Case: The State of Maharashtra Vs. Shri Vile Parle Kelvani Mandal &amp; Ors

2. That the original writ petitioners are the education institutions run and manage by original writ petitioner No.1 – Shri Vile Parle Kelvani Mandal, a society registered under the Societies Registration Act, 1860 and also a public charitable trust registered under the Maharashtra Public Trusts Act, 1950. That the writ petitioners have taken electricity connections for power supply to their education institutions from respective power supply companies. That prior to 01.09.2016, the charitable education institutions were exempted from payment of electricity duty levied on the consumption charges or the energy consumption for the purposes of or in respect of a school or college or institution imparting education or training, students hostels, hospitals, nursing homes etc. as per Section 3(2)(iii) of the Maharashtra Electricity Duty Act, 1958. That in the year 2018, the respective electricity supply companies levied the electricity duty pursuant to a letter from the Industries, Energy and Labour Department, Government of Maharashtra stating that as per Maharashtra Electricity Act, 2016, charitable institutions registered under the Bombay Public Trusts Act, 1950 (now known as Maharashtra Public Trusts Act, 1950) for the purpose of or in respect of school or college imparting education or training in academic or technical subjects are not entitled for electricity duty exemption with effect from 1st September, 2016. The respective power supply companies levied electricity duty at 21% and the bills were raised accordingly on original writ petitioners and their education institutions for the period post 01.09.2016. Aggrieved by the levy of electricity duty on the educational charitable institutions run by the original writ petitioner No.1 – respondent No.1 herein, original writ petitioners preferred the writ petition before the High Court. By the impugned judgment and order, the Division Bench of the High Court has allowed the said writ petition and has set aside the levy of electricity duty on writ petitioners and consequently has set aside respective electricity bills levying the electricity duty on consumption of electricity charge.3. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court, the State of Maharashtra has preferred the present appeal.

Reasoning: 9.1 In the case of Dilip Kumar & Company (supra), five-judge bench of this Court has held that in every taxing statute –– the charging, the computation and exemption provisions at the threshold stage should be interpreted strictly. In case of ambiguity in case of charging provision, the benefit necessarily must go into favour of the subject/assessee. This means that the subject of tax, the person liable to pay tax and the rate at which the tax is to be levied have to be interpreted and construed strictly. If there is any ambiguity in any of these three components, no tax can be levied till the ambiguity or defect was removed by the legislature [See pages 53 to 55 in Dilip Kumar & Company]. However, in case of exemption notification or clause, same is to be allowed based wholly by the language of the notification, and exemption cannot be gathered by necessary implication, or on a construction different from the words used by reference to the object and purpose of granting exemption [See Hansraj Gordhandas Vs. H.H. Dave, Assistant Collector of Central Excise Customs, Surat & Ors., AIR 1970 SC 755 ]. Further its for the assessee to show by construction of the exemption clause/notification that it comes within the purview of exemption. The assessee/citizen cannot rely on ambiguity or doubt to claim benefit of exemption. The rationale is not to widen the ambit at the stage of applicability. However, once the hurdle is crossed, the notification is constructed liberally [See Collector of Central Excise, Bombay-I & Anr. vs. Parle Exports (P) Ltd., (1989) 1 SCC 345  and Union of India & Ors. vs. Wood Papers Ltd. & Anr., (1998) 4 SCC 256] . Thus, distinction can be made between the substantive requirements that require strict compliance – non-compliance of which would render the assessee ineligible to claim exemption, and the procedural or compliance provision which can be interpreted liberally [See paragraphs 64 to 65 in Dilip Kumar & Company].9.4 In the case of Giridhar G. Yadalam (supra), it is observed and held that in taxing statute, it is the plain language of the provision that has to be preferred where language is plain and is capable of one definite meaning. It is further observed that the strict interpretation to the exemption provision is to be accorded. It is observed that the purposive interpretation can be given only when there is some ambiguity in the language of the statutory provision or it leads to absurd results. In paragraph 16, it is observed and held as under:-16. We have already pointed out that on the plain language of the provision in question, the benefit of the said clause would be applicable only in respect of the building which has been constructed. The expression has been constructed obviously cannot include within its sweep a building which is not fully constructed or in the process of construction. The opening words of clause (ii) also become important in this behalf, where it is stated that the land occupied by any building. The land cannot be treated to be occupied by a building where it is still under construction. If the contention of Mr Jain is accepted, an assessee would become entitled to the benefit of the said clause, at that very moment, the commencement of construction even with construction the moment one brick is laid. It would be too far-fetched, in such a situation, to say that the land stands occupied by a building that has been constructed thereon. Even Mr Jain was candid in accepting that when the construction of building is still going on and is not completed, literally speaking, it cannot be said that the building has been constructed. It is for this reason that he wanted us to give the benefit of this provision even in such cases by reading the expression to mean the same as is being constructed. His submission was that the moment construction starts the urban land is put to productive use and that entitles the land from exemption of wealth tax. This argument of giving so-called purposive interpretation has to be rejected for more than one reasons. These are:(i) In taxing statute, it is the plain language of the provision that has to be preferred where language is plain and is capable of one definite meaning.