WP(C) 10/2005 BEFORE THE HON’BLE MR JUSTICE I.A.ANSARI Whether optical fibre, cable and accessories are leviable under the Assam Entry Tax Act, 2001 (in short, ’the Act of 2001’), is the moot question in the present writ petition. This question, in turn, brings one to a more important question and the question is: whether the word ’include’, appearing in the definition c lause of an enactment, shall always be interpreted to have been used for expandi ng the definition of a given term or can the use of the word ’include’ be illus trative, clarificatory or exhaustive ? Yet another question, which the present writ petition raises, is as to how one shall determine if the word ’include’, ap pearing in any definition clause of an enactment, has been used to convey exhaus tiveness and not expansiveness. 2. Bearing in mind the questions, which have been raised in the present wri t petition, let me, now, turn to the material facts leading to this writ petitio n. These facts may be set out as follows: (i) The petitioner, namely, M/s Sterlite Optical Technologies Ltd. is a comp any incorporated under the Companies Act, 1956 and engaged in the manufacture of optical fibre and cables. The respondent No. 1, namely, Oil India Ltd. (in sh ort, ’OIL’) is a Government of India undertaking with respondent No. 2 and 3 as its employees. By an order, dated 02.06.03, issued by respondent No. 3, namely, Deputy General Manager (Pipeline), OIL, the petitioner company was awarded a co ntract for supply of optical fibre, cables and accessories for a total value of Rs. 6,62,67,874/-. In terms of the contract, which the parties concerned had e ntered into, the petitioner company submitted to the respondent No. 1 a bank gua rantee for an amount of Rs. 66,27,788/-, which was equivalent to 10% of the tota l contract value and undertook to fulfill its contractual obligations. The term s and conditions of the contract stipulated that the petitioner company shall su pply to the OIL optical fibre, cables and accessories from outside the State of Assam in the course of ’inter-State’ trade and commerce. By Clause 11 of the te nder document, which became a part of the contract agreement, OIL undertook to i ssue to the petitioner company ’C’ forms after the supplies were made and final payment was released. As optical fiber, cables and accessories were not mention ed specifically in the Schedule to the Act of 2001, respondent No. 1, namely, OI L, sought for clarification from the State Government if optical fibre, cables a nd accessories were items chargeable under the Act of 2001. This clarification was sought for by the respondent No. 1, because of the fact that it was responde nt No. 1, who was to import optical fibre, cables and accessories in terms of th e contract agreement, dated 20.06.2003, aforementioned. Respondent No. 1 also s ought for exemption from payment of entry tax on the said items if the said item s were taxable items under the Act of 2001. By a Notification, dated 21.11.2003 , issued in exercise of its powers under Section 3(3) of the Act of 2001, the Go vernment of Assam, Finance (Taxation) Department, granted exemption from payment of entry tax by the respondent No. 1 on import of optical fibre, cables and acc essories from outside the State of Assam provided that these goods were exclusiv e property of respondent No. 1, the exemption having been so granted on the grou nd that respondent No. 1 is a Government of India enterprise and the said goods are imported for its own use. This notification was made effective for a period of three years from the date of issue thereof. (ii) By, however, his letter, dated 30.12.2003, respondent No. 5, namely, Sup erintendent of Taxes, intimated respondent No. 3, namely, Deputy General Manager (Pipeline), OIL, that optical fibre, cables and other related components were t axable as the same fall within the ambit of taxable items mentioned under Entry 4 of the Schedule to the Act of 2001 and requested accordingly the respondent No . 