Smt. Snehlata Vs. Union of India (Uoi) and anr. - Court Judgment

Excerpt:
- section 2(f): [dipak misra, k.k. lahoti & rajendra menon, jj] service tax - packaging and bottling of liquor whether amounts to manufacture within meaning of section 2(f) of central excise act 1944? finance act 932 of 1994), section 65 (76 b) (as amended on 16.6.2005) - held, the first limb of the inclusive definition of the manufacture under section 2(f) of central excise act has a very wide connotation. as the definition clause lays down an inclusive facet, the term manufacture has to be construed in a natural and plain manner and would include any process incidental or ancillary to the completion of a manufactured product. keeping in view the context in which the term manufacture has been used, it would take in its fold incidental and ancillary process in the manufacture or finishing of any manufactured product. it does not leave any room for doubt that an allied process should be integral and inextricable part of manufacture of completeness and presentability of the manufactured product. section 65(76b) of finance act used the words but it does not include. thus it is a definition which has the inclusive as well as exclusive facet. by virtue of the same it may include certain things and exclude others. it is well settled principle of law that a definition is not to be read in isolation and has to read in context of phrase which it defines, releasing that function of a definition is to give precision and certainty to the word or phrase which would otherwise be vague and uncertain. regard being had to the exclusionary fact in the finance act, though a limited one it would exclude the manufacturing process as defined under section 2(f) of the 1944 act. keeping in view the aforesaid dictionary clauses and circulars issued by the c.b.e.c. it is quite luminescent that would manufacture has to be understood in a broader sense and not to be confined or restricted to the excisable product in the act. it would include all processes which amount to manufacture whether or not the final product is an excisable product. in the process of manufacturing of country spirit, the over proof spirit which is not potable is reduced to issuable strength, which is potable. colouring and flavouring agents are added at the time of maturation. thereafter the liquor is supplied in sealed bottles to the retail contractors. this is the process of treatment given to over proof spirit in order to render it fit for human consumption in the form of country liquor. if the process is analysed there cannot be any scintilla of doubt that the process involves the manufacturing one under the provisions of section 2(f) of central excise act, 1944. as per the m.p. country spirits rules as well as clause 6 of the tender conditions it is mandatory for a distiller to supply country liquor in sealed bottles and not otherwise. therefore, packaging and bottling of liquor come within the ambit and sweep of manufacture within the meaning of clause (f) of section 2 central excise act, 1944 in view of the definition contained in section 65(76b) of the finance act especially keeping in view the exclusionary facet and further regard being had to the circular issued by central board of excise and customs. - 4. having heard learned counsel for the petitioner and the respondents and after perusing the petition, reply as well as the documents filed herein, this court is of the opinion that as per provision of the finance act, 1997 wherein chapter iv is for vdi scheme, 1997 and according to section 64, charge of tax on voluntarily disclosed income is prescribed.orders.l. kochar, j.1. the petitioner has filed this petition under article 226 of the constitution of india challenging the order dt. 30th dec, 1999 passed and conveyed to the petitioner by respondent no. 2, cit, bhopal (annex. p/l) whereby, the declaration made by the petitioner, under the provisions of voluntary disclosure of income scheme, 1997 (hereinafter referred to as the vdi scheme, 1997) submitted on 9th dec, 1997 before the it department for issuance of certificate as per provisions under section 68(2) of vdi scheme, 1997, was refused to be entertained on the ground that the gold ginnis claimed to have been acquired at the time of marriage on 11th july, 1959 and declaration was sought for the asst. yr. 1963-64 whereas the valuation of the gold ornaments were done as on 1st april, 1962 which was not in accordance with the provisions of the scheme.2. learned counsel for the petitioner has submitted that under the vdi scheme, 1997, any income which was not disclosed prior to december, 1997, could be declared, for which the assessment (sic-retum) was not filed as per provisions under section 139 of the it act. learned counsel for the petitioner has pointed out annex. p/6 wherein it is mentioned that the petitioner acquired 110 gold ginnis on 11th july, 1959 at the time of her marriage relevant to asst. yr. 1960-61. therefore, the same can be considered for issuance of certificate under the vdi scheme, 1997.3. on the other hand, learned counsel for the respondents has submitted that as per own showing of the petitioner, the valuation was done on 1st april, 1962. therefore, the said amount would be considered only for the asst. yr. 1963-64. apart from this, he has also submitted that the gold ginnis were received by the petitioner at the time of marriage from her various relations as gift, therefore, the same could not be considered as income acquired prior to vdi scheme, 1997. thus, the respondent no. 2 has rightly refused to issue certificate to the petitioner.4. having heard learned counsel for the petitioner and the respondents and after perusing the petition, reply as well as the documents filed herein, this court is of the opinion that as per provision of the finance act, 1997 wherein chapter iv is for vdi scheme, 1997 and according to section 64, charge of tax on voluntarily disclosed income is prescribed. the provision of main section is reproduced thus:64. charge of tax on voluntarily disclosed income.-(1) subject to the provisions of this scheme, where any person makes, on or after the date of commencement of this scheme, but on or before the 31st day of december, 1997, a declaration in accordance with the provisions of section 65 in respect of any income chargeable to tax under the it act for any assessment year.5. according to this main provision, any person could make a declaration in accordance with the provisions of section 65 in respect of any income earned prior to 31st day of december, 1997, chargeable to tax under the it act, for any assessment year. 'it act' is defined in this scheme under section 63(b) i.e. 'it act means the it act, 1961' and in it act, 'income' is defined under section 2 sub-section (24) and in definition of income, the receipt of any cash or coin at the time of marriage by the spouse are not covered. therefore, the receipt of 110 gold ginnis at the time of marriage by the petitioner on 11th july, 1959 from her relations, would not fall within the definition of 'income' for which the return could not be filed as per provision under section 139 of the it act.6. the receipt of 110 gold ginnis by the petitioner at the time of marriage from her relations would, at the most be considered as gift received at the time of marriage and gift is not included in the definition of income. therefore, as per vdi scheme, 1997, for receipt of 110 gold coins in the year 1959, the petitioner cannot be granted required certificate. though the respondent no. 2 has not considered this aspect of the matter, but since it is a pure question of law and the respondents have specifically raised this question in their return, therefore, the same can be considered by this court.7. in the result, it is held that the petitioner is not entitled for consideration of her claim under the provisions of vdi scheme, 1997. therefore, for the reasons as aforesaid, this petition is hereby dismissed. there shall be no orders as to costs.

