N.K. Sud, J.
1. By this common order, I propose to dispose of two Civil Writ Petition Nos. 18240 of 1997 (Haryana Organics v. The State of Haryana etc.) and 3455 of 1998 (Frost Falcon Distilleries Limited v. The State of Haryana and Ors.), involving common questions of fact and law. For the sake of convenience, the facts are taken from Civil Writ Petition No. 18240 of 1997.
2. The only question for consideration in the present writ petition is whether the petitioner who is a manufacturer of Ethyl Alcohol falls under Item 10 of the negative list contained in the Haryana Government Notification dated 11.2.1994 (Annexure P-4/B) so as to dis-entitle it from claiming exemption from sales tax under Rule 28-A of the Haryana General Sales Tax Rules, 1975 (for short the Rules).
3. The undisputed facts are that the petitioner-company came into commercial production for manufacture of Ethyl Alcohol for the first time on 31.3.1994. It applied for Eligibility Certificate for exemption of Sales-tax on form ST-70 under Rule 28-A of the rules vide application dated 9/23.5.1994. The Assistant Excise and Taxation Officer-cum-Assessing Authority, Panipat, rejected the claim vide letter dated 17.11.1994 (Annexure P-5) on the ground that the Unit fell within the scope of Entry 10 of the Notification dated 9.3.1992. The petitioner, thereupon, filed a reply dated 29.11.1994 explaining that it was manufacturing Ethanol or Ethyl Alcohol and thus did not fall under the aforesaid entry which merely covered units 'based' on such alcohol. The case was placed before the Higher Level Screening Committee for consideration. The Higher Level Screening Committee rejected it vide order dated 7.8.1996 in the following terms:-
'The Committee, after hearing the representative of the unit, observed that this item falls in the negative list at serial No. 10 of the notification dated 11th January, 1994 issued by the Excise & Taxation Department. It has been clearly mentioned in the notification that ethanol (ethyl alcohol) based industries except non-molasses alcohol were not eligible for sales tax exemption/deferment benefit. Since the unit is using molasses for the manufacture of ethyl alcohol, it was covered in the negative list and was not eligible for grant of sales tax exemption/deferment. The Committee, therefore, rejected the case.'
The petitioner preferred an appeal before the Financial Commissioner and Secretary to Government of Haryana on 11.9.1996. During the pendency of the appeal, the Excise and Taxation Officer-cum-Assessing Authority, Panipat, framed assessment of the petitionerfor the years 1994-95 and 1995-96 and levied tax on the sales effected by the petitioner vide orders dated 9.12.1996 which have been attached with the writ petition as Annexures P-7 and P-8. The petitioner preferred appeals against the assessment orders and also prayed for stay of the order of the Higher Level Screening Committee dated 7.8.1996 denying it the Eligibility Certificate for exemption of Sales-tax. Since neither the appeal was being heard nor any interim stay was being granted by the appellate authority, the petitioner approached this Court vide Civil Writ Petition No. 916 of 1997. The writ petition was disposed of vide order dated 22.1.1997 whereby a direction was issued to the officer concerned to decide the applications for grant of stay within a period of ten days from 28.1.1997 on which date the petitioner was directed to appear before him. The petitioner, thereafter, filed a detailed application dated 24.1.1997 for stay of demand. No decision was taken on this application but the main appeal was taken up on 5.2.1997. It was ad-journed to 12.2.1997 at the request of the petitioner. On 12.2.1997, the matter was disposed of ex-parte by turning down the request of the petitioner to await the arrival of its counsel who was expected to arrive in short time. The appeal of the petitioner was rejected. The order dismissing the appeal pronounced on 12.2.1997 was communicated vide order dated 10.3.1997, a copy of which has been placed as Annexure P-11. The said order was challenged in this Court in Civil Writ Petition No. 3873 of 1997 which was disposed of vide order dated 9.7.1987. The ex-parte order of the Appellate Authority dated 10.3.1997 was set side with a direction that the appeal be decided afresh after affording due opportunity to the petitioner. The appeal was posted for fresh hearing. The petitioner filed detailed written arguments dated 24.7.1997 (annexure P-13) in support of its claim. The Appellate Authority, however,once again rejected the appeal vide order dated 9.10.1997 in the following terms:-
'After hearing both the parties and from the perusal of the record, I feel that the basic question on which the decision of the case hinges in whether the case of the appellant industry making Ethanol (ethyl alcohol) form molasses is covered under entry No. 10 of the notification dated 11.2.94 or not. Rule 28-A sub rule 13 made under Haryana General Sales Tax Act, 1973 provides that 'the incentive of exemption/deferment of payment of tax shall be available to the industries of class of industries except those specified in Schedule-III appended to these rules'. List of these industries have been provided in Schedule-III issued under notification dated 11.2.94. Serial No. 10 of this Schedule provides 'Ethanol (ethyl alcohol) based industries except non-molasses alcohol industries.' It is an admitted fact that the appellant unit is manufacturing ethyl alcohol from molasses. The bare reading of entry No. 10 shows that it has two parts i.e. ethyl alcohol based industries and non-molasses alcohol industries. The second part of the industries i.e. except non molasses alcohol industries would clearly show that industries producing ethyl alcohol from raw material other than molasses are eligible for sales tax exemption/deferment.
