S.B. Sinha, C.J.
1. Interpretation of a notification dated 21.04.1982 exempting the sugar industry from payment of duty of excise is in question in these writ petitions.
2. However, we may notice facts of the case in brief from C.W.P. No. 2407 of 1984:-
The petitioner carries on a business in production of sugar in the State of U.P. The petitioner contends that the sugar production in the country during the year 1981-82 surpassed all estimates and reached an all-time record of 84.35 lac tones as against 51.43 lac tones during the season 1980-81. The sugar industry allegedly had been paying a much higher price than the statutory minimum price in the earlier years. However, during the relevant period, there had been reversal of the trend of diversion of sugarcane to gur and khandsari sector. Large scale diversion of sugarcane from gur and khandsari to the sugar factories forced many sugar factories in Bihar and U.P. to carry on crushing of sugar in hot summer months, during which the recovery appreciably declines.
Allegedly, the off-take of sugar did not keep pace with the increased production despite liberal releases of sugar as a result whereof there had been a significant fall in the free sale sugar price. The Central Government with a view to provide some relief to the sugar industry decided to export the full quota of 6.5 lac tones of sugar during the year in question even though the prices in the international market are depressed. The Government had also decided to create a buffer stock of sugar.
According to the petitioner, with a view to compensate the sugar industry for lower recovery due to early start of crushing, the Government of India announced rebate of excise duty at the rate of Rs. 23.50 per quintal on free sale sugar and Rs. 15.30 per quintal on levy sugar on sugar produced during the period commencing on 28.10.1981 and ending on 30.11.1981. It is further the case of the petitioner that furthermore in order to compensate the sugar industry for lower recovery due to continuing crushing operations in summer months, the Government announced rebate of excise duty @ Rs. 40/- per quintal on free sale sugar and Rs. 24.50 per quintal on levy sugar on sugar produced during the period commencing from 01.05.1983 to 30.09.1983 in excess of the average production of the corresponding period of the preceding three years.
For the aforementioned purposes, the notification in question was published on 21.04.1982, the relevant provisions whereof read thus:-
'Reduced rate of duty is fixed on sugar produced between 1-5-82 and 30.9.1982 subject to specified conditions.
In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, read with Sub-clause (4) of Clause 50 of the Finance Bill, 1982, which clause has, by virtue of the declaration made in the said Bill under the Provisional Collection of Taxes Act, 1931 (16 of 1931), the force of law, the Central Government hereby exempts sugar, described in column (1) of the Table below and falling under sub-item (1) of Item No. 1 of the First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), from so much of the duty of excise and special duty of excise livable thereon as is specified in corresponding entry in columns (a) and (3) of the said Table'.
TABLEDescription of SugarDuty of excise and special duty of excise Free saleLevy Sugar(1)(2)(3)Sugar produced in a factory during the period commencingon the 1st day of May, 1982, and ending with the 30th day of September, 1982, whichis in excess of the average production of the corresponding period of the preceding three sugar years.(Rupees per quintal) 40.0024.50 ..... '(a) 'Average production' in relation tosugar produced in a period in afactory, means the average productionduring the corresponding period ofeach of the preceding three sugaryears;'
..... '3. Where during the period mentioned in column (1) of the said Table production in any of the preceding three sugar years was nil, the average production shall be determined as under -
The average shall be the average of the corresponding periods among the preceding three sugar years, in which the factory had actually produced and the period of periods during the said three sugar years shall be ignored while arriving at the average.
4. Nothing contained in this notification shall apply to a sugar factory where production during the period mentioned in column (1) of the said Table during all the preceding three sugar years was nil.
3. Clause 4 of the said notification dated 21.04.1982, however, was amended by a notification dated 11.03.1982 in the following terms:-
'4. Where production during May to September in all the preceding three sugar years was nil, the entire production during May to September, 1982, will be entitled to the exemption under this Notification.'
4. The admitted case of the parties is that whereas the petitioner made production of sugar in the first year, but there has been no production in the factory in the next two years and, thus, as there has been no production in the petitioner's factory consecutively for two years, the respondent herein refused to extend the benefit of the aforementioned notification to the petitioner.