3 to deduct entry tax, at source, from the petitioner’s bills in terms of the provisions of the Assam General Sales Tax Act, 1993, and deposit, in the Governm ent Treasury, the tax to be so deducted. By yet another communication, dated 19 .01.2004, respondent No. 5 reiterated his direction given to the respondent No. 3 to realize entry tax from the pending bills of the petitioner without delay or else, the respondent No. 5 would initiate proceedings under Section 62A of the Assam General Sales Tax Act, 1993. Later on, in partial modification of its ear lier Notification, dated 21.11.2003, aforementioned (whereby it had granted, to the respondent No. 1, exemption from payment of entry tax on the import of optic al fibers, cables and accessories into the State of Assam), a Notification, date d 14.06.2004, was issued, whereby the Government granted exemption from payment of entry tax on import of optical fiber (and not cables and accessories) from ou tside the State by the respondent No. 1 for its own use provided that the optica l fibers, imported into the State of Assam, were exclusive property of responden t No. 1. This Notification, dated 14.06.2004, was given retrospective effect by making it clear that the exemption, so granted, would be valid for a period of three years with effect from 01.08.03 (and not 14.06.2004, which was the date of the modified notification). By a subsequent Notification, dated 07.07.04, issu ed by the Government of Assam, Finance (Taxation) Department, the Government exe mpted entry tax on import of not only optical fibre but also cables and accessor ies from outside the State by the respondent No. 1 for its own use provided that such goods were exclusive property of respondent No. 1. By this Notification, dated 07.07.2004, the Government cancelled its earlier Notification, dated 14.06 .2004, and made its Notification, dated 07.07.2004, effective from 01.08.2003, m eaning thereby that with effect from 01.08.2003, import of optical fibre, cables and accessories from outside the State of Assam by respondent No. 1 stood exemp ted from payment of entry tax provided that the goods, so imported, were the exc lusive properties of the respondent No. 1. The exemption, so granted, was made v alid for a period of three years with effect from 01.08.2003. Following the Not ification, dated 07.07.2004, aforementioned, respondent No. 2, namely, Manager ( Finance and Accounts), OIL, informed, vide its letter, dated 10.07.2004, respond ent No. 5, namely, Superintendent of Taxes, that optical fibre, cables and acces sories were being imported by respondent No. 1 for its own use and that as the goods, so imported, were exclusive properties of respondent No. 1, no entry tax was payable by respondent No. 1 on the said imported commodities. On his part, respondent No. 5, namely, Superintendent of Taxes, however, issued a Notice, dat ed 17.07.2004, asking the respondent No. 5 to furnish certain information relati ng to the road permit issued by the Department of Taxation for importing the con signment from outside the State. By the letter, dated 17.07.2004, aforementione d, respondent No. 5 further asked the OIL to substantiate their plea that the im port of optical fibre, cables, etc. was done by the OIL. By a letter, dated 12. 08.2004, the OIL informed the Joint Commissioner of Taxes, Guwahati, that the OI L had applied for exemption of entry tax on import of optical fibre, cables, etc . for their own use and acting upon the request, so made by the OIL, the Governm ent had exempted the OIL from payment of entry tax and that the OIL had accordin gly availed of the exemption. As regards the omission to mention anything about the entry tax in the relevant purchase order, the OIL contended, in their lette r 12.08.2004, that the entry tax had not been included in the said purchase orde r under the impression that optical fiber, cables, etc. were non-taxable items u nder the Act of 2001. It was also pointed out by the OIL to the Joint Commissio ner of Taxes, Guwahati, that as a matter of abundant caution, reference had been made, in the purchase order, that the price of cables was inclusive of all prob able charges. (iii) Thereafter, the Government of Assam, vide Notification, dated 30.10.2004 , withdrew the exemption from payment of entry tax on import of optical fibre, c ables and accessories from outside the State granted earlier to the respondent N o. 1, the notification having been given retrospective effect from 01.08.2003 me aning thereby that no import of optical fibre, cables and accessories from outsi de the State of Assam by respondent No. 1 ever stood exempted from payment of en try tax even if such goods were the exclusive property of respondent No. 1 and e ven if such items were imported by the respondent No. 1 for their own use. (iv) Close on the heels of the withdrawal of exemption by the Notification, d ated 30.10.2004, aforementioned, respondent No. 1, vide its communication, dated 17.11.2004, intimated the petitioner company that the petitioner company was li able to pay entry tax of a sum of Rs. 31,00,569/- against the supply of optica l fibre and cables made by the petitioner company. The communication, dated 17.1 1.2004, aforementioned was followed by a reminder, dated 08.12.2004, issued by r espondent No. 