The appellant company is manufacturing ethyl alcohol using molasses as a raw material whereas under entry No. 10 only non-molasses alcohol industries are eligible for the benefit. Conversely, it would also mean that any industry manufacturing alcohol from molasses would be covered in the negative list. While considering such cases, it is essential to see the intention of the Government in putting certain items in the negative list. As per record, one of the policies of the State Government is to discourage those industries which face raw material shortage in the State and putting such industries in the negative list is one way of discouraging such industries. It jg also a fact that molasses which is raw material for the appellant company was in short supply during the period under reference. As indicated by Joint Director Industries, the Standing Committee in its meeting held on 6.2.92, decided that industries which are facing shortage of raw material in market should not be encouraged and should be included in the negative list Reading of entry No. 10 clearly shows that the exception has been provided to qualify further the main clause i.e. 'Ethanol (ethyl alcohol) industries. But the exception has been restricted only to non-molasses alcoholindustries. This would also mean that molasses based industries are also covered under the negative list. Since the appellant company is manufacturing ethyl alcohol using molasses as raw material. It is definitely covered under entry No. 10 of the negative list and, therefore, will not be eligible for benefit of sales tax exemption under rule 28-A of HOST, 1975. Therefore, arguments put forth by the appellant company don't stand to the merit. Therefore, the decision taken by the Higher Level Screening Committee shall stand and the appeal filed by the appellant company is hereby rejected.'
It is in this factual background that the present writ petition has been filed seeking quashing of the orders dated 9.10.1997 and 7.8.1998 (Annexures P-14 and P-5) passed by the Commissioner and Secretary to the Government Haryana and the High Level Screening Committee respectively as also the assessment orders for the years 1994-95 and 1995-96 dated 9.12.1996 (Annexures P-7 and P-8).
4. Mr. J.K. Sibal, Senior Advocate appeared on behalf of the petitioner and contended that the denial of the eligibility certificate for exemption of sales tax is based on a total misreading of Entry No. 10 of the negative list of notification dated 11.2.1994. This Entry reads as under:-
'10. Ethanol (Ethyl Alcohol) based industries except non-molasses alcoholindustries.'
According to him, the industries falling under this item are the industries which are 'based on Ethanol (Ethyl Alcohol)' and not the industries which are manufacturing Ethanol (Ethyl Alcohol). An industry can be said to be based on Ethanol (Ethyl Alcohol) if it is using Ethanol (Ethyl Alcohol) as its based raw material. It clearly postulates a stage which is post-manufacture. He further contended that once the Ethanol manufacturing industry could not be said to be included in the meaning of 'Ethanol (Ethyl Alcohol) based industry', it could not be held otherwise by referring to the exception provided in this entry. The exception has to relate to the items which fall under the main category. It is, therefore, pleaded that if there is any ambiguity in the exception it has to be ascribed a meaning which brings it in conformity with the main clause which refers to only industries 'based' on Ethanol or Ethyl Alcohol. The exception, therefore, takes out the industries which are based on Ethyl Alcohol manufactured from non-molasses from the ambit of Entry No. 10 of the negative list.
5. To substantiate the interpretation sought to be placed by him he referred to the entries in the earlier and subsequent notifications regarding the. negative list. The relevant entries are as under:-
(i) Notification dated 17.5.1989.
'12. Ethanol (Ethyl Alcohol) based industries where ethanol is required as a solvent only.' (ii) Notification dated 9.3.1992.
'10. Ethanol (Ethyl Alcohol) based industries except non-molasses alcohol, industries.' (iii) Notification dated 16.12.1996
'10. Ethanol (Ethyl Alcohol) based industries except non-molasses alcohol industries.'
'24. Fermentation and Distillery Brewery.'
(iv) Notification dated 17.12.1997
'8. Manufacturer of Ethyl Alcohol and industries based on Ethyl alcohol.'
'22. Distillery/Brewery.'
'30. Fermentation and distillery.'