(ii) Strict interpretation to the exemption provision is to be accorded, which is the case at hand.(iii) The purposive interpretation can be given only when there is some ambiguity in the language of the statutory provision or it leads to absurd results. We do not find it to be so in the present case.9.5 In the case of Godrej & Boyce Mfg. Co. Ltd. (supra), it is observed and held by this Court that where the words of the statute are clear and unambiguous, recourse cannot be had to principles of interpretation other than the literal view. It is further observed that it is the bounden duty and obligation of the court to interpret the statute as it is. It is further observed that it is contrary to all rules of construction to read words into a statute which the legislature in its wisdom has deliberately not incorporated.11.1 As per Section 16 of the 2016 Act, on coming into force the 2016 Act, the Maharashtra Electricity Duty Act, 1958 stood repealed subject to the eventualities mentioned in Section 16 of the 2016 Act. None of the eventuality mentioned in proviso to Section 16 shall be attracted and/or applicable to the facts of the case on hand in view of the specific provisions providing for exemption from payment of the electricity duty as per sub-section (2) of Section 3 of the 2016 Act. Therefore, for the purpose of exemption from payment of electricity duty on and after 01.09.2016, sub- section (2) of Section 3 of the 2016 Act shall have to be applied and shall be applicable.11.4 On true interpretation of Section 3(2)(iii), under 2016 Act, electricity duty on the consumption of charges or energy consumed for the purposes of, or in respect of a school or college or institution imparting education or training, students, hostels………….run by any local bodies shall alone be exempted from levy of electricity duty and the State Government and Central Government are also specifically excluded from payment of electricity duty. However, the public sector undertakings are not exempted from payment of electricity Act. Therefore, under Section 3(2) of the 2016 Act, the charitable institutions running the educational institutions are not exempted from payment of electricity duty, which as such was specifically exempted under Section 3(2)(iiia) of the 1958 Act. The language and words used in Section 3(2) are plain and simple and are capable of only one definite meaning that there is no exemption provided under the 2016 Act from levy of electricity duty so far as the charitable education institutions are concerned. As observed herein above, where the words are clear and unambiguous, recourse cannot be had to principles of interpretation other than the literal view. As observed hereinabove, the exemption provision need to be interpreted literally and when the language used in exemption provision is simple, clear and unambiguous, the same has to be applied rigorously, strictly and literally. Under the 2016 Act, charitable education institutions running the schools or colleges are specifically excluded from the exemption clause/exemption provision – Section 3(2).12. If the submissions on behalf of the original writ petitioners is accepted that as per Section 3(2)(iii), with respect to all the schools/colleges or institutions, imparting education or training, the electricity duty is not leviable, in that case it would lead to absurd result. In that case, even the private hospitals, nursing homes, dispensaries and clinics, who are profit making entities shall also claim the exemption from levy of electricity duty. The intention of the legislature as per Section 3(2) of the 2016 Act, is very clear and unambiguous that the electricity duty shall not be leviable on the consumption charges or energy consumed (i) by the State Government excluding the public sector undertakings; (ii) by the Central Government excluding public sector undertakings and (iii) ……. run by the local bodies constituted under any law for the time being in force in the State of Maharashtra. Other than the State Government, Central Government and the local bodies and the Government hostels, no exemption from payment of electricity duty has been provided.13. In view of the above findings recorded hereinabove, there is no question of applying the doctrine of Last Antecedents as canvassed by Shri Naphade, learned Senior Advocate, appearing on behalf of the original writ petitioners.14. In that view of the above the original writ petitioners – charitable education institutions registered under the provisions of the Societies Registration Act and/or under the Maharashtra Public Trusts Act, are not entitled to any exemption from levy/payment of the electricity duty on or after 08.08.2016 i.e. from the date on which the Maharashtra Electricity Duty Act, 2016 came into effect. Therefore, the High Court has committed a grave error in setting aside the levy of electricity duty levied on the original writ petitioners – respondents No.1 to 10 herein. The impugned judgment and order passed by the High Court is unsustainable both, on law and on facts and the same deserves to be dismissed.