Case: Innamuri Gopalam and Maddala Nagendrudu and Others Vs. State of Andhra Pradesh and Another

Bill but to such goods as fall within the entirely of that taxing provision and in respect of which therefore the additional duty would be leviable, for in respect of cotton fabrics produced in India per se or simpliciter no excise duty would be leviable unless they are at the premises which are specified in the latter portion of clause 3(1) of the Bill. Both these conditions are necessary to exist before the duty of excise is "leviable" and when the proviso therefore uses the words "any class of such goods" it could only refer to the class of goods named in the 1st para of clause 3(1) - lying, stored or stocked in the places referred to in the concluding portion of the clause.There is another aspect from which this question of construction could be viewed. It cannot be disputed that the proviso and the conditions appended thereto form an integral part thereof. It is obvious that where the proviso operates it would be open to the dealer affected by it to pay the additional duty and establish that he has paid such duty and thereby entitle himself to the exemption. In other words, it cannot be that the proviso excludes the exemption but in circumstances in which the conditions cannot be fulfilled. The conditions themselves would thus throw light upon the words of the proviso, and when the proviso is read with the conditions of which they are an integral part, the conclusion is inescapable that the word "leviable" used in the proviso means that in respect of the goods specified as regards which he claims exemption from the payment of sales tax there was a liability upon him to pay the additional excise duty under clause 3 of the Bill for it was only in that event he would be able to prove to the assessing authorities that additional duty has been levied and collected from him.7. Learned counsel for the respondent also repeated before us the other line of argument which the High Court accepted, viz., that the notification of Government in granting the exemption was to avoid double taxation, viz., of liability to pay both the excise duty as well as the sales tax, and that as in the present case the appellants were admittedly not bound to pay the additional excise duty they could make no claim to the benefit of the exemption either. We do not feel persuaded to accept this argument. No doubt, statutes have to be construed as a whole so as to avoid any inconsistency or repugnancy among its several provisions, but if there is nothing to modify, nothing to alter, or nothing to qualify the language of a statute, the words and sentences have to be construed in their ordinary and natural meaning (vide 36 Hals. (3rd Edn.) s. 585). What we are now concerned with is a fiscal provision and it has often been said that there is no equity in a taxing statute and either the subject is within it or not, on the words of the enactment or the rules validly made thereunder. In a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the words of the provision. If the taxpayer is within the plain terms of the exemption he cannot be denied its benefit by calling in aid any supposed intention of the exemption authority. It such intention can be gathered from the construction of the words of the statute or rule or by necessary implication therefrom, the matter is different, but that is not the position here. In this connection we might refer to the observations of Lord Watson in Salomon v. Salomon and Co. ([1897) A.C. 22 at p. 38) :"Intention of the Legislature is a common but very slippery phrase, which, popularly understood, may signify anything from intention embodied in positive enactment to speculative opinion as to what the Legislature probably would have meant, although there has been an omission to enact it. In a Court of Law or Equity, what the legislature intended to be done or not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implication."8. Learned counsel for the State is possibly right in the submission that the object behind the framers of the notification was to avoid double taxable but the operation of an enactment or of a notification has to be judged not by the object which the Legislature or the notifying authority, as the case may be, may have had in mind but by the words which it has employed to effectuate the legislative intent. In the case before us the operative words of the notification are to be found in the 1st paragraph granting the exemption and it was not disputed that the appellants were within that provision. The next question would be as to whether the exemption to which the appellants were manifestly entitled under the 1st paragraph of the notification they have been deprived of by the operation of the proviso. If the proviso on its proper construction, as we have endeavoured to point out earlier, cannot apply to cases where an additional duty of excise is not leviable under clause 3 of the Bill it would follow that the operation of the exemption is unaffected by the proviso. The appellants were therefore entitled to the relief from sales tax granted by the notification dated December 13, 1957.9. In the writ petition which they filed to the High Court they prayed for a declaration that certain provisions of the Andhra Pradesh Act VI of 1957 were ultra vires of the Constitution of India. As stated earlier, this point about the constitutional invalidity of the Act was abandoned in this Court and the argument before us was confined wholly to their claim to exemption under the notification.