The learned counsel pointed out that from the language of Entry No. 12 of the 1989 Notification, it is evident that the Ethanol manufacturing can not be said to be included inEthanol based industries. In fact, even this Entry does not include all the Ethanol or Ethyl Alcohol based industries. Its scope is limited only to such of these industries which use Ethanol as a solvent only. Thus, according to him, the rule making authority was fully conscious of the meaning being attributed to the term 'Ethanol (Ethyl Alcohol) based industries'. He, therefore, contended that no different meaning could be ascribed to the same term used in the subsequent Notification. He, then, referred to the Notification of1996 which contains an identical entry at Serial No. 10. However, there is another Entry No. 24 placing industries of Fermentation and Distillery/Brewery also in the negative list. He pointed out that the petitioner which is a manufacturer of Ethanol (Ethyl Alcohol) is a distillery. If the interpretation suggested by the respondents that the term 'Ethanol (Ethyl Alcohol) based industries' includes Ethyl Alcohol manufacturing industries also were to be accepted, then there was no necessity to introduce Entry No. 24 in the 1996 Notification to include distilleries/breweries in the negative list. He, then, referred to Entry No. 8 of the1997 Notification to show that the rule making authority is alive to the distinction between a 'manufacturer of Ethyl Alcohol' and 'industries based on Ethyl Alcohol'. If the industries based on Ethyl Alcohol included the manufacturers of Ethyl Alcohol, there was no need to mention manufacturer of Ethyl Alcohol separately in this entry. He further pointed out that Distilleries and Breweries had separately been included in Items Nos. 22 and 30 of this Notification. Thus, it was vehemently argued that once the plain language of the main clause of entry No. 10 of the Notification shows that a manufacturer of Ethyl Alcohol is not covered under the said entry, it can not be so inferred by referring to the exception provided in the said entry.
6. The learned counsel placed strong reliance on the decision of the Supreme Court in Abyoy Pada Saha v. Sudhir Kumar, A.I.R. 1967 Supreme Court 115. In this case, the Supreme Court was interpreting the expression 'Sunri excluding Saha'. It was held that if Sunri is a caste, the word 'Saha' in the expression excluding Saha in this item must, without more, also refer to the caste group within the Sunri caste. It was held that a thing can be excluded from another only if it was otherwise within it. The counsel, therefore, contended that the expression except non-molasses alcohol industries must also be understood with reference to the industries falling under the expression Ethanol (Ethyl Alcohol) based industries. In other words, according to him, what is excluded by the exception in Entry 10 are the industries which are based on non-molasses alcohol.
7. Mr. Sibal, then, contended that the language of Entry No. 10 is clear and plain and has to be construed reasonably and rationally and not in a manner which deprives the benefit thereof. For this purpose, he placed reliance on the judgment of the Supreme Court in Shriam Vinyl and Chemical Industries v. Commissioner of Customs, Mumbai, J.T. 2001(4) Supreme Court 89. In this case, while interpreting an entry in the Notification providing for concessional rate of duty, the expression 'assembly' was sought to be equated with the expression 'manufacture'. The Supreme Court dis-approved of this approach by observing that the language of the Notification being clear and plain, it had to be reasonably construed in a rational manner and not in a manner which deprives the benefit thereof. It was observed that if the construction as placed by the Tribunal was accepted, the expression 'assembly' in the Notification would be rendered redundant. The counsel pointed out that in the case in hand also, if the interpretation as placed by the respondents were to be accepted, it would render the word 'based' in the entry redundant. He referred to another judgment of the Supreme Court in I.T.C. Agro Tech. Ltd., etc v. Commercial Tax Officer and Ors.., J.T. 2001(6) Supreme Court 74, where the Supreme Court while interpreting entry 24-B of the 1st Schedule to the Andhra Pradesh General Sales Tax Act, 1957, held that the expression 'mention' could not be equated with the expression that has suffered tax under Entry 24.
8. Mr. Sibal lastly contended that a Statute has to be interpreted as it stands and in case of doubt, it has be to interpreted in a manner favourable to the tax payer. The Court cannot proceed to make good deficiencies in a provision, if any. For this purpose,he placed reliance on the judgment of the Supreme Court in The State of Punjab v. Jullundur Vegetables Syndicate, A.I.R. 1966 Supreme Court 1295. He also placed reliance on another judgment of the Supreme Court in Bajaj Tempo Limited, Bombay v. Commissioner of Income-Tax, Bombay City-Ill, Bombay, 1992(3) S.C.C. 78, wherein it has been held that a provision in a taxing statute granting incentive for promoting economic growth and development should be construed liberally. Since a provision intended for promoting economic growth has to be interpreted liberally, the restriction on it, too, has to be construed so as to advance the objective of the provision and not to frustrate it. He pointed out that in the present case also, the provision for exemption of Sales Tax under Section 13-B of the Act has been incorporated in order to promote industrial growth in the State of Haryana and, therefore, the restriction placed in the negative list has to be construed strictly and in a manner which promotes the objective and purpose of the provision for exemption.
