Patna High Court
Tata Iron And Steel Co. Ltd. vs Union Of India (Uoi) on 31 January, 1989
Equivalent citations: 1989(42)ELT353(PAT)
Author: Satya Brata Sinha
Bench: Satya Brata Sinha
JUDGMENT Satya Brata Sinha, J.
1. Both these appeals were heard together and are being disposed of by this common judgment. First Appeal No. 102 of 1977 (R) arises out of a judgment and decree dated 20th December, 1976 passed by Shree J.K. Prasad, First Additional Subordinate Judge, Jamshedpur in Money Suit No. 61 of 1966, whereby and whereunder, the said learned court dismissed the plaintiff-appellant's suit. The said suit was filed by the plaintiff, inter alia, for recovery of a sum of Rs. 41,79,141.68 paisa and therein it prayed for following reliefs:-
(i) A declaration that the Central Excise and Salt Act of 1944 and the Rules thereunder are invalid in so far as they impose the obligation of payment of duty on articles as a condition of their removal without any machinery or procedure for assessment of disputed liabilities.
(ii) A direction to the defendants to refund the disputed amount of Rs. 41,79,141.68 of Excise Duty levied which has been collected from the plaintiff along with interest at the rate of 6 per cent per annum from the date of the institution of the suit till date of realisation.
(iii) A decree quashing the aforesaid orders passed
(a) by the Assistant Collector of Central Excise, Jamshedpur;
(b) by the Collector for Central Excise, Patna and
(c) by the Government of India in the Ministry of Finance.
(iv) A direction cancelling the debit made in the current account of the plaintiff in respect of duty levied on steel ingot produced out of old steel skull scraps.
(v) A decree for the costs of the suit may also be passed against the defendants with future interest.
(vi) Such other reliefs as may appear fit and proper.
2. First Appeal No. 14 of 1979 (R) arises out of a judgment and decree dated 11th September, 1978 passed by Shree Ram Chandra Prasad, Second Additional Subordinate Judge, Jamshedpur, in Money Suit No. 62/2 of 1966/ L976. In the said suit, the plaintiff-appellant prayed for following reliefs:-
(i) A declaration that the Central Excise and Salt Act, 1944 and the Rules thereunder are invalid in so far as they impose the obligation of payment of duty on articles as a condition of their removal without any machinery or procedure for assessment of disputed liabilities.
(ii) A decree quashing the orders passed
(a) by the Assistant Collector of Central Excise, Jamshedpur;
(b) by the Collector of Central Excise, Patna and
(c) by the Government of India in the Ministry of Finance referred to above,
(iii) A direction to the defendants to refund the disputed amount of Rs.
2,80,593.44 of Excise Duty levied which has been collected from the plaintiff along with interest at the rate of 6% per annum from the date of the institution of the suit till date of realisation.
(iv) Issue of directions cancelling the debit made in the current account of the plaintiff in respect of duty levied on steel ingot produced out of scrap obtained from paid steel ingots and products.
(v) A decree for costs of the suit with future interest.
(vi) Such other reliefs as may appear fit and proper.
3. Suffice it to say, in both the suits the allegations made in the plaint are identical. As the facts of the cases have been stated in details in the impugned judgments of the learned trial court, it is not necessary to deal with the facts of case in great details.
According to the plaintiff, it manufactures steel ingots out of the iron and steel scraps collected from their slag dump.
It is an admitted case of the parties that the Central Government in exercise of its power conferred upon it under Rule 8 Sub-rule 1 of Central Excise Rules of 1944 issued a Notification dated 24-4-1962 bearing No. G.S.R. 7:5 of 1962, whereby and whereunder, certain exemption was granted in respect of payment of excise duties on steel ingots if the manufacture thereof is made out of duty paid pig iron or out of old Iron and steel scraps obtained from duty paid products.
4. According to the plaintiff, it had been manufacturing steel ingots from duty paid steel scraps. It is admitted that prior to 24-4-1962 excise duty used to be levied only on steel ingots manufactured out of the old steel scraps. It is the case of the plaintiff that the scraps arising out of the steel ingots are produced from skull scraps in admixture with other materials and the exemption granted in term of Notification No. 75 of 1962 as mentioned hereinbefore applies to steel ingots made out of such scraps.
5. It is further the case of the plaintiff that it employed Messrs Hecket Engineering Company, a company of United States of America for recovery of iron and steel scraps by their patented processes for remelting the same into iron and steel ingots out of the scraps in the said dump as well as fresh scraps obtaining as a result of the process of manufacturing day after day. The said Messrs Hecket Engineering Company allegedly by their processes made old scraps available to the plaintiff for remelting on receipt of processing charges agreed to by and between the appellant and the said company.
It is also alleged in the plaint that Messrs Hecket Engineering Company had been maintaining registers in respect of steel and iron scraps showing the quantity of:-
(a) Fresh steel or iron scraps
(b) Steel or iron scraps from the dumps
(c) Steel or iron scraps given for remelting.
According to the plaintiff it has also been maintaining corresponding registers.
