contextual interpretation of the said clauses clearly indicate that the phrase "penalized for an offence..." would get attracted only when the applicant has been punished for an offence in a criminal proceeding under any of the Acts mentioned therein viz., Customs Act, Central Excise Act or Finance Act, 1994. The expression "offence' has to have the same meaning throughout Regulation 3(2) in any of the sub-clauses therein, which is 'an act or commission which is punished under the criminal proceedings. The expression "offence' cannot have different meanings for different clauses of Reg....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... confinement, or loss of property, right, or privilege assessed against a personal who has violated the law * Sentence Criminal procedure - The judgment that a court formally pronounces after finding a criminal defendant guilty; the punishment imposed on a criminal wrongdoer * In criminal jurisprudence, conviction and sentencing are two distinct stages and every conviction does not necessarily mean that the person who has been found guilty will be treated as punished or he will be met with punishment. Conviction which is not followed up by imposing sentence by way of punishment remains only conviction and not does not amount to 'punished.' * Thus if somebody has been found to be guilty of an offence under Regulation 3(2) will get attracted any other law for the time being in force, even if no punishment has been imposed on him, clause (c) of the Regulation will get attracted only if a punishment has been imposed on the person concerned after he has been found guilty of an offence either under the Customs Act, or Central Excise Act or the Finance Act, 1994. ⮚ The interpretation placed by the Ld. Commissioner would lead to absurd res....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of duty'. In any case, it does not employ the expression 'fraudulent evasion of duty or attempt at evasion of duty' which is treated as an offence under Section 135(1)(a). On the other hand, Sections 114AB and 114AC employs the expression "fraud" which is the basis for imposing penalty under those sections. Thus, it becomes clear that even if penalty is imposed under Section 114A of the Act, which would not amount to 'fraudulent evasion of duty'. ⮚ From the order in original dated 14.10.2017 which is the basis of the impugned order not grating the warehousing licence, it is evident that neither there has been any allegation of fraudulent evasion of duty nor there is any finding of fraudulent evasion of duty on the part of the appellant. All that was found was that the appellant violated the mandatory conditions of the notification for which penalty has been imposed under Section 114A of the Act. Thus, when there is no finding of fraudulent evasion of duty' against the appellant, merely because penalty has been imposed on the appellant under Section 114A of the Act, it cannot be said that the appellant has been 'penalised for an offence&#....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e being in force; (c) he has been penalised for an offence under the Act, the Central Excise Act, 1944 (1 of 1944) or Chapter V of the Finance Act, 1994 (32 of 1994); (d) ...... (e) ..... 15. M/s Bhagwati have contended that they cannot be said to have been penalized because they have filed an appeal and the matter is currently under litigation before the Hon'ble Supreme Court with no final adjudication on any alleged violations, and until the judicial process concludes with an adverse ruling, penalty cannot be considered final. In this regard, I find that there is no dispute that M/s Bhagwati have been penalized under Section 114A of the Act vide Order-in-Original No. 66/Commissioner/DDN/2017 Dated 04.10.2017 which has also been upheld by the Hon'ble CESTAT, New Delhi vide Final Order No. 50836/2018 Dated 20.02.2018. The contention of M/s Bhagwati that they cannot be said to have been penalized because they have filed an appeal which is pending has been made without any legal basis and is therefore legally untenable. Until the said order vide which penalty has been imposed on M/s Bhagwati has been quashed by a competent authority, it would b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as well as legal to conclude that if an applicant is penalized for an offence under the Customs Act, 1962, he would be debarred from issue of the license under PWLR, by virtue of the provisions under the Regulation 3(2)(b). 17.3 Now, I proceed to examine the scope of the Regulation 3(2)(c). in light of the aforesaid discussion in respect of the Regulation 3(2)(b). Significantly, the Regulation 3(2)(c) has used the expression "penalized for an offence", instead of "convicted for an offence" used in the Regulation 3(2)(b). This clearly indicates the intention of the legislature that the "offence referred to in the Regulation 3(2)(b) are those violations of law which attract conviction by a criminal court of law, and the "offence" referred to in the Regulation 3(2)(c) are those violations of law which attract imposition of penalty by an authority in a civil proceeding. I therefore hold that the expression "penalized for an offence" used in the Regulation 3(2)(c), must be interpreted to mean "penalized for contravention of any of the provisions". Only such an interpretation would make the clause (c) of the Regulation 3(2) workable. If it is interpreted, as being contended by M....