5. Mr. Sethi, the learned senior counsel appearing on behalf of the petitioner, inter alia would contend that having regard to the definition of the term 'average rate of production', the same must be given an ordinary meaning, which would be 'Arithmetic Mean'. In support of the said contention, the learned counsel relied upon Webster's Dictionary and Black's Law Dictionary, 4th Edn., which is to the following effect:-
' AVERAGE:-
1. Quantity, rating, or the like that represents or approximates an arithmetic mean: a golf average in the 90's. Compare Grade point average a number or value intermediate to a set of numbers or values.
2. A typical or usual amount, rate, degree, level, etc.; norm.
3. Of, pertaining to, or forming an average; estimated by average: the average rainfall.
4. Typical; common; ordinary: the average person.
5. To find an average value for (a variable quantity); reduce to a mean.
6. (Of a variable quantity) to have as an arithmetic mean: Wheat averages 56 pounds to a bushel.
7. To do or have on the average: to average seven hours of sleep a night.
8. To have or show an average.
9. Average down, to purchase more of a security or commodity at a lower price to reduce the average cost of one's holdings.
10. Average out, to come out of a security or commodity transaction with a profit or without a loss; to reach or show an average: My taxes average out to a third of my income.
11. Average up, to purchase more of a security commodity at a higher price in anticipation of a further rise in prices.
12. On the or an average, usually; typically.'
' AVERAGE. A mean proportion, medical sum or quality, mae out of unequal sums or quantities. Brisendine v. Skousen Bros. 48 Ariz. 416, 62 P. 326, 112 A.L.R. 1089; Long v. Ottumwa Ry. & Light Co., 162 Iowa, 11, 142 N.W. 1008
The learned counsel would urge that if any other meaning is assigned, the same would lead to an incongruity insofar as whereas in a case where there had been no production at all, exemption would be granted in terms of amended Clause 4 of the exemption notification, which would be denied to an industrial undertaking where there had been no production only for two years out of three years.
It was submitted that if the dictionary meaning is not attributed to the notification in question, the same would become ultra vires Article 14 of the Constitution of India.
6. It appears that although the petitioner in the original writ petition did not question virus of the said notification, it filed an application for amendment of the writ petition inter alia for grant of the following relief(s):-
'a). A writ order or direction in the nature of certiorari, prohibition or any other appropriate writ, order, or direction and quash and strike down the said paragraph 3 of the notification dated 21.4.1982 as being illegal and ultra vires Article 14 of the Constitution of India;'
The said application for amendment of writ petition has been allowed.
The learned counsel had in support of the aforementioned contention also relied upon an unreported decision of the Karnataka High Court in The Kampli Cooperative Sugar Factory Limited v. The Union Government and Ors. in C.W.P. No. 8234 of 1978 decided on 08.08.1983, wherein it has been held:-
'10. What is important under the Notification dated 20.4.74 (Exhibit-E) is the production of sugar during the lean period referred to in that notification and not the non production during the corresponding period of the previous year. The emphasis is on production during the lean period specified in the notification and not on non-production during the previous period. Hence, the non-production during the previous period, assuming there was no production, was totally irrelevant to reject the claim of the petitioner. Without any doubt, the construction placed by the authorities is too artificial, technical and has defeated the very object with which Government issued the notification.'
7. The respondents, however, in their counter affidavit stated:-
'3. Para 3 is not admitted hence it is denied. Para 4 of impugned notification provides relief to such sugar mills who could not run or work during the periods specified in the notification in all the preceding three sugar years 1978-79, 79-80 & 80-81 on account of one reason or the others. This relief is obviously intended to provide incentive to weaker section of sugar industry. The question of discrimination in the case of Fiscal enactment, which either seek to impose or exempt the duty of excise, does not arise. As per Sub-rule (3) of Rule 8 of the Central Excise Rule 1944 the Central Govt. can grant exemption from duty in the form or method different from the form or method in which the excise duty is livable under the First Schedule to Central Excise & Salt Act, 1944. The only ban is that the duty chargeable on such different method, or form shall in no case, exceed the duty imposed by Section 3 of the Act. The exemption from duty by way of exception notification cannot be claimed as a matter of right (case of Indian Organic Chemical v. Union of India Del). However, notification issued under Rule 8 of Central Excise Rules, 1944 cannot provide a different mode of assessment under Rule 8 of Central Excise Rules. It is within the powers of Central Govt. to grant the exemption from the whole or part of the duty subject to such conditions as may be specified in the notification.'