Judgment:
ORDER

S.L. Kochar, J.

1. The petitioner has filed this petition under Article 226 of the Constitution of India challenging the order dt. 30th Dec, 1999 passed and conveyed to the petitioner by respondent No. 2, CIT, Bhopal (Annex. P/l) whereby, the declaration made by the petitioner, under the provisions of Voluntary Disclosure of Income Scheme, 1997 (hereinafter referred to as the VDI Scheme, 1997) submitted on 9th Dec, 1997 before the IT Department for issuance of certificate as per provisions under Section 68(2) of VDI Scheme, 1997, was refused to be entertained on the ground that the gold Ginnis claimed to have been acquired at the time of marriage on 11th July, 1959 and declaration was sought for the asst. yr. 1963-64 whereas the valuation of the gold ornaments were done as on 1st April, 1962 which was not in accordance with the provisions of the Scheme.

2. Learned counsel for the petitioner has submitted that under the VDI Scheme, 1997, any income which was not disclosed prior to December, 1997, could be declared, for which the assessment (sic-retum) was not filed as per provisions under Section 139 of the IT Act. Learned counsel for the petitioner has pointed out Annex. P/6 wherein it is mentioned that the petitioner acquired 110 gold Ginnis on 11th July, 1959 at the time of her marriage relevant to asst. yr. 1960-61. Therefore, the same can be considered for issuance of certificate under the VDI Scheme, 1997.

3. On the other hand, learned Counsel for the respondents has submitted that as per own showing of the petitioner, the valuation was done on 1st April, 1962. Therefore, the said amount would be considered only for the asst. yr. 1963-64. Apart from this, he has also submitted that the gold Ginnis were received by the petitioner at the time of marriage from her various relations as gift, therefore, the same could not be considered as income acquired prior to VDI Scheme, 1997. Thus, the respondent No. 2 has rightly refused to issue certificate to the petitioner.

4. Having heard learned Counsel for the petitioner and the respondents and after perusing the petition, reply as well as the documents filed herein, this Court is of the opinion that as per provision of the Finance Act, 1997 wherein Chapter IV is for VDI Scheme, 1997 and according to Section 64, charge of tax on voluntarily disclosed income is prescribed. The provision of main section is reproduced thus:

64. Charge of tax on voluntarily disclosed income.-(1) Subject to the provisions of this Scheme, where any person makes, on or after the date of commencement of this Scheme, but on or before the 31st day of December, 1997, a declaration in accordance with the provisions of Section 65 in respect of any income chargeable to tax under the IT Act for any assessment year.

5. According to this main provision, any person could make a declaration in accordance with the provisions of Section 65 in respect of any income earned prior to 31st day of December, 1997, chargeable to tax under the IT Act, for any assessment year. 'IT Act' is defined in this scheme under Section 63(b) i.e. 'IT Act means the IT Act, 1961' and in IT Act, 'income' is defined under Section 2 Sub-section (24) and in definition of income, the receipt of any cash or coin at the time of marriage by the spouse are not covered. Therefore, the receipt of 110 gold Ginnis at the time of marriage by the petitioner on 11th July, 1959 from her relations, would not fall within the definition of 'income' for which the return could not be filed as per provision under Section 139 of the IT Act.

6. The receipt of 110 gold Ginnis by the petitioner at the time of marriage from her relations would, at the most be considered as gift received at the time of marriage and gift is not included in the definition of income. Therefore, as per VDI Scheme, 1997, for receipt of 110 gold coins in the year 1959, the petitioner cannot be granted required certificate. Though the respondent No. 2 has not considered this aspect of the matter, but since it is a pure question of law and the respondents have specifically raised this question in their return, therefore, the same can be considered by this Court.

7. In the result, it is held that the petitioner is not entitled for consideration of her claim under the provisions of VDI Scheme, 1997. Therefore, for the reasons as aforesaid, this petition is hereby dismissed. There shall be no orders as to costs.