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ereunder or breaches any of the conditions of the license, the Principal Commissioner of Customs or Commissioner of Customs may cancel the license granted under section 57 or section 58 or section 58A: Provided that before any license is cancelled, the licensee shall be given a reasonable opportunity of being heard. (2) The Principal Commissioner of Customs or Commissioner of Customs may, without prejudice to any other action that may be taken against the licensee and the goods under this Act or any other law for the time being in force, suspend operation of the warehouse during the pendency of an enquiry under sub-section (1)." 18. I find that M/s Bhagwati have relied upon various case laws to support their view that the provisions of Regulation 3(2)(c) of the PWLR do not apply on them on the ground that they have been penalized only for contravention of the Act and not for any offence under Chapter XVI of the Act. I now therefore proceed to examine the case laws relied upon by M/s Bhagwati vide their letter dated 13.03.2025 as under 18.1 In the case of M/s Kundan Care Products Limited Vs Commissioner of Customs, New Delhi, supra, the appellant ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e cannot be relied upon. Moreover, as informed by the Additional Commissioner (Review), ACC Export Commissionerate New Delhi, vide letter F.No. GEN/REV/1149/2024-Rev-O/o Commr-CusACC(E) Delhi-I/10529 Dated 20.03.2025 (RUD-14), an appeal has been preferred by the department against the said Final Order No. 56198/2024 dated 31.07.2024 of the Hon'ble CESTAT, New Delhi. Therefore, reliance cannot be placed on the said Order. 18.2 Further, M/s Bhagwati have relied upon the judgment passed by Securities Appellate Tribunal, Mumbai in the case of Reliance Industries Limited, Mr. Mukesh D.Ambani. Navi Mumbai SEZ Pvt. Ltd., Mumbai SEZ Ltd. versus Securities and Exchange Board of India dated 4th December 2023. The Hon'ble Securities Appellate Tribunal have held in their judgment that "There is a distinction between "offence" and "contravention". Consequently, one has to see the intention of the Parliament when it uses the word "offence" or where it uses the word "contravention". Further, it was also discussed that, "We find that parliament was conscious of the usage of the two words "contravention" and "offence" in the SEBI Act and consciously chose to replace "offen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent case the only issue involved is in respect of interpretation of Regulation 3 (2) of the PWLR, which provides for the conditions under which the Licence under Section 58 of the Act, could not have been issued to the appellant. Impugned communications after analysis of the said Regulation has concluded that in case where penalty has been imposed under Section 114A of the Customs Act, 1962, the case would be covered under Regulation 3 (2) (c) and appellant is not eligible for the grant of Licence under Section 58. 4.4 Appellant have submitted by relying on the provisions of General Clauses Act, 1897 (Act X of 1897) to argue that the word offence used in clause 3 (2) (c) refers to offences which are punishable as per the provisions of Section 132, 133, 134 & 135 of Customs Act, 1962, and would not be in respect of the other contraventions for which the penalties have imposed under other provision of the Customs Act, 1962. We are not impressed by the said argument of the appellant. A constitutional bench (five judges) of Hon'ble Supreme Court has in case of Maqbool Hussain [AIR 1953 SUPREME COURT 325=1983 (13) E.L.T. 1284 (S.C.)] observed as follows: "The question that a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ding as to the ownership of the confiscated gold before it could consider the application of the appellant. In the opinion of the High Court the appellant could be said to have been punished only if it were established that he was the owner of the confiscated gold. If he was the owner, the confiscation was a punishment, which would not be so if he was not the owner of the gold. This question of the ownership of the gold was not in our opinion material. The gold was found in the possession of the appellant when he landed at the Santa Cruz airport. The appellant was detained and searched by the Customs Authorities and the gold was seized from his person. Proceedings under section 167(8) were taken by the Customs Authorities and after examining witnesses an order was passed on the 19th December, 1949, confiscating the gold and giving an option to the owner to pay a fine of Rs. 12,000 in lieu of such confiscation under section 183 of the Sea Customs Act. Copy of this order was forwarded to the appellant and for all practical purposes the appellant was treated as the owner of the confiscated gold. ..... The question whether the Sea Customs Authorities when they entertained proc....