9. Mr. Mohan Jain, appearing on behalf of the petitioner in Civil Writ Petition No. 3455 of 1998, reiterated the contentions raised by Mr. Sibal. On the point of rules of construction of a provision of a Statute or a Notification, he cited some more authorities. He first referred to the decision of the Supreme Court in Municipal Corporation of Greater Bombay v. Mafatlat Industries and Ors., (1996)8 Supreme Court Cases 27, wherein it has been held that 'it is a cardinal principle of construction of a Statute that the words must be given its natural meaning and must be understood in its ordinary or popular sense and each word must have its play'. Accordingly, the counsel contended, that the expression 'Ethanol (Ethyl Alcohol) based industries' can not be equated with the expression 'Ethanol (Ethyl Alcohol) industries' by ignoring the word 'based'.
10. Mr. Jain, then contended that when the exception talks about 'non molasses alcohol industries' it must essentially refer to only such of those industries as fall within the scope of the main clause i.e. 'Ethanol (Ethyl Alcohol) based industries'. On this basis, the exception could only be interpreted to exclude from the scope of the main clause industries which are based on alcohol produced from non-molasses. For this purpose, he placed reliance on the judgment of the Privy Council in Government of the Province of Bombay v. Hormusji Manekji, A.I.R. 1947 Privy Council 200. In para 24 of this report, it has been observed that 'it is a familar principle of statutory construction that where you find in the same section express exceptions from the operative part of the section, it may be assumed, unless it otherwise appears from the language employed, that these exceptions were necessary, as otherwise the subject matter of the exceptions would have come within the operative provisions of the Section.'
11. He, then, referred to the judgment of the Supreme Court in T. Devadasan v. Union of India and Anr. A.I.R. 1964 Supreme Court 179, wherein it has been held that 'a proviso or an exception cannot be so interpreted so as to nullify or destroy the main provision'.
12. Similarly, in S. Sundaram Pillai etc., v. V.R. Pattabiraman, A.I.R. 1985 Supreme Court 582, it has been held that a proviso may have three separate functions'. Normally, a proviso is meant to be an exception to something within the main enactment or to qualify something enacted therein which but for the proviso would be within the purview of the enactment. In other words, a proviso cannot be torn apart from the main enactment nor can it be used to nullify or set at naught the real object of the main enactment. While interpreting a proviso care must be taken that it is used to remove special cases from the general enactment and provide for them separately. In short, generally speaking a proviso is intended to limit the enacted provision so as to except something which would have otherwise been within it or in some measure to modify the enacting clause.
13. In Dwarka Prasad v. Dwarka Das Saraf, A.I.R. 1975 Supreme Court 1758, it has been held that if, on a fair construction, the principal provision is clear, a proviso cannot expand or limit it. A proviso must be limited to the subject matter of the enact-ing clause. A proviso must prime facie be read and considered in relation to the principal matter to which it is a proviso. It is not a separate or independent enactment. The Apex Court went on to observe that words are dependent on the principal enacting words, to which they are tacked as a proviso. The cannot be read as divorced from their context.
14. Similarly, in Madhu Gopal v. VI Additional District Judge and Ors., A.I.R. 1989 Supreme Court 155, it has been held that it is a well settled principle of construction that unless clearly indicated, a proviso would not take away substantive rights given by the Section or the sub-section.
15. In Shri Kihota Hollohon v. Mr. Zachilhu and Ors.,12 A.I.R. 1993 Supreme Court 412, it has been held that it is settled rule of statutory construction that 'the proper function of a proviso is to except and deal with a case which would otherwise fall within the general language of the main enactment, and its effect is confined to that case.'
16. In The Commissioner of Income Tax etc, v. The Indo Mercantile Bank Ltd. etc., A.I.R. 1959 Supreme Court 713, the Supreme Court has held that the proper function of a proviso is that it qualifies the generality of the main enactment by providing an exception and taking out as it were, from the main enactment, a portion which, but for the proviso would fall within the main enactment. Ordinarily it is foreign to the proper function of a proviso to read it as providing something by way of an addendum or dealing with a subject which is foreign to the main enactment. The territory of a proviso therefore is to carve out an exception to the main enactment and exclude something which otherwise would have been within the Section. It has to operate in the same filed and if the language of the main enactment is clear it cannot be used for the purpose of interpreting the main enactment or to exclude by implication what the enactment clearly says unless the words of the proviso are such that is its necessary effect.
17. On the basis of the law laid down by the Supreme Court as above, the counsel contended that the exception provided in Entry 10 in the expression 'except non-molasses alcohol industries can only relate to the industries which otherwise fall in the main provision to which the aforesaid exception has been provided. The main entry is 'Ethanol (Ethyl Alcohol) based industries' and, therefore, the exception can only be interpreted to mean that it refers to industries based on non-molasses alcohol.