8. It was contended that this Court in exercise of its jurisdiction under Article 226 of the Constitution should not interfere with a fiscal policy of the State. It was urged that the notification in question being in the nature of an exemption notification, the same should be strictly construed. Reliance in this connection has been placed on Ugar Sugar Works Ltd. v. Delhi Administration and Ors., : [2001]2SCR630 and Rajasthan Spinning And Weaving Mills Limited, Bhilwara, Rajasthan v. Collector of Central Excise, Jaipur, Rajasthan : 1995(77)ELT474(SC) .
9. It is beyond any cavil of doubt that an exemption notification is required to be construed strictly. The said notification had been issued with specific purpose(s). If the intention of the Central Government was that whereas it would give incentive to those who for any reason whatsoever is not in a position to produce any sugar vis-a-vis to those who were capable thereof but would not otherwise carry on any production, no exception thereto can be taken.
10. The expression used in a statutory instrument must be interpreted having regard to the object and purport of the notification in question. It is also trite that the attempt should be made to give effect to the entire notification.
In the said notification itself, modalities have been laid down as to how the said exemption notification should be construed in a case where the production of sugar in any of the preceding three year was nil.
In the event, a literal interpretation is given, the same would render Clause 3 of the said notification otiose and redundant. Literal interpretation, in our opinion, to the term 'average production', thus, cannot be given in the instant case for the purpose of interpretation of Clause 3 of the said notification. In any event, Clause 3 thereof must be held to contain a separate provision, which would apply to the case of the petitioner.
11. The submission of Mr. Sethi to the effect that if such a construction is put, the same would result in discrimination, in our opinion, cannot be accepted.
An exemption notification, as is well known, must be strictly construed. By reason of such notification, a benefit is conferred. Before a person can seek to obtain any benefit thereof, he must prove that conditions precedent thereforee are satisfied. If the conditions precedent are not satisfied, the exemption notification shall not apply.It is now well known that there is no equity in the matter of tax. No equity can also be claimed in the matter of exemption of indirect tax. There is also no intendment in a taxing statute.
12. The judgment of the Karnataka High Court in The Kampli Cooperative Sugar Factory Limited's case (Supra) is not attracted in the instant case inasmuch as constriction of a similar question did not arise there.
13. It is now a well-settled principle of law that although a taxation law cannot claim immunity from the equality clause in Article 14 of the Constitution of India and has to pass like any other law the equality test of that Article but the State has a considerably wide discretion in the matter of classification for taxation and economic matters in view of the intrinsic complexity of fiscal adjustments of diverse elements.
14. We may in this behalf refer to a decision of this Court in Indian Organic Chemicals Limited v. Union of India and Ors. 1980 E.L.T. 521 (Del.), wherein it has been held:-
'15. While it is true that a taxation law cannot claim immunity from the equality clause in Article 14 of the Constitution, and has to pass like any other law the equality test of that article, it must be remembered that the State has, in view of the intrinsic complexity of fiscal adjustments of diverse elements, a considerably wide discretion in the matter of classification for taxation and economic matters. (See INCOME TAX OFFICER AND ORS. v. R. TAKIN ROY RYMBAI : [1976]103ITR82(SC) . The Central Government is the best judge to take policy decisions and to decide what excisable goods should be exempted from the whole or any part of the duty livable on such goods on what conditions.
