Case: Collector Of Central Excise, Bombay-I &amp; Anr Vs. Parle Exports (P) Ltd

construe, execute and apply the said enactmentsHow then should the courts proceed ? The expressions in the Schedule and in the notification for exemption should be understood by the language employed therein bearing in mind the context in which the expressions occur. The words used in the provision imposing taxes or granting exemption should be understood in the same way in which these are understood in ordinary parlance in the area in which the law is in force or by the people who ordinarily deal with them It is, however, necessary to bear in mind certain principles. The notification in this case was issued under rule 8 of the Central Excise Rules and should be read along with the Act. The notification must be read as a whole in the context of the other relevant provisions. When a notification is issued in accordance with the power conferred by the statute, it has statutory force and validity and, therefore, the exemption under the notification is, as if it were contained in the Act itself. See in this connection, the observations of this court in Orient Weaving Mills (P.) Ltd. v. Union of India [1962] Supp 3 SCR 481. See also Kailash Nath v. State of U. P. [1957] 8 STC 358 (SC) ; AIR 1957 SC 790 . The principle is well-settled that when two views of notification are possible, it should be construed in favour of the subject as notification is part of a fiscal enactment. But, in this connection, it is well to remember the observations of the Judicial Committee in Carolin M. Armytage v. Frederick Wilkinson [1878] 3 AC 355 at 370 (PC) that it is only, however, in the event of there being a real difficulty in ascertaining the meaning of a particular enactment that the question of strictness or of liberality of construction arises. The Judicial Committee reiterated in the said decision at page 369 of the report that, in a taxing Act, provisions establishing an exception to the general rule of taxation are to be construed strictly against those who invoke its benefit. While interpreting an exemption clause, liberal interpretation should be imparted to the language thereof, provided no violence is done to the language employed. It must, however, be borne in mind that absurd results of construction should be avoidedIn Hindustan Aluminium Corporation Ltd. v. State of Uttar Pradesh [1981] 48 STC 411 ; [1982] 1 SCR 129 this court emphasised that the notification should not only be confined to its grammatical or ordinary parlance but it should also be construed in the light of the context. This court reiterated that the expression should be construed in manner in which similar expressions have been employed by those who framed the relevant notification. The court emphasised the need to derive the intent from a contextual scheme. In this case, therefore, it is necessary to endeavour to find out the true intent of the expressions "food products and food preparations, " having regard to the object and the purpose for which the exemption is granted bearing in mind the context and also taking note of the literal or common parlance meaning by those who deal with those goods, of course bearing in mind that, in case of doubt only, it should be resolved in favour of the assessee or the dealer, avoiding, however, an absurd meaning. Bearing the aforesaid principles in mind, in our opinion, the Revenue is right that the non-alcoholic beverage bases in India cannot be treated or understood as new "nutritive material absorbed or taken into the body of an organism which serves for the purpose of growth, work or repair and for the maintenance of the vital, process" and an average Indian will not treat non-alcoholic beverage bases as food products or food preparations in that light. 12. We have also noted how these goods were treated by the Government as mentioned hereinbefore. There is no direct evidence as such as to how, in commercial parlance, unlike in ordinary parlance, non-alcoholic beverage bases are treated or whether they are treated as food products or food preparations. The purpose of exemption is to encourage food production and also give a boost to the production of goods in common use and need. After all, the purpose of exemption is to help production of food and food preparations at a cheaper price and also help production of items which are in common use and need like electric light and powerThe question of interpretation involves determining the meaning of text contained in one or more documents. Judges are often criticised for being tied too closely to statutory words and for failing to give effect to the intention of Parliament or the law-maker. Such language, it has been said, in Crosss Statutory Interpretation (second edition) at page 21, appears to suggest that there are two units of enquiry in statutory interpretation the statutory text and the intention of Parliament and the judge must seek to harmonise the two. This, however, is not correct. According to the tradition of our law, primacy is to be given to the text in which the intention of the law-giver has been expressed. Cross refers to Blackstones observations that the fairest and most rational method to interpret the will of the law-maker is by exploring his intentions at the time when the law was made, by signs the most natural and probable. And these signs are either the words, the context, the subject-matter, the effects and consequences or the spirit and reason of the law. We have 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 the public exchequer. 13.

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

Explanation:
1[ds]We have also noted how these goods were treated by the Government as mentioned hereinbefore. There is no direct evidence as such as to how, in commercial parlance, unlike in ordinary parlance, non-alcoholic beverage bases are treated or whether they are treated as food products or food preparations. The purpose of exemption is to encourage food production and also give a boost to the production of goods in common use and need. After all, the purpose of exemption is to help production of food and food preparations at a cheaper price and also help production of items which are in common use and need like electric light and powerThe question of interpretation involves determining the meaning of text contained in one or more documents. Judges are often criticised for being tied too closely to statutory words and for failing to give effect to the intention of Parliament or the law-maker. Such language, it has been said, in Crosss Statutory Interpretation (second edition) at page 21, appears to suggest that there are two units of enquiry in statutory interpretation the statutory text and the intention of Parliament and the judge must seek to harmonise the two. This, however, is not correct. According to the tradition of our law, primacy is to be given to the text in which the intention of the law-giver has been expressed. Cross refers to Blackstones observations that the fairest and most rational method to interpret the will of the law-maker is by exploring his intentions at the time when the law was made, by signs the most natural and probable. And these signs are either the words, the context, the subject-matter, the effects and consequences or the spirit and reason of the law. We have 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 the public exchequerFor the aforesaid reasons, the appeals have to be allowed and the decision of the Tribunal reversed. We, however, need not go into the question of penalty as well as the question of limitation which have been left open by the Tribunal in its order. It will be open for the parties to urge these points afresh before the Tribunal. We express no opinion on these aspects.The appeals to the extent indicated above are allowed. There will, however, be no order as to costs. Appeals allowed.