18. Mr. Surya Kant, learned Advocate General, Haryana appearing on behalf of the respondents supports the impugned orders denying the exemption to the petitioner. He refers to the scheme of the Haryana General Sales Tax Act, 1973 (for short 'the Act') to show that the basic purpose of the Act is to levy tax. The incidence of taxation is prescribed in Section 6 of the Act according to which sale of goods is the taxable event. Section 13B empowers the State Government to grant exemption from payment of sales tax to such class of industries and for such period as it may consider necessary and expedient to do so in the interest of industrial development of the Sate. Rule 28A lays down the class of industries, period and other conditions for exemption. Sub-rule 2 (f) prescribes the eligibility criteria, Clause (i) (IV) of this sub-rule provides that to be eligible for exemption the industrial unit should not be included in Schedule III appended to these rules. Thus, according to him, from the above scheme it is evident that unless a dealer can prove its entitlement to exemption, it has to pay tax under Section 6 of the Act. In other words, the onus to prove that particular industrial unit does not fall in the negative list (Schedule III of the Rules) is on the dealer.
19. He further points out that Section 13B does not specify any particular industry or class or classes of industries which are entitled to exemption. The discretion in this behalf has been left to the executive which has been given the power to make rules in this regard by issuing notifications, circulars or executive instructions from time to time. Since the negative list has been issued in the exercise of such powers, it is important tokeep in view the intention of the State Government while ascribing meaning to the various entries in the negative list. He pointed out that Schedule III was originally prepared in the year 1988. On December 30, 1990, a Standing Committee was constituted to review the negative list. Thereafter on January 27, 1992 a new industrial policy of the State was introduced for achieving new dimensions of industrial growth and thereby making it necessary to review the negative list. The Standing Committee in its meeting held on 5.2.1992 reviewed the entries in the negative list and recommended certain changes. A copy of the minutes of this meeting has been filed to show that shortage of raw material in the market was one of the considerations for including an industry in the negative list. A revised negative list was prepared by the Committee which was substituted for the existing list vide notification dated 9.3.1992. This list was again revised vide Notification dated 11.2.1994. Entry 10 of both these Notifications is identifically worded and is under consideration in the present writ petition. The learned Advocate General pointed out that molasses was in short supply and it was because of this reason that this entry had been incorporated in the negative list in place of Entry No. 12 of the earlier list of 1989. He, however, fairly conceded that this Entry was not happily worded and is capable of more than one interpretations. However, according to him in the factual background as already explained earlier, the exception provided in this entry makes it amply clear that a unit manufacturing ethyl alcohol from molasses would fall in the negative list as it would fall within the meaning of the expression 'Ethanol (Ethyl Alcohol) based industries.' He explained that the word' except clarifies this position when it specifies that non-molasses alcohol industries are out of the purview of this Entry. Alcohol can be manufactured from molasses as also from non-molasses like grains, fruits, potatoes and sugar etc. When the exception excludes the industries manufacturing alcohol from non-molasses, it automatically means that industries manufacturing ethyl alcohol from molasses are included in the Entry. The learned Advocate General then contended that the Entry No. 10 consists of two categories viz. (i) Ethanol (Ethyl Alcohol) based industries and (ii) except non-molasses alcohol industries. The effect of two negative terms in (ii) i.e., 'except' and 'non' would be that molasses alcohol industries would fall in this category. This, according to him, is the only way this Entry can be read.
20. He further pointed out that if the interpretation placed by the petitioner on the first part of this Entry viz. 'Ethanol (Ethyl Alcohol) based industries' was to be accepted, then the second part providing for the exclusion of non-molasses alcohol industries would be rendered redundant. This, according to him, would be contrary to the well settled principle of interpretation that no provision should be interpreted in a manner which makes any part of the same as redundant. Every word and expression has to be ascribed a meaning.
21. Mr. Surya Kant cited the judgment of the Supreme Court in Tata Oil Mills Co. Ltd., v. Collector of Central Excise, 1991(82) S..T.C. 225 to contend that to understand the language in a notification, one has to keep in mind the object and purpose of exemption. He further contended that as already pointed out, the object and purpose of including Entry No. 10 in the negative list was borne out from the minutes of the meeting of the Standing Committee. It is evident that one of the major considerations for inclusion of certain industries in the negative list was short supply of raw material. He therefore, explained that since molasses was in short supply, its consumption was sought to be discouraged and this intendment has to be kept in view while interpreting the aforesaid entry. Thus, Entry No. 10 of the negative list was meant to cover industries which manufactured Alcohol from molasses as also industries which are based on such alcohol.