In STATE OF GUJRAT v. SHRI AMBICA MILLS LTD. (1976) 4 SCC 656, Mathew J. speaking for the Court said:
'In the utilities, tax and economic regulation cases, there are good reasons for judicial self restraining if not judicial deference to legislative judgment. The legislature after all has the affirmative responsibility. The courts have only the power to destroy, not to reconstruct. When these are added to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the judges have been over-ruled by events, self limitation can be seen to be the path of judicial wisdom and institutional prestige and ability.' in G.K. KRISHNAN etc. v. STATE OF TAMIL NADU etc. : [1975]2SCR715 he said:
'In the context of commercial regulation, Article 14 is offended only if the classification rests on grounds wholly irrelevant to the achievement of the objective and this lenient standard is further weighted in the State's favor by the fact that a statutory discrimination will not be set aside if a state of facts may reasonably be conceived by the court to justify it.' In the latest decision of the Supreme Court of U.S. in SAN ANTONIO SCHOOL DISTRICT v. RODRIUES (1973) 411 U.S. 1, Stewart J. said:
'No scheme of taxation, whether the tax is imposed on property, income, or purchases of goods and services, has yet been devised which is free of all discriminatory impact. In such a complex arena in which no perfect alternatives exist, the court does well not to impose too rigorous a standard of scrutiny test all local fiscal scheme become subjects of criticism under the equal protection clause.' Marshall J. in his dissenting judgment (with which Douglas J. concurred) summed up his conclusion as follows:
'In the context of economic interests, we find that discriminatory state action is almost always sustained, for such interests are generally far removed from constitutional guarantees. Moreover, 'the extremes to which the court has gone in dreaming up rational basis for state regulation in that area may in many instances 'be ascribed to a healthy revulsion from the court's earlier excesses in using the Constitution to protect interests that have more than enough power to protect themselves in the legislative hall.' [DANDRIDGE v. WILLIANS (1970) 397 U.S. 471.
Why do we trust the legislature in economic and fiscal matters? Because the legislature knows the economic scene. It can see the economic and political landscape from a distance and assess the situation. The Supreme Court has said:
'Judicial deference to legislature in instances of economic regulation is sometimes explained by the argument that rationality of a classification may depend upon 'local conditions' about which local legislative or administrative body would be better informed than a court consequently, lacking the capacity to inform itself fully about the peculiarities of a particular local situation, a court should hesitate to dub the legislative classification irrational [See CARMICHAEL v. SOUTHERN COAL & COKE CO. (1936) 301 U.S. 495 Tax laws for example, may respond closely to local needs and the court's familiarity with these needs is likely to be limited. thereforee the court must be aware of its own remoteness and lack of familiarity with the local problems. Classification is dependent on peculiar needs 'and specific difficulties of the community. The needs and the difficulties of a community are constituted out of facts and information beyond the easy ken of the court.' G.L. KRISHNAN v. STATE OF TAMIL NADU, : [1975]2SCR715 .
The crucial date is April 1, 1976 on which the scheme is based. The choice of a date as a basis for classification cannot always be dubbed as arbitrary even if no particular reason is forthcoming for the choice unless it is shown to be capricious or whimsical in the circumstances. When it is seen that a line or a point there must be, and there is no mathematical or logical way of fixing it precisely, the decision of the legislature or its delegate must be accepted unless it can be said that it is very wide of any reasonable mark. [See LOUISVILLE GAS & E. CO. v. COLEMAN (1927) 277 U.S. 32 per Justice Holmes]. As Mathew J. said in UNION OF INDIA v. PARAMESHWARAN MATCH WORKS, : 1978(2)ELT436(SC) :
'There can be no doubt that any date chosen for the purpose, would, to a certain extent, be arbitrary. That is inevitable.' That a classification can be founded on a particular date and yet be reasonable has been held by the Supreme Court in several decisions: See HATHI SINGH MFG. CO. LTD. v. UNION OF INDIA, : (1960)IILLJ1SC , Dr. MOHAMMED SAHEB MEHBOOB MEDICO v. DEPUTY CUSTODIAN GENERAL, : [1962]2SCR371 , BHIKUSA YAMASA KSHATRIYA (P) LTD. v. UNION OF INDIA, : (1963)ILLJ270SC and DARUKA & CO. v. UNION OF INDIA, : [1974]1SCR570 .
Applying these principles it does not appear to me that the law has singled out any particular manufacturer for hostile or unequal treatment. Nor has any been singled out for favored treatment. In fact it is no where proved in this case that IOC has been discriminated against deliberately. I cannot find any 'Crying dissimilarity' in the scheme, to use a phrase of Krishna Iyer J. MURTHY MATCH WORKS v. ASST. COLLECtor, : 1978(2)ELT429(SC) . Unless it can be shown that such dissimilarity exists in reality I can not condemn the scheme as discriminatory.'