2. The petitioner company was also informed by the respondent No. 1 that as the goods had been brought into Assam without payment of entry tax an d the petitioner company was liable to pay entry tax thereon, the respondent No. 1 had deposited with the Government the taxable amount to avoid penal charges a nd accordingly directed the petitioner company to pay the requisite amount immed iately. Since the petitioner company did not pay the amount demanded by the res pondent No. 1 as entry tax, respondent No. 2, namely, Deputy General Manager (Pi peline), OIL, issued a letter, dated 16.12.2004, informing the petitioner compan y that if the payment of the sum of Rs. 31,00,569/- was not made, the authoritie s concerned would be constrained to invoke the performance of the bank guarantee furnished by the petitioner company. (v) In the circumstances, as indicated above, the petitioner company, conten ding, inter alia, that optical fibre, cables and accessories do not fall within the purview of the taxable goods as described under Entry 4 of the Schedule to t he Act of 2001 and, hence, the petitioner company was not liable to pay entry ta x on the said items and that the threat of invoking the bank guarantee by the re spondent No. 1, if permitted, would prejudice the right and interest of the peti tioner company, came to this Court seeking, with the help of the present writ pe tition, appropriate writ or writs setting aside and quashing the communications, dated 30.12.2003, 19.01.2004, 17.11.2004, and 16.12.2004, aforementioned, where by payment of entry tax on the said items were sought to be collected by the res pondents. The petitioner company also sought for appropriate writ or writs sett ing aside and quashing the letter, dated 30.10.2004, whereby the State responden ts had, inter alia, directed the respondent No. 1 to deduct, at source, the amo unt of entry tax from the pending bills of the petitioner company. The petition er had also sought for a writ of mandamus commanding the respondents not to invo ke the said bank guarantee. (vi) While issuing Rule, the Court, on 12.01.2005, passed an interim order al lowing the respondent company to hold the bank guarantee furnished by the petiti oner company with further direction that the petitioner company shall extend the validity of the said bank guarantee if the writ petition was not disposed of ea rlier than November, 2005. In terms of the interim direction, so given, the ban k guarantee stands extended. 3. I have heard Dr. A. K. Saraf, learned Senior counsel for the petitioner, and Mr. R. Dubey, learned counsel, appearing on behalf of respondent Nos. 4, 5, 6 and 7. I have also heard Mr. S. N. Sarma, learned Senior counsel, appearing on behalf of the respondent Nos. 1, 2 and 3. 4. Taking this Court through the provisions of Section 2(b), which defines the term ’entry of goods into a local area’, Section 2(c), which defines ’local area’, and Section 2(d), which defines ’importer’ and also Entry 4 of the Sched ule to the Act of 2001, Dr. Saraf submits that Entry 4 does not include the item s, in question, namely optical fibre, cables and accessories. Drawing attention of this Court to the contents of Entry 4, which reads sound transmitting equip ment including telephones, mobile phones, pagers and component and parts thereof , Dr. Saraf contends that in the expression sound transmitting equipment inclu ding telephones, mobile phones, pagers and component and parts thereof , the wo rd ’including’ has not been used as a word of enlargement; rather, the word ’i ncluding’ has been used, according to Dr. Saraf, in a restricted sense and is exhaustive by nature inasmuch as ’sound transmitting equipment’ would include, u nder Entry 4, only telephones, mobile phones, pagers and component and parts the reof and not any other item, such as, optical fibres, cables and accessories. T he basis, for the submissions so made by Dr. Saraf, is that where two or more wo rds, susceptible of analogous meaning, are clubbed together, they are understood to be used in their cognate sense. They take, as it were, their colour from, a nd are qualified by, each other, the meaning of the general word being restricte d to a sense analogous to that of the less general. In Entry 4, submits Dr. Sar af, the terms included within the expression ’sound transmitting equipment’ are clarificatory and reflects exhaustiveness. Had the intention of the legislature been to bring, within the meaning of Entry 4, all possible sound transmitting e quipments, it was, contends Dr. Saraf, quite unnecessary to specifically mention therein only telephones, mobile phones, pagers and components and parts