22. Mr. Surya Kant, then, contended that if the meaning of the expression non-molasses based Alcohol industries as suggested by the counsel for the petitioners was accepted, it would render the provision totally unworkable. He opposes the suggestion thatthe exception merely takes out from the purview of the main provision, industries based on Ethyl Alcohol manufactured from non-molasses or that Entry 10 would cover only those industries which are based on Ethyl Alcohol manufactured from molasses. Such a construction, according to him, would render the provision totally unworkable as it is difficult to verity whether the alcohol consumed by an 'Ethanol (Ethyl Alcohol) based industry' had been manufactured out of molasses or out of non-molasses. Such alcohol is not only manufactured in the State but is also imported from other States. The consumers of Ethyl Alcohol may not even buy it directly from the manufacturers. They may do so from the dealers who may have mixed stock of both i.e., alcohol manufactured from molasses as also from non-molasses. When alcohol is purchased from such a dealer, it is not possible to identify one kind of alcohol from the other.
23. He also placed reliance on the judgment of the Apex Court in Pardeed Aggarbatti v. State of Punjab and Ors., (1997)107 S.T.C. 561, wherein it has been held that when some articles are grouped together in the list under the Schedule of sales tax, each word of the Entry draws colour from the other words therein. On the basis of these observations, it is claimed that first part of Entry No. 10 viz. 'Ethanol (Ethyl Alcohol) based industries' would draw colour from the second part i.e. 'except non-molasses alcohol industries' and, therefore, the molasses alcohol industries would be included in the first part making it ineligible for claiming exemption.
24. In reply, counsel for the petitioners contended that it is a well settled position in law that in interpreting a taxing Statute, equitable considerations are entirely out of place. They referred to the observations of the Supreme Court in several judgments to show that there is no scope for intendment or presumptions or assumptions while interpreting a taxing Statute.
25. In Commissioner of Sales-tax, V.P. v. Modi Sugar Mills Ltd., A.I.R. 1961 Supreme Court 1047, it has been held that in interpreting a taxing statute, equitable considerations are entirely out of place. Nor can 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 a taxing statute in the light of what is clearly expressed : it cannot imply anything which is not expressed : it cannot import provisions in the statutes so as to supply any assumed deficiency.
26. Similarly, in Hansraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise and Customs, Surat and Ors. A.I.R. 1970 Supreme Court 755, it has been held (at page 759) that 'it is well established that in a taxing statute there is no room for any intendment. The entire matter is governed wholly by the language of the notification. If the tax-payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid apy supposed intention of the exempting authority.' The Court further observed that 'the operation of the notifications has to be judged not by the object which the rule-making authority had in mind but by the words which it has employed to effectuate the legislative intent'.
27. Counsel for the petitioners also placed reliance on the decision of the Supreme Court in Swadshi Polytex Ltd., v. Collector of Central Excise, A.I.R. 1990 Supreme Court 301, in which it has been held (at page 306) that 'It is true that when in a fiscal provision, if benefit of exemption is to be considered, this should be strictly considered. But the strictness of the construction of exemption notification does not mean that the full effect to the exemption notification should not be given by any circuitous process of interpretation. After all, exemption notifications are meant to be implemented the trade notices in these matters clarify the stand of the Government for the trade.'
28. In S. Narayanaswami v. G. Paneerselvam and Ors., A.I.R. 1972 Supreme Court 2284, it has been held (at page 2289) that 'A logical corollary of that rule is that' a statute may not be extended to meet a case for which provision has clearly and undoubtedly not been made.' It has been further held (at page 2290) that 'it is certainlynot the duty of the Court to stretch the words used by the legislature to fill in gaps or omission in the provisions of an Act.'
29. In Azad Tobacco Factory (P) Ltd. v. Commissioner of Income Tax and Ors., (1997) I.T.R. 1002, it has been held that while interpreting a provision in a statute one should look squarely at the words in the light of what is expressly stated. Nothing can be implied so as to supply any assumed deficiency. Nothing can be implied which is not expressed in it nor can any provision be imported in the statute so as to supply any assumed deficiency. A provision can not be interpreted on any presumption or assumption, nor on any equitable consideration.
30. In Federation of A.P. Chambers of Commerce Industry and Ors. v. State of A.P. and Ors., (2000)6 S.C.C. 550, it has been held (at page 553) that 'no court is justified in imputing to the legislature an intention that it has not clearly expressed in the language it has employed.'
31. In A.V. Fernandez v. The State of Kerala, A.I.R. 1957 Supreme Court 657, it has been held that if a case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter.
32. In Bharathidasan University and Anr. v. All India Council for Technical Education and Ors., (2001)8 S.C.C. 676, it has been held that when the legislative intent finds specific mention and expression in the provisions of the Act itself, the same cannot be whittled down or curtailed and rendered nugatory by giving undue importance to the so-called object underlying the Act. It is hard to ignore the legislative intent to give definite meaning to words employed in the Act and adopt an interpretation which would tend to do violence to the express language as well as the plain meaning and patent aim and object underlying the various other provisions of the Act.