15. There is another aspect of the matter - In the event, this Court accepts the submission of Mr. Sethi the entire notification has to be struck down. This Court will have no jurisdiction to direct the respondents to extend the benefit of the said notification to the petitioners herein.
16. Furthermore, dictionary meaning in all situations cannot be applied while construing a statute. It is well known that in the event the dictionary meaning given in a statute leads to an inequitable result or absurdity, the same has to be avoided and a commonsense approach has to be taken recourse to.
17. In Union of India and Ors. v. Harjeet Singh Sandhu, : [2001]2SCR1127 , it has been held:-
'30. In Major Radha Krishan v. Union of India, : [1996]3SCR836 this Court has held: (SCC p. 511, para 8)
'when the trial itself was legally impossible and impermissible the question of its being impracticable, in our view cannot or does not arise. 'Impracticability' is a concept different from 'impossibility' for while the latter is absolute, the former introduces at all events some degree of reason and involves some regard for practice. According to Webster's Third New International Dictionary 'impracticable' means not practicable; incapable of being performed or accomplished by the means employed or at command. 'Impracticable' presupposes that the action is 'possible' but owing to certain practical difficulties or other reasons it is incapable of being performed. The same principle will equally apply to satisfy the test of 'inexpedient' as it means not expedient; disadvantageous in the circumstances, inadvisable, impolitic. It must thereforee be held that so long as an officer can be legally tried by a Court Martial the authorities concerned may, on the ground that such a trial is not impracticable or inexpedient, invoke Rule 14 (2). In other words, once the period of limitation of such a trial is over the authorities cannot take action under Rule 14(2).' 31. The above passage shows that the learned Judges went by the dictionary meaning of the term 'impracticable', placed the term by placing it in juxtaposition with 'impossibility' and assigned it a narrow meaning. With respect to the learned Judges deciding Major Radha Krishan case (supra) we find ourselves not persuaded to assign such a narrow meaning to the term. 'Impracticable' is not defined either in the Act or in the Rules. In such a situation, to quote from Principles of Statutory Interpretation (Chief Justice G.P. Singh, 7th Edn., 1999, pp. 258-59):
'When a word is not defined in the Act itself, it is permissible to refer to dictionaries to find out the general sense in which that word is understood in common parlance. However, in selecting one out of the various meanings of a word, regard must always be had to the context as it is a fundamental rule that 'the meanings of words and expressions used in an Act must take their colour from the context in which they appear'. thereforee, 'when the context makes the meaning of a word quite clear, it becomes unnecessary to search for and select a particular meaning out of the diverse meanings a word is capable of, according to lexicographers'.
As stated by Krishna Iyer, J.: 'Dictionaries are not dictators of statutory construction where the benignant mood of a law, and more emphatically, the definition clause furnish a different denotation.' In the words of Jeevan Reddy, J.: 'A statute cannot always be construed with the dictionary in one hand and the statute in the other. Regard must also be held to the scheme, context and to the legislative history.' Learned Judge Hand cautioned 'not to make a fortress out of the dictionary' but to pay more attention to 'the sympathetic and imaginative discovery' of the purpose or object of the statute as a guide to its meaning.'
32. In Words and Phrases (Permanent Edn., Vol. 20, pp. 460-61) it is stated that the term 'impossible' may sometimes be synonymous with 'impracticable'; 'impracticable' means 'not practicable', incapable of being performed or accomplished by the means employed or at command; 'impracticable' is defined as incapable of being effected from lack of adequate means, impossible of performance, not feasible; 'impracticable' means impossible or unreasonably difficult of performance, and is a much stronger term than 'expedient'. In The Law Lexicon (P. Ramanatha Aiyar, 2nd Edn., p. 889) one of the meanings assigned to impracticable is 'not possible' or 'not feasible'; at any rate it means something very much more than 'not reasonably practicable''. In the New Oxford Dictionary of English (1998, at p. 918), impracticable (of a course of action) is defined to mean 'impossible in practice to do or carry out'. The same dictionary states the usage of the term in these words - 'Although there is considerable overlap, impracticable and impractical are not used in exactly the same way. Impracticable means 'impossible to carry out' and is normally used for a specific procedure or course of action, ..... Impractical, on the other hand, tends to be used in more general senses, often to mean simply 'unrealistic' or 'not sensible''.