thereof , for, telephones, mobile phones and pagers, otherwise also, fall within the exp ression ’sound transmitting equipment’. The only purpose, according to Dr. Sara f, in specifying the items ’telephone, mobile phones and pagers and components a nd parts thereof’ is that only these items shall be treated as ’sound transmitti ng equipment’ and shall be exigible to entry tax. Thus, the intention of the l egislature, reiterates Dr. Saraf, is not to include everything that may be regar ded as sound transmitting equipment. Telephones, mobile phones, pagers and comp onents and parts thereof, ordinarily, fall, points out Dr. Saraf, within the exp ression ’sound transmitting equipments’ and, hence, the word ’including’, which has preceded the words ’ telephones, mobile phones, pagers and components and pa rts thereof’ was not meant to expand the meaning of the term ’sound transmittin g equipment’, but was aimed at clarifying as to what items would be included w ithin the expression ’sound transmitting equipment’. Thus, the word ’including’ , emphasizes Dr. Saraf, has been used in Entry 4 in order to give a limited me aning to the expression ’sound transmitting equipment’ and would, therefore, inc lude only telephone, mobile phones, pagers and components and parts thereof and no other item. Support for his submissions is sought to be derived by Dr. Saraf from State of U.P. v. Raja Anand Brahma Shah, reported in (1969) 1 SCR 362, Sou th Gujrat Roofing Tiles Manufacturing Association v. State of Gujrat, (1976) 4 S CC 601, Godfrey Phillip India Ltd., v. State of U.P. (2005) 139 STC 537 and Subh ash and Steel Rolling Industries v. State of Gujarat (1982) 50 STC 305. 5. Controverting the submissions made on behalf of the petitioners, Mr. Dub ey has submitted that optical fibre, cables and accessories are covered by Entry 4 of the Schedule to the Act of 2001 inasmuch as sound transmitting equipment w ould embrace, within its sweep, the optical fibre, cables, joining box, terminat ion box, joining kits which are nothing but paraphernalia of transmitting/receiv ing devices of sound telecommunication. The word ’including’, appearing in Entr y 4, should be read, contends Mr. Dubey, as a word of extension and not as a wor d of limitation. In support of his submissions, Mr. Dubey has placed reliance o n State of Bombay v. Hospital Mazdoor Sabha, reported in 1960 SC 610, CIT Andhra Pradesh v. M/s Tajmahal Hotel, Secunderabad (1971)3 SCC 550 and Regional Direct or, Employees State Insurance Corporation v. High Land Coffee Works of P.F.X. Sa ldanha and Sons (1991) 3 SCC 617. 6. Resisting the submissions made by Mr. Dubey, Dr. Saraf contends that non e of the decisions, which Mr. Dubey relies upon, clarifies as to when the word ’ include’ shall be treated to be expansive or exhaustive. All these decisions, points out Dr. Saraf, merely interpret the given words or items in the context o f the provisions of the relevant statute and should, therefore, be treated to be confined to the facts of the given cases. It is submitted by Dr. Saraf that wh en a word or an item does not, ordinarily, fall within the sweep of a term, whic h an enactment seeks to give by using the word ’include’ or ’including’, such a definition has to be treated as expansive by nature and not exhaustive; wherea s, when the words, which are included within a term, which an enactment seeks to define, ordinarily, also falls within the sweep of the term (which the enactmen t defines), such a definition has to be treated as exhaustive and would, therefo re, include, within the term, which has been defined, only such items, which are sought to be included within the defined term. The decisions, therefore, cited on behalf of the State respondents, are not, according to Dr. Saraf, applicable to the facts of the present case. 7. As far as Mr. S. N. Sarma, learned Senior counsel, appearing on behalf o f the OIL is concerned, his submission is that if this Court holds that optical fibre, cables and accessories are not taxable items under the Act of 2001, the r espondent company may be given the liberty to realize the amount deposited by th em with the State respondents in order to avoid penal charges. Should this Cour t, submits Mr. Sarma, hold that ’optical fibre, cables and accessories’ are tax able items under the Act of 2001, the OIL may be allowed to realize from the wri t petitioners the amount already deposited by the OIL, with the State Government , as entry tax. 8. In the light of the rival submissions made before me on behalf of the pa rties, it is clear, as already indicated above, that the moot question, which fa lls for determination, in the present writ petition, is as to whether optical fi bre, cables and accessories are items covered by the Act of 2001? 