33. In Bharti Telecom Ltd., v. The Commissioner of Customs, J.T. 2001(9) Supreme Court 501, the Apex Court has held that it is well settled that in a taxing salute, there is no room for any intendment and regard must be had to the clear meaning of the words.
34. Counsel for the petitioners, therefore, contended that Entry 10 has to be interpreted on the basis of the plain language used therein and not on the basis any presumption or intendment of the State Government. A citizen acts on the basis of the language of a Statute or a Notification. He has no access to the records of the Government to find out the true intention. The counsel also contended that merely because the plain meaning of a provision makes its implementation difficult, it can not be ascribed a meaning different from what its expressly states. According to law settled by the Apex Court in the various authorities noticed above, it is not for the Court to make up for the deficiencies in a provision by interpreting it on equitable considerations or on presumptions or assumptions.
35. I have considered the rival contentions and have perused the authorities cited before me. On the basis of the authoritative pronouncements of the Supreme Court as noticed above, it is clear that the entry in the Notification has to be interpreted on the basis of the plain language used in the same without having any recourse to any assumptions or presumptions or intendment. Each word has to be given a meaning and can not be considered to be superfluous or unnecessary. If the interpretation on the basis of the plain language used in this entry leads to some difficulty, it is for the legislature or the rule making authority to take the corrective measures. The courts can not give it an interpretation on equitable considerations or presumptions or assumptions in order to make up the deficiencies therein to overcome such difficulty. It is also well settled that an exception or a proviso must, prima facie, be read and considered in relation to the principal matter to which it is a proviso or an exception. It cant not be considered asseparate or independent provision. A proviso can not take away specific rights given by the main provision. The proper function of an exception is to except and deal with a case which would otherwise fall within the general language of the main enactment and its effect is confined to that case only. In other words, an exception takes out a portion which, but for such exception, would fall within the main provision. The controversy in the present petition has, therefore, to be considered in the light of the aforesaid settled rules of construction.
36. At the very outset, the contention raised on behalf of the respondents that this entry consists of two parts i.e. (i) 'Ethanol (Ethyl Alcohol) based industries' and (ii) 'except non-molasses Alcohol Industries' must be rejected. A plain reading of the entry shows that it is one single sentence in which part (i) is the main clause and part (ii) is an exception provided thereto. If the contention of the respondents that part (ii) above is to be considered as a separate category were to be accepted, then, it would mean that every industry other that 'non-malasses alcohol industries' would fall in the negative list. For example, a cycle manufacturing industry is not a 'non-malasses Alcohol Industry' and by virtue of this interpretation, it would fall in the negative list. Instances can be multiplied by referring to various other industries. Such interpretation would render the need for listing any other industry in this list as redundant.
37. In fact, the contentions raised on behalf of the respondents are self-contradictory. On the one hand it is claimed that this entry consists of two parts while, on the other, it is contended that the second part is an exception to qualify, the main clause. This contradiction has been highlighted by me even in the extract from the impugned order dated 9.10.1997 reproduced earlier in this order. According to me, part (ii) can either be an exception to part (i) or a separate category. It certainly can not be both. Thus, I am of the considered view that the main clause of this entry lists only one category of industries i.e., industries based on Ethyl Alcohol. Part (i) is main clause and part (ii) is only an exception thereto. In view of this finding, the judgment of the Supreme Court in Pardeep Aggarbatti's case (supra) has no application.
38. Since as per the settled position in law, an exception has to be read and considered in relation to the main provision, the first question that falls for my consideration is as to whether 'Ethanol (Ethyl Alcohol) based industries' includes industries manufacturing Ethanol or Ethyl Alcohol. The answer to this question is in the negative. It has been correctly pointed out by the counsel for the petitioners that it refers to only industries which are based on Ethanol or Ethyl Alcohol. The language used in Entry 12 of the 1989 Notification makes it further clear that even out of the industries based on Ethyl Alcohol only such industries which require such alcohol only as a solvent are covered by it. This is clearly a stage subsequent to the manufacture of Ethanol or Ethyl Alcohol. It, therefore, refers to pnly such industries which consume Ethyl Alcohol as an input and not industries which manufactures Ethyl Alcohol. In subsequent Notifications dated 9.3.1992 and 11.2.1994, the main clause viz. 'Ethanol (Ethyl Alcohol) based industries' has been retained. In the negative list of 1989, the main clause of this entry was qualified so that only one category of the Ethanol based industries was included therein i.e. industry where Ethanol was required as a solvent only. On the other hand in the subsequent negative lists of 1992 and 1994 this qualification has been done away with and an exception has been provided. Thus, in my considered view, the main clause of Entry 10 of the negative lists of 1992 and 1994, only refers to industries which are based on Ethanol. In other words the industries which consume Ethanol as in input are covered by the main clause. A perusal of the impugned orders shows that while rejecting the claim of the petitioner, it has been observed that 'entry No. 10 clearly shows that the exception has been provided to qualify further the main clause i.e. 'Ethanol (Ethyl Alcohol) industries'. The Appellate Authority has totally omitted the word 'based' because of which the entire meaning of the entry has been mis-interpreted. If the interpretation sought to be placed by the respondents on the expression 'Ethanol (Ethyl Alcohol)based industries' were to be accepted, it would render the word 'based' in this expression as totally redundant. This is contrary to the well settled principles of interpretation. In Aswini Kumar Ghose v. Arabinda Bose, 1953 S.C.R. 1, it was held that it is not a sound principle of construction to brush aside words in a statute as being inapposite surplus agejf they can have appropriate application in circumstances conceivable within the contemplation of the statute.