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]This submission has to be accepted and be heard no serious argument againstargument was that "textile goods" were "a class of goods" in respect of which an additional duty was leviable, though by reason of their location, viz., not being within the precincts of a factory, warehouse etc., no duty could be levied and that consequently unless condition (1) to the proviso was satisfied the exemption could not be claimed. The learned Judges accepted this argument, but with great respect to them, it appears to us that they were in error in doing so. In the first place, "the class of goods" referred to in the proviso to the notification are such that in respect of them duties of excise are leviable. If, therefore, in respect of a class of goods such duties are not leviable because of the situs in which they are lying or are stocked, they would not be the class of goods in respect of which duties of excise are leviable, for the essential condition for the proviso to be brought into operation is the liability of the goods to the levy of the additional duty. It therefore appears to us that the expression "class of such goods" has to be understood as being a reference not merely to the goods specified in the opening words of clause 3(1) of the Bill but to such goods as fall within the entirely of that taxing provision and in respect of which therefore the additional duty would be leviable, for in respect of cotton fabrics produced in India per se or simpliciter no excise duty would be leviable unless they are at the premises which are specified in the latter portion of clause 3(1) of the Bill. Both these conditions are necessary to exist before the duty of excise is "leviable" and when the proviso therefore uses the words "any class of such goods" it could only refer to the class of goods named in the 1st para of clause 3(1)lying, stored or stocked in the places referred to in the concluding portion of the clause.There is another aspect from which this question of construction could be viewed. It cannot be disputed that the proviso and the conditions appended thereto form an integral part thereof. It is obvious that where the proviso operates it would be open to the dealer affected by it to pay the additional duty and establish that he has paid such duty and thereby entitle himself to the exemption. In other words, it cannot be that the proviso excludes the exemption but in circumstances in which the conditions cannot be fulfilled. The conditions themselves would thus throw light upon the words of the proviso, and when the proviso is read with the conditions of which they are an integral part, the conclusion is inescapable that the word "leviable" used in the proviso means that in respect of the goods specified as regards which he claims exemption from the payment of sales tax there was a liability upon him to pay the additional excise duty under clause 3 of the Bill for it was only in that event he would be able to prove to the assessing authorities that additional duty has been levied and collected from him.We do not feel persuaded to accept this argument. No doubt, statutes have to be construed as a whole so as to avoid any inconsistency or repugnancy among its several provisions, but if there is nothing to modify, nothing to alter, or nothing to qualify the language of a statute, the words and sentences have to be construed in their ordinary and natural meaning (vide 36 Hals. (3rd Edn.) s. 585). What we are now concerned with is a fiscal provision and it has often been said that there is no equity in a taxing statute and either the subject is within it or not, on the words of the enactment or the rules validly made thereunder. In a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the words of the provision. If the taxpayer is within the plain terms of the exemption he cannot be denied its benefit by calling in aid any supposed intention of the exemption authority. It such intention can be gathered from the construction of the words of the statute or rule or by necessary implication therefrom, the matter is different, but that is not the position here. In this connection we might refer to the observations of Lord Watson in Salomon v. Salomon and Co. ([1897) A.C. 22 at p.d counsel for the State is possibly right in the submission that the object behind the framers of the notification was to avoid double taxable but the operation of an enactment or of a notification has to be judged not by the object which the Legislature or the notifying authority, as the case may be, may have had in mind but by the words which it has employed to effectuate the legislative intent.In the case before us the operative words of the notification are to be found in the 1st paragraph granting the exemption and it was not disputed that the appellants were within that provision.the proviso on its proper construction, as we have endeavoured to point out earlier, cannot apply to cases where an additional duty of excise is not leviable under clause 3 of the Bill it would follow that the operation of the exemption is unaffected by the proviso. The appellants were therefore entitled to the relief from sales tax granted by the notification dated December 13, 1957.9. In the writ petition which they filed to the High Court they prayed for a declaration that certain provisions of the Andhra Pradesh Act VI of 1957 were ultra vires of the Constitution of India. As stated earlier, this point about the constitutional invalidity of the Act was abandoned in this Court and the argument before us was confined wholly to their claim to exemption under the notification.