18. Having regard to the fact that if dictionary meaning is given effect to, Clause 3 of the said notification would become redundant, we are of the opinion that the stand taken by the respondent keeping in view the peculiar facts and circumstances of the case must be accepted.
19. Furthermore, it is well known, the Court in exercise of its jurisdiction under Article 226 of the Constitution of India normally does not interfere with an executive policy.
20. In Ugar Sugar Works Ltd.'s case (Supra), it has been held:-
'18. The challenge, thus, in effect, is to the executive policy regulating trade in liquor in Delhi. It is well settled that the courts, in exercise of their power of judicial review, do not ordinarily interfere with the policy decisions of the executive unless the policy can be faulted on grounds of mala fide, unreasonableness, arbitrariness or unfairness, etc. Indeed, arbitrariness, irrationality, perversity and mala fide will render the policy unconstitutional. However, if the policy cannot be faulted on any of these grounds, the mere fact that it would hurt business interests of a party, does not justify invalidating the policy. In tax and economic regulation cases, there are good reasons for judicial restraint, if not judicial deference, to judgment of the executive. The courts are not expected to express their opinion as to whether at a particular point of time or in a particular situation any such policy should have been adopted or not. It is best left to the discretion of the State.'
21. In Narmada Bachao Andolan Etc. v. Union of India and Ors. : AIR2000SC3751 the Apex Court has held:-
'...At the same time, in exercise of its enormous power, the Court should not be called upon or undertake governmental duties or functions. The Courts cannot run the Government nor the administration indulge in abuse or non-use of power and get away with it. The essence of judicial review is a constitutional fundamental. The role of the higher judiciary under the constitution casts on it a great obligation as the sentinel to defend the values of the constitution and rights of Indians. The Court must, thereforee, act within their judicially permissible limitations to uphold the rule of law and harness their power in public interest. It is precisely for this reason that it has been consistently held by this Court that in matters of policy the Court will not interfere. When there is a valid law requiring the Government to act in a particular manner the Court ought not to, without striking down the law, give any direction, which is not in accordance with law. In other words, the Court itself is not above the law.
In respect of public projects and policies, which are initiated by the Government the Courts should not become an approval authority. Normally such decisions are taken by the Government after due care and consideration. In a democracy welfare of the people at large, and not merely of a small section of the society, has to be the concern of a responsible Government. If a considered policy decision has been taken, which is not in conflict with any law or is not mala fide, it will not be in Public Interest to require the Court to go into and investigate those areas, which are the function of the executive. For any project which is approved after due deliberation the Court should refrain from being asked to review the decision just because a petitioner in filing a PIL alleges that such a decision should not have been taken because an opposite view against the undertaking of the project, which view may have been considered by the Government, is possible. When two or more options or views are possible and after considering them the Government takes a policy decision it is then not the function of the Court to go into the matter afresh and, in a way, sit in appeal over such a policy decision.'
22. The Courts and should not be called upon to undertake the Governmental duties and functions.
In Balco Employees Union (Regd.) v. Union of India and Ors. : (2002)ILLJ550SC , the aforementioned principles have been reiterated by the Apex Court and wherein upon noticing several earlier decisions, it was stated:-
'It is evident from the above that it is neither within the domain of the Courts nor the scope of the judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are our Courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical.'
23. In M/s. Rajasthan Spinning And Weaving Mills Limited's case (Supra), the law has been laid down in the following terms:-
'16. Lastly, it is for the assessed to establish that the goods manufactured by him come within the ambit of the exemption notification. Since it is a case of exemption from duty, there is no question of any liberal construction to extend the term and the scope of the exemption notification. Such exemption notification must be strictly construed and the assessed should bring himself squarely within the ambit of the notification. No extended meaning can be given to the exempted item to enlarge the scope of exemption granted by the notification.'
24. For the reasons aforementioned, there is no merit in these writ petitions, which are accordingly dismissed. However in the facts and circumstances of the cases, there shall be no order as to costs.