9. A search for an answer to the above question brings me to Section 3, whi ch contains the charging provisions. This Section reads as under: 3. Levy of Tax - (1) There shall be levied and collected an entry tax on the e ntry of the goods specified in the Schedule into any local area for consumption , use or sale therein at the rates shown against each item in the said Schedule and such tax shall be paid by every importer of such goods whether he imports s uch goods on his own account or on account of his principal or any other person or takes delivery or is entitled to take delivery of such goods on such entry 10. ’Entry of goods into a local area’ is defined in Section 2(b) of the Act of 2001. Section 2(b) reads, Entry of goods into a local area with all its g rammatical variations and cognate expressions means entry of the goods as specif ied in the Schedule into a local area from any place outside that local area in cluding a place outside the State for consumption, use or sale therein. 11. From a combined reading of Section 3 and Section 2(b) of the Act of 2001 , what becomes abundantly clear, and is, in fact, not in dispute, is that entry tax is leviable only on the goods, which are specified in the Schedule to the Ac t of 2001. 12. While it is contended by the writ petitioners that optical fibre, cables and accessories are not covered by the Schedule to the Act of 2001, the State r espondents contend that these items, being sound transmitting equipments, are co vered by Entry 4 of the Schedule to the Act of 2001. 13. As the controversy, in the present writ petition, relates to the interpr etation of Entry 4, necessary it is that the contents of Entry 4 be put to a coo l and dispassionate analysis for the purpose of determining if the optical fibre , cables and accessories can be held to have been included within the expression ’sound transmitting equipment’. Entry 4 is, therefore, reproduced below: Sound Transmitting equipment including Telephones, mobile phones, pager s and component and parts thereof. 14. From the contents of Entry 4, what becomes transparent is that while def ining the expression ’sound transmitting equipments’, the items, such as, optica l fibre, cables and accessories have not been specifically mentioned as items co vered by the expression ’sound transmitting equipment’. In fact, it is not in d ispute that the items, namely, optical fibre, cables and accessories are not spe cifically mentioned in the Schedule to the Act of 2001. The question, therefore , which needs to be determined is, as to what the word ’including’, appearing in Entry 4, conveys. 15. While it is the contention of the writ petitioners that the word ’includ ing’, which appears in Entry 4, implies limitation and exhaustiveness and that t he expression ’sound transmitting equipment’ shall not be treated to include an y item other than telephones, mobile phones, pagers and components and parts the reof, the State respondents contend that the word ’including’, which appears in Entry 4, has been used by the legislature for the purpose of giving expanded mea ning and would include, within its sweep, all such items, which are sound transm itting equipments and since optical fibre, cables and accessories are sound tran smitting equipments, these items shall be treated to have been automatically inc luded within the meaning of the expression ’sound transmitting equipment’. It a lso needs to be pointed out, at this stage, that the writ petitioners further co ntend that optical fibre, cables and accessories are not sound transmitting equi pments. The State respondents, however, do not agree and contend that optical fi bre, cables and accessories fall within the expression sound transmitting equipm ent. Without entering into the controversy as to whether optical fibre, cables a nd accessories are or are not sound transmitting equipments, let me, first, dete rmine if telephones, mobile phones, pagers and components and parts thereof are the only sound transmitting equipments, which are exigible to entry tax under th e Act of 2001. 16. While considering the above aspect of the case, what needs to be borne i n mind is that though the word ’including’ is, generally, used as a word expres sing enlargement, it may have to be, in a given context, construed to have been used in a restricted sense. Where the term ’including’ is used as an extending force, it adds to the word or phrase a meaning, which naturally does not belong to such word or phrase. The use of the word ’including’ in the restrictive