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... No such power is given to the Customs Collector. Section 181(A) also provides for the detention of packages containing certain publications imported into the States. Section 182 provides that except in the case of certain offences therein mentioned which involve proceedings before a Magistrate confiscation, increased rate of duty or penalty can be adjudged by the Customs Authorities therein mentioned and section 183 provides for option to be given to the owner of the goods confiscated to pay in lieu of confiscation such fine as the officer thinks fit, Section 186 provides that the award of any confiscation, penalty or increased rate of duty under the Act by an officer of Customs is not to prevent the infliction of any punishment to which the person affected thereby is liable under any other law. An appeal is provided under section 188 from a decision or order of the officer of Customs to the Chief Customs Authority who is thereupon to make such further enquiry and pass such order as he thinks fit confirming, altering or annulling the decision or order appealed against. Section 191 provides for a revision by the Central Government on the application of a person aggrieved by any de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....any, lie before the Chief Customs Authority which is the Central Board of Revenue and the power of revision is given to the Central Government which certainly is not a judicial authority. In the matter of the enforcement of the payment of penalty or increased rate of duty also the Customs Officer can only proceed against other goods of the party in the possession of the Customs Authorities. But if such penalty or increased rate of duty cannot be realized therefrom the only thing which he, can do is to notify the matter to the appropriate Magistrate who is the only person empowered to enforce payment as if such penalty or increased rate of duty had been a fine inflicted by himself. The process of recovery can be issued only by the Magistrate and not by the Customs Authority. All these provisions go to show that far from being authorities bound by any rules of evidence or procedure established by law and invested with power to enforce their own judgments or orders the Sea Customs Authorities are merely constituted administrative machinery for the purpose of adjudging confiscation, increased rates of duty and penalty prescribed in the Act. The same view of the functions and powers of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed, (Ch. VII and Ch. VIII); provision is made for the discharge of cargo, (Ch. IX), and clearance of goods for home consumption (Ch. X); provision is also made for warehousing and transhipment., (Chapters XI, XII); provisions are also made for exportation or shipment and re-landing (Ch. XIII); special provisions have been made relating to spirit (Ch. XIV) and coasting trade (Ch. XV). Then comes Ch. XVI dealing with offences and penalties. Offences enumerated in Ch. XVI are of two kinds; first there are contraventions of the Act and rules thereunder which are dealt with by customs officers and the penalty for which is imposed by them. These may be compendiously called customs offences. Besides these there are criminal offences which are dealt with by Magistrates and which result in conviction and sentence of imprisonment and/or fine. These two kinds of offences have been created to ensure that no fraud is committed in the matter of payment of duty and also to ensure that there is no smuggling of goods, without payment of duty or in defiance of any prohibition or restriction imposed under Ch. IV of the Act. 12. It is necessary for our purpose to set out two provisions of Sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iscation whenever found even if this is long after the import is over and even if they are in possession of persons who had nothing to do with the actual import. It is also well-settled by the decisions of this Court that the second part of the penalty relating to any person applies only to a person concerned in the importation or exportation of the goods and does not apply to a person found in possession of the smuggled goods who had nothing to do with the importation or exportation thereof : (see Shivanarayna Mahato v. Collector of Central Excise and Land Customs) C.A. 288 of 1964, decided on August 14, 1965." 