IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE A.K.BASHEER WEDNESDAY, THE 17TH SEPTEMBER 2008 / 26TH BHADRA 1930 W.A.No. 1844 of 2008 ----------------------------------- AGAINST THE JUDGEMENT IN OP.30509/1999 DATED 19/12/2007 .................... APPELLANT/PETITIONER IN O.P: ----------------------------------------------- J.K.TYRE INDUSTRIES LIMITED, (FORMERLY VIKRANT TYRES LTD), MARYMATHA SHOPPING COMPLEX, L.P.S.ROAD, PALARIVATTOM, KOCHI - 682 025. BY ADV. SRI.M.PATHROSE MATTHAI (SR.) & SRI.SAJI VARGHESE RESPONDENTS/RESPONDENTS IN O.P: --------------------------------------------------------- 1. STATE OF KERALA, REPRESENTED BY CHIEF SECRETARY, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. THE ASSISTANT COMMISSIONER (ASSESSMENT) SPECIAL CIRCLE, COCHIN - 682 015. 3. THE SPECIAL TAHSILDAR, REVENUE RECOVERY, ERNAKULAM. BY SPECIAL GOVERNMENT PLEADER SRI.VINOD CHANDRAN THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 17/09/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: H.L.DATTU, C.J. & A.K.BASHEER, J. ------------------------------------------- W.A. No. 1844 of 2008 ------------------------------------------ Dated, this the 17th day of September, 2008 JUDGMENT H.L.Dattu, C.J. This writ appeal is directed against the orders passed by the learned Single Judge in O.P. No.30509 of 1999 dated 19th December, 2007. (2) The appellant is a Company. It is incorporated under the provisions of the Companies Act. (3) In the original petition filed, the Company had called in question the vires of a part of Section 23A(1) of the Kerala General Sales Tax Act, 1963 (hereinafter for the sake of brevity referred to as 'the Act') on the ground that the said provision is unconstitutional, arbitrary, discriminatory, and violative of Article 14 of the Constitution of India. (4) Before the learned Single Judge, the learned senior counsel for the petitioner had referred to various case laws rendered by the apex Court as well as this Court and had submitted that the denial of benefit of reduced rate of interest to public limited companies is arbitrary, discriminatory and violative of Article 14 of the Constitution. (5) The learned Judge being of the opinion that the W.A.No.1844 of 2008 2 impugned provision is neither arbitrary nor violative of Article 14 of the Constitution of India, has rejected the original petition. Correctness or otherwise of the said order passed by the learned Single Judge is the subject matter of this writ appeal. (6) Sri.M.Pathros Mathai, learned senior counsel appearing for the appellant, would submit, that, the impugned provision clearly discriminates the Public Limited Companies incorporated under the provisions of the Companies Act and the other dealers, including small scale industrial units and the works contractors. According to him, the State Legislature while introducing Section 23A of the Act ought to have treated all the dealers under the Act as one group and should have extended the same benefit to the Public Limited Companies incorporated under the provisions of the Companies Act as has been granted to small scale industrial units including the works contractors. (7) Omitting what is not necessary for the purpose of this case, the relevant portion of Section 23A(1) of the Act is extracted. It reads as under:- “23A. Reduction of interest in certain cases.- (1) Notwithstanding anything contained in this Act or in any judgment, decree or order of any Court or Tribunal, a dealer other than a company not being a small scale industrial unit or a works contractor referred to in W.A.No.1844 of 2008 3 sub-section (7AAAA) of Section 7, who is in arrears to pay tax or other amount due under this Act for the period ending on the 31st day of March, 1997 shall be entitled to a reduction of sixty per cent of the amount of interest accrued on such tax or other amount under sub-section (3) of Section 23.” (8) Sub-section (1) of Section 23A provides for payment of interest levied under Section 23(3) of the Act at the reduced rate to a dealer registered under KGST Act other than a company. The said benefit is also extended to small scale industrial unit and works contractor referred to in sub-section (7AAAA) of Section 7, who are in arrears of tax or any other amount due under the Act for the period ending on the 31st day of March, 1997. (9) In C.S.T. vs. Modi Sugar Mills Ltd., AIR 1961 SC 1047, the Supreme Court has observed: “In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can the taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the Statute and interpret them. It must interpret the taxing statute in the light of what is clearly expressed; it cannot imply anything which is not expressed, it cannot import provisions in the statute so as to supply any assumed deficiency”. W.A.No.1844 of 2008 4 (10). In CST, Uttar Pradesh vs. Parson Tools and Plants, Kanpur, AIR 1975 SC 1039, the Apex Court has observed: “Where the legislature clearly declares its intent in the scheme and language of a Statute, it is the duty of the court to give full effect to the same without scanning its wisdom or policy, and without engrafting, adding or implying anything which is not congenial to or consistent with such expressed intent of the law given; more so if the statute is a taxing statute”. (11). It is now well settled law, that, there is always a presumption in favour of the Constitutionality of a Statute and the burden is upon who attacks it, to show that there has been clear transgression of the constitutional principles. The presumption of constitutionality is so strong that in order to sustain it, the court may take into consideration matters of common knowledge, matters of common report, the history of the time and may assume every state of facts which can be conceived existing at the time of legislation. (12). Taxation laws are generally challenged under Part III of the Constitution invoking Article 14 as offending the rule of equality before law, arbitrary, discriminatory etc. Keeping this in view, Sri.Pathros Mathai, learned senior counsel would contend, that, the legislature while granting benefit of payment of reduced interest levied W.A.No.1844 of 2008 5 under Section 23 (3) of the Act to certain class of dealers has denied that benefit to public limited companies, and therefore, the classification is not based on any intelligible differentia and therefore, violative of Article 14 of the Constitution. (13). The tests adopted to determine whether a classification is reasonable or not, are, that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the the group; and that the differentia must have a rational relation to the object sought to be achieved by statute in question. In the impugned legislation, the legislature has kept out the public limited companies, while giving benefit of payment of reduced interest to dealers under the KGST Act including small scale industrial units and works contractors. The public limited companies are separate class, though they are also dealers under the Act. Merely because the provisions provides for payment of reduced interest only to one set of dealers and not others who do not fall within that range of dealers, the provision cannot be dubbed as either arbitrary or discriminatory. (14) As we have already noticed, the petitioner is a Company and it has the assistance of its legal experts and the chartered accountants. It is expected of them to pay the tax under the Act well within the time prescribed under the provisions of the Act. The same W.A.No.1844 of 2008 6 facility may not be available to the other small scale industrial units. Therefore, the Legislature has thought it fit to give them an opportunity to pay the interest at the reduced rate. Since, in our view, equals are treated equally and unequals are treated unequally, and since there is intelligible differentia while making the classification, it may not be possible for us to direct the State Government to extend the same benefit as has been given to the other dealers including the small scale industrial units or the work contractors. (15) In that view of the matter, we do not see any error in the orders passed by the learned Single Judge which would call for our interference in appeal. Therefore, the writ appeal requires to be rejected and it is rejected. Ordered accordingly. (H.L.DATTU) CHIEF JUSTICE (A.K.BASHEER), JUDGE vns/dk