TaxTMI 
TaxTMI 
2023 (9) TMI 1731
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....teral meaning? (2) Whether it was permissible for the Tribunal to deviate from the view taken in the previous years and deny exemption in absence of any material change in the facts and circumstances of the appellant's case and act contrary to the law settled by the Hon'ble Supreme Court in the case reported in 193 ITR 321 (SC) followed by the Delhi High Court in 264 ITR 276 (Del)? 3. The aforesaid questions arise in the context of the exemption granted by the State Government under Section 7 of the Bihar Finance Act, 1981(for brevity 'the Act of 1981'). Sub-section (3) of the Section 7 empowers the State Government by notification and subject to such conditions or restrictions as it may impose, to exempt sale or purchase of any goods or class of description of goods or dealers from payment of tax. The State Government has brought out a notification dated 01.09.1993, including Serial No. 29 under the Schedule of the Act of 1981, wherein 'condoms and all types of oral contraceptives pills' were granted exemption from payment of tax. 4. The assessee is concerned with two variants of an Intrauterine Device (for brevity, IUD) used by females for the purpose of co....
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....isions of the Act and when there are two views possible, the authority should lean in favour of the assessee and also in the context of difference of opinion from the earlier years, the benefit should go to the subject. For further buttressing the contention of purposive interpretation reliance is placed on Abhiram Singh v. C.D. Commachen, (2017) 2 SCC 629 and Commr. of Customs v. Dilip Kumar & Co., (2018) 9 SCC 1. 8. The learned Advocate General Shri. P.K. Shahi appearing for the State cautions this Court from transgressing beyond the scope and ambit of the words employed in the exemption notification. An exemption notification as has been held by the Hon'ble Supreme Court has to be construed very strictly and only if, the subjects fall under it would the benefit of exemption be conferred. In the present case the contraceptive pills sold by the assessee has been granted exemption and in the earlier years the Assessing Officers had erroneously granted exemption to the assessee for the device used by females for contraception; which was not included in the exemption notification. The submission of the learned Senior Counsel of the assessee that the product was introduced in 1997,....
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....taken from that taken in the earlier years. We have to specifically notice that the question raised was exemption, with respect to the nature and constitution of the assessee. The authorities had over the years found the assessee to be entitled to an exemption and there has been no change in circumstances; in the nature of the activities carried on by the trust or in its constitution, which led to the said dictum being laid down. As is trite there can be no dictum, completely divorced from the facts. 11. The decision in A.R.J. Security Printers (supra) by the Delhi High Court, was also on whether the printing of lottery tickets, can be said to be an industrial undertaking entitled to a deduction under Section 80-I of the Act, which again is on the aspect of the nature of the industry carried on. Prem Kumar Chopra (supra) was a decision in which two inconsistent decisions on the same subject matter were passed for the successive years which fact is distinct from the present case and will not be applicable, herein. 12. Herein, the question raised is of the interpretation of the specific words employed in the exemption notification. The principle which would be applicable is tha....
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....e no doubt, in our opinion, that having regard to the language used it would not be in consonance with the spirit and the reason of law to give exemption for non-alcoholic beverage bases under the notification in question. Bearing the aforesaid purpose, in our opinion, it cannot be contended that expensive items like Gold-Spot base, Limca-base or Thums up - base were intended to be given exemption at the cost of public exchequer." (Emphasis by underlining, supplied by us) 14. We emphasize the declaration made by the Hon'ble Supreme Court that having regard to the language used in the exemption notification, it would not be in consonance with the spirit and the reason of law to give exemption to nonalcoholic beverage bases, under the notification in question. It has to be observed that the said finding was rendered after noticing the well settled principle that when two views regarding a notification are possible, it should be construed in favour of the subject. However, when there is an exception to the general rule of taxation, it has to be construed strictly against those who invoke its benefit, but once the assessee or the goods fall under the exemption, there should be a ....
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....ty in the exemption clause in a notification should lean in favour of the revenue; unless the assessee clearly demonstrates that it squarely falls within the parameters enumerated in the exemption notification and satisfies all the conditions precedent, for availing such exemption. 17. The declaration in Sun Export Corporation (supra), that the ambiguity in an exemption notification should be interpreted in favour of the assessee was held to be contrary to the binding precedents on the subject. Novopan India Ltd. v. Collector of Central Excise and Customs, (1994) Supp (3) SCC 606, a three-Judge Bench decision was extracted from. It was held: "The principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee - assuming that the said principle is good and sound - does not apply to the construction of an exception or an exempting provision, they have to be construed strictly. A person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision. In case of doubt or ambiguity, benefit of it must go to the State." The reference was answered holding ....
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....n and once ambiguity or doubt about the applicability is effaced and the subject falls within the four corners of the notification, then full play should be given to it and then there should be a wider and liberal construction. As far as a purposive interpretation is concerned it is an aid to interpretation resorted to, when there is an ambiguity in the words employed. 20. The minority opinion of the Chairman of the Tribunal looked at the objective, which was stated to be family planning and also the definition of the word 'condom'; which as per the Oxford Learner's Dictionary, January, 2000 edition, contains the word female condoms also. It was found that there was no reason to interpret the word 'condom' with a gender bias and whoever uses it, the contraceptive character of the same is relevant to consider the exemption and it does not necessarily go by the user. It was also found that in the earlier years the tax authorities have been granting exemption for the very same product and hence, they are estopped from finding otherwise, especially in the context of there being no change in factual circumstances. 21. The majority view found that the principles of res judicata doe....