4.7 In case of Sharad Gandhi [Order dated February 27, 2019 in Criminal Appeal No(s).174 OF 2019] Hon'ble Supreme Court after taking note of the observations made by constitutional bench in case of Sitaram Aggarawala (para 4.6), observed as follows: "63 ....... Thus, this Court has held that there are custom offences and criminal offences. The criminal offences were dealt with by the Magistrate which may culminate in conviction and imposition of imprisonment and or fine. Thus, this being the scheme of the Sea Customs Act, when Section 5 of the Antiquity....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g body in any matter should be respected. It is not the case where the matters were pending before the quasi judicial authority or appellate authority. When custom authorities grant any license a lot of trust is expressed in the person to whom it is granted on the basis of his antecedents. When final fact finding authority has upheld the penalty imposed upon the appellant then the case of appellant cannot be considered to be covered by the decision of Hon'ble Gujarat High Court in case of Deepak Fertilizers. 4.9 Further appellant have argued that the penalty imposed upon them under Section 114A, is for contravention and cannot be said to be penalty for fraud etc., for which the license under Section 58 can be denied. We do not find any merits in this argument also. Hon'ble Supreme Court has in the case of Rajasthan Spinning and Weaving Mills Ltd. [2009 (238) ELT 3 (SC)] while specifying the nature of penalty under Section 11AC of Central Excise Act, 1944 which pari material with Section 114A of the Act, observed as follows: 17. The main body of Section 11AC lays down the conditions and circumstances that would attract penalty and the various provisos enumerate the condi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The importers have to deal with a multiplicity of agencies viz. carriers, custodians like BPT as well as the Customs. The importer would find it impossible to clear his goods through these agencies without wasting valuable energy and time. The CHA is supposed to safeguard the interests of both the importers and the Customs. A lot of trust is kept in CHA by the importers/exporters as well as by the Government Agencies. To ensure appropriate discharge of such trust, the relevant regulations are framed. Regulation 14 of the CHA Licensing Regulations lists out obligations of the CHA. Any contravention of such obligations even without intent would be sufficient to invite upon the CHA the punishment listed in the Regulations...." We approve the aforesaid observations of the CEGAT, West Zonal Bench, Mumbai and unhesitatingly hold that this misconduct has to be seriously viewed." 4.11 Before closing the discussion on this topic we will also refer to the following decisions of the Hon'ble Supreme Court and High Court: ⮚ Balkrishna Chagan Lal Soni [1983 (13) ELT 1527 (SC)] "16. On the proved facts the gold bar is caught in the criminal coils of Section 13....
X X X X Extracts X X X X
X X X X Extracts X X X X
....case (State v. Drupd AIR 1965 Bom. 6 Para 11 under Section 5, Imports and Exports Control Act : "A serious view must therefore be taken of such offences which show a distressingly growing tendency. The argument that the accused comes from a respectable or high family rather emphasises the seriousness of the malady. If members belonging to high status in life should show scant regard for the laws of this country which are for public good, for protecting our foreign trade or exchange position of currency difficulties, the consequential punishment for the violation of such laws must be equally deterrent. The offences against export and import restrictions and customs are of the species of `economic' crimes which must be curbed effectively." 21. We endorse this approach. It may not be out of place to notice in this context the observations of the Central Law Commission Forty-Seventh Report on "The Trial and Punishment of Social and Economic Offences" against light sentences on the score that : (i) the case is one of first conviction; (ii) that the matter has been already dealt with by severe departmental penalty; (iii) that the convicted per....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ance, a grasp in death of the undercurrents of the world of racketeers and other special features of organised crime." Appeals, in the opinion of the Commission, should only lie to the High Court to secure speedy disposal of the appeals as well as to ensure uniformity in the interpretation of the relevant laws. 10. Therefore, it is necessary to bear in mind, while dealing with the economic offences or `public welfare offences' that they ought to be treated on a level different from ordinary crimes. It is the nation's welfare and economic progress that is the casuality in such crimes. So bearing these things in mind, the legislative armoury has furnished special weapons, such as Section 123 and 11D of the Act, for fighting these welfare offences which affect the health and wealth of the entire community. It is in this light that the Court should approach in evaluating the evidence in cases relating to Public Welfare Offences. ....." ⮚ Gyan Chand Jain [1986 (25) ELT 163 (Mad)] "15. The new horizons is penal treatment with hopeful hues of correction and rehabilitation are statutorily embodied in India in some special enactments; but crimes pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mission of the offence. (2) No person shall be prosecuted and punished for the same offence more than once. (3) No person accused of any offence shall be compelled to be a witness against himself. 