39. The next question for consideration is as to what does the exception contained in part (ii) i.e., 'except non-molasses Alcohol industries' exclude from main clause in part (i). On the ba'sis of principles of construction of an exception or a proviso as noticed above, it has to be held that it excludes only such non-molasses industries which, in the first place, are covered by the main clause. Now, the non-molasses Alcohol industries which fall in the main clause are the industries which are based on Alcohol manufactured from non-molasses. The main cause includes industries which consume Ethanol or Ethyl Alcohol as an input. Such alcohol could be manufactured from molasses as well as from non-molasses. Thus, the exception 'non-molasses Alcohol industries' would take out industries based on alcohol manufactured from non-molasses from the ambit and scope of the main clause. In other words, Entry 10 of the negative lists of 1992 and 1994 only includes industries based on Ethanol of Ethyl Alcohol manufactured from molasses. This can be the only way to interpret Entry 10 of the negative list. The view that I am taking is fully fortified by the decision of the Supreme Court in Abhoy Pada Saha's case (supra). In that case, while interpreting the expression 'Sundri excluding Saha', the Apex Court held that the word 'Saha' in this expression refers to only the caste group within the Sunri caste and did not refer to Sahas' in general belonging to other castes.
40. Although the intention of the State Government for incorporating this entry in the negative lists of 1992 and 1994 is irrelevant in view of the plain language of the main clause, yet I may also deal with the contention that the intention behind this entry was to discourage the consumption of molasses which was in short supply. Even the interpretation that I have adopted is a step towards discouraging the consumption of molasses. If the industries using alcohol made out of molasses as an input are discouraged, it would be a disincentive to manufacturers of such alcohol and, consequently, the consumption of molasses would automatically go done. Thus, the objective of discouraging the consumption of molasses is still achieved. However, for the sake of repetition, I may once again reiterate that when the language of the provision is clear, there is no scope for giving it a different meaning on me basis of intendment. Even otherwise, a citizen is guided by what is stated in the notifications or trade notices. He is neither required to go behind them to find out the intendment of the government nor does he have any access to the government records. The Apex Court in the case of M/s Swadeshi Polytex Ltd. (supra) has clearly observed that exemption notifications are meant to be implemented and trade notices in these matters clarify the stand of the government. In the case of, Tata Oil Mills Co. Ltd. (supra) the object and purpose of the notification was taken into account to grant exemption to a dealer and not for denying it.
41. The contention of the respondents that this interpretation will make the provision unworkable as the State has no machinery to verify as to whether alcohol consumed by a particular industry has been made out of molasses or non-molassess can not be a ground for giving the entry a meaning different from what its plain language shows. The case law cited by the petitioners on the subject is very clear. In case there is any practical difficulty, it is not the duty of the Court to stretch the words used in a particular enactment or notification to fill in the gaps or omissions. Nothing can be implied which is not expressed in a provision nor can a provision be imported so as to cover the assumed deficiency. Corrective step to overcome this difficulty appears to have been taken in the subsequent Notification of 1997 when industries based on all kinds of Ethyl Alcohol were placed in the negative lists under Entry 8.
42. In views of the above, I hold that the respondents were not justified in denying the exemption to the petitioners on the ground that they were manufacturing Ethanol/Ethyle Alcohol from molasses. Such manufacturers do not fall in Entry 10 of the negative lists of 1992 and 1994. Accordingly, the impugned order dated 7.8.1996 of the High Level Screening Committee as also the order dated 9.10.1997 passed, by the Appellate Authority are set aside. The matter shall now go back to the High Level Screening Committee for fresh determination of the claim of the petitioners in the light of the observations made above. In case the petitioner is found entitled to exemption, the demands created vide orders dated 9.12.1996 (Annexures P-7 and P-8) shall also be modified giving consequential relief.
43. Resultantly, both the writ petitions stand allowed. However, in view of the factsand circumstances of the case, there shall be no order as to costs.