4.14 Section 235 of the Code of Criminal Procedure, 1973, deals with judgment of acquittal or conviction in session trials, Section 248 deals with judgment of acquittal or conviction by Magistrates in warrant trial cases and Section 255 deals with judgment of conviction or acquittal in summons triable cases. "Section 235. Judgment of acquittal or conviction - (1) After hearing arguments on points of law (if any), the Judge shall give a judgment in the case. (2) If the accused is convicted, the Judge shall, unless he proceeds in accordance with the provisions of section 360, hear the accused on the question of sentence, and then pass sentence on him according to law. Section 248. Acquittal or conviction - (1) If, in any case under this Chapter in which a charge has been framed, the Magistrate finds the accused not guilty, he shall record an order of acquittal. (2) Where, in any case, under this Chapter, the Magistra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at Regulation 3 (2) (b) is in respect of Offences prescribed in Chapter XVI where in after launch of prosecution, the accused is tried in relevant court and if convicted, a sentence is pronounced determining the quantum of punishment. He has held that Regulation 3 (2) (c) necessarily will be in respect of the Custom Offences as per Chapter XIV of the Act. He has further observed that regulation 3 (2) (b) was not brought to the notice of the bench in the case of Kundan Care, and this aspect which goes to the root of matter escaped the consideration of the bench. We are in total agreement with the observations made by the Commissioner. The interpretation placed by the appellant, would definitely make the Regulation 3 (2) (c) redundant simply for the reason that all the cases then of 3 (2) (c) will be covered by the Regulation 3 (2) (b). It is settled position in law that any statute should be looked as whole and meaning given to every word used by legislature while enacting the same. No provision could be made redundant by interpreting the statute. In case of Sankar Ram And Co vs Kasi Naicker And Others [2003 (11) SCC 699] Hon'ble Supreme Court observed as follows: " .....It....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "Legislation in modern State is actuated with some policy to curb some public evil or to effectuate some public benefit. The legislation is primarily directed to the problems before the Legislature based on information derived from past and present experience. It may also be designed by use of general words to cover similar problems arising in future. But, from the very nature of things, it is impossible to anticipate fully the varied situations arising in future in which the application of the legislation in hand may be called for, and, words chosen to communicate such indefinite 'referents' are bound to be, in many cases lacking in clarity and precision and thus giving rise to controversial questions of construction." 14. An Act of Parliament/Legislature cannot foresee all types of situations and all types of consequences. It is for the Court to see whether a particular case falls within the broad principles of law enacted by the Legislature. Here, the principles of interpretation of statutes come in handy. In spite of the fact that experts in the field assist in drafting the Acts and Rules, there are many occasions where the language used and the phrases employed in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... meaning, the Court has to choose the interpretation which represents the intention of the Legislature. In this connection, the following observations made by this Court in District Mining Officer v. Tata Iron and Steel Co., (2001) 7 SCC 358, may be noticed : "... A statute is an edict of the Legislature and in construing a statute, it is necessary, to seek the intention of its maker. A statute has to be construed according to the intent of them that make it and the duty of the Court is to act upon the true intention of the Legislature. If a statutory provision is open to more than one interpretation the Court has to choose that interpretation which represents the true intention of the Legislature. This task very often raises the difficulties because of various reasons, inasmuch as the words used may not be scientific symbols having any precise or definite meaning and the language may be an imperfect medium to convey one's thought or that the assembly of Legislatures consisting of persons of various shades of opinion purport to convey a meaning which may be obscure. It is impossible even for the most imaginative Legislature to forestall exhaustively situations and circumst....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in view the legislative purpose [Assistant Commissioner, Gadag Sub-Division, Gadag v. Mathapathi Basavannewwa, 1995 (6) SCC 355]. Not only that, if the plain construction leads to anomaly and absurdity, the Court having regard to the hardship and consequences that flow from such a provision can even explain the true intention of the legislation. Having observed general principles applicable to statutory interpretation, it is now time to consider rules of interpretation with respect to taxation. 21. In construing penal statutes and taxation statutes, the Court has to apply strict rule of interpretation. The penal statute which tends to deprive a person of right to life and liberty has to be given strict interpretation or else many innocent might become victims of discretionary decision-making. Insofar as taxation statutes are concerned, Article 265 of the Constitution [265. Taxes not to be imposed save by authority of law - No tax shall be levied or collected except by authority of law.] prohibits the State from extracting tax from the citizens without authority of law. It is axiomatic that taxation statute has to be interpreted strictly because State cannot at their whims ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or equitable considerations, but confines its operation to cases which are clearly within the letter of the statute, as well as within its spirit or reason, not so as to defeat the manifest purpose of the legislature, but so as to resolve all reasonable doubts against the applicability of the statute to the particular case.' Wiliam M. Lile et al., Brief Making and the use of Law Books 343 (Roger W. Cooley & Charles Lesly Ames eds., 3d ed. 1914). "Strict interpretation is an equivocal expression, for it means either literal or narrow. When a provision is ambiguous, one of its meaning may be wider than the other, and the strict (i.e., narrow) sense is not necessarily the strict (i.e., literal) sense." John Salmond, Jurisprudence 171 n. (t) (Glanville L. Williams ed., 10th ed. 1947). 24. As contended by Ms. Pinky Anand, Learned Additional Solicitor General, the principle of literal interpretation and the principle of strict interpretation are sometimes used interchangeably. This principle, however, may not be sustainable in all contexts and situations. There is certainly scope to sustain an argument that all cases of literal interpretation would involve strict rule ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....searching intendment nor drawing any presumption. Furthermore, nothing has to be read into nor should anything be implied other than essential inferences while considering a taxation statute. 26. Justice G.P. Singh, in his treatise 'Principles of Statutory Interpretation' (14th ed. 2016 p.-879) after referring to Re, Micklethwait, (1885) 11 Ex 452; Partington v. A.G., (1869) LR 4 HL 100; Rajasthan Rajya Sahakari Spinning & Ginning Mills Federation Ltd. v. Deputy CIT, Jaipur, (2014) 11 SCC 672, State Bank of Travancore v. Commissioner of Income Tax, (1986) 2 SCC 11 and Cape Brandy Syndicate v. IRC, (1921) 1 KB 64, summed up the law in the following manner - "A taxing statute is to be strictly construed. The well-established rule in the familiar words of LORD WENSLEYDALE, reaffirmed by LORD HALSBURY AND LORD SIMONDS, means : 'The subject is not to be taxed without clear words for that purpose : and also that every Act of Parliament must be read according to the natural construction of its words. In a classic passage LORD CAIRNS stated the principle thus : "If the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardshi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore, if the words used are ambiguous and reasonable open to two interpretations benefit of interpretation is given to the subject [Express Mill v. Municipal Committee, Wardha, AIR 1958 SC 341]. If the Legislature fails to express itself clearly and the taxpayer escapes by not being brought within the letter of the law, no question of unjustness as such arises [CIT v. Jalgaon Electric Supply Co., AIR 1960 SC 1182]. But equitable considerations are not relevant in construing a taxing statute, [CIT, W.B. v. Central India Industries, AIR 1972 SC 397], and similarly logic or reason cannot be of much avail in interpreting a taxing statute [Azam Jha v. Expenditure Tax Officer, Hyderabad, AIR 1972 SC 2319]. It is well-settled that in the field of taxation, hardship or equity has no role to play in determining eligibility to tax and it is for the Legislature to determine the same [Kapil Mohan v. Commr. of Income Tax, Delhi, AIR 1999 SC 573]. Similarly, hardship or equity is not relevant in interpreting provisions imposing stamp duty, which is a tax, and the Court should not concern itself with the intention of the Legislature when the language expressing such intention is plain and unambi....