6. The Assistant Collector, Central Excise allegedly by a letter dated 12-12-1963 conveyed to the appellant the following: -
"(a) It has been decided to treat the scrap recovered from the dumps as pre-excise stock. Accordingly if such skull scrap is cleared as such, no Central Excise duty will be leviable thereon;
(b) If the said scrap from the dumps is melted in the plaintiffs factory, no Central Excise duty will similarly be leviable thereon;
(c) Duty will be levied on steel ingots or steel products produced out of the skull scrap from the said dumps."
It appears that there has been a series of correspondences between the Assistant Collector, Jamshedpur and the plaintiff company relating to the method as to how and in what manner the accounts with regard to the availability of the skull scraps and other-scraps would be maintained.
7. The plaintiff claimed exemption from payment of excise duty purported to be in terms of the aforementioned notification bearing No. 75/62 as allegedly it had been manufacturing steel ingots from skull scraps and other old scraps or duty paid iron and steel.
8. The claim of the plaintiff was, however, rejected by the department and thereafter it filed a writ application in this Court which was registered as C.W.J.C. No. 1238/65 which was allowed and the Asstt; Collector was directed to readmit the claim of the plaintiff for refund and to pass order according to law bearing in mind the observations contained in the said judgment. The said writ application was filed during the pendency of this suit. The Assistant Collector rejected the claim for refund of Rs. 41,79,141.60 paisa.
9. The defendant in their written statement inter alia contended that the said suit was not maintainable as the Civil Court has no jurisdiction to entertain a suit of that nature. It was further alleged that the aforementioned notification dated 24-4-1962 was not applicable to the case of the plaintiff. The defendants in this connection has referred to a subsequent notification bearing No. 53 of 1964 dated 1-3-1964 for the purpose of showing that the manufacture of steel ingots will be excluded from payment of excise duty if the same is manufactured exclusively out of old iron and steel scraps. The defendants have also given in details the alleged system of the accounting followed by the plaintiff in respect of receipts and issues for internal consumption of the skull scraps. The defendants have further stated in details the process followed by the plaintiff company with regard to the manufacture of steel ingots.
10. The learned trial court framed as many as seven issues which are as follows:
"(i) Whether the plaintiff has got cause of action and right to sue?
(ii) Whether the suit is barred by time, waiver, aquiscence and estoppel?
(iii) Whether exemption granted by impugned Notification No. 75/62 is available to the plaintiff?
(iv) Whether on facts and circumstances of the case, the plaintiff is entitled to the exemption and if so, to what extent?
(v) Whether valid notice Under Section 80 C.P.C. was duly served upon the defendant?
(vi) Whether the plaintiff is entitled to the decree as claimed?
(vii) Any other relief?"
11. The learned trial court has discussed issue No. 3 in paragraph 8 of his judgment. According to the learned court below, the said Notification No. 75/62 was not applicable in relation to the steel in gots manufactured by the appellant.
The learned trial court, despite the said finding proceeded to consider issue No. 4 and held that the plaintiff has not been able to prove its case on facts as well.
12. Mr. Bishwanath Prasad, the learned counsel appealing on behalf of the appellant has raised two fold contentions.
Firstly, the learned counsel submitted that the learned court below has committed a serious error of law in construing the notification in question by reading the word 'exclusively' therein. According to the learned counsel, the notification has got to be read as it is and it is not permissible in terms of well known cannon of interpretation of statute to introduce a word or to read the same in a manner so as to frustrate the purport and object for which the said notification was issued. The learned counsel in this connection has placed reliance upon a decision reported in A.I.R 1975 Supreme Court, 2279 (Aluminium Corporation of India Ltd. v. Union of India and Ors.) and A.I.R. 1976 Supreme Court, 599 (Union of India v. Tata Iron and Steel Co. Ltd.).
13. The learned counsel in this connection, took me through the notification dated 24-4-1962 as well as the subsequent notification dated 1-3-1964 and submitted that the subsequent notification does not stand as a bar for construing the notification dated 24-4-1962 in such a manner so as to enable the plaintiff from obtaining exemption from payment of excise duty even if steel ingots were manufactured from old skull scraps in admixture with some other materials which was necessitated because of the processes involved in manufacture of steel ingots.
The said notifications read as under: -
"Government of India, Ministry of Finance (Department of Revenue) New Delhi, dated 24-4-1962.
G.S.R. In exercise of the powers conferred by Sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, as inforce in India and as applied to the State of Pondicherry, the Central Government hereby exempts steel ingots falling under Item No. 26 of the 1st schedule to the Central Excise and Salt Act, 1944 (1 of 1944) ind specified in the corresponding entry in column (3) of the said table.
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SI. Description Duty No.
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1. If produced out of scrap obtained from duty paid pig iron. Rs. 30 per M.T.
2. If produced out of old iron or steel scrap or scraps ob- Nil.
tained from duty paid steel ingots or products.
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Notification No. 53/64 dated 1-3-1964.
"In exercise of the powers conferred in sub rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts steel ingot falling under Item No. 26 the First Schedule to the Central Excise and Salt Act, 1944 (1 of 1944) product from fresh unused steel melting scraps, exclusively or inadmixture with any other material so much of the duty of excise as is proved to have been paid on such fresh unused steel melting scrap under Item No. 26 of the said schedule provided that no set off of duty has already been availed of in respect of such scrap [M.F. (D.R.) C. Ex. Notification No. 53/64 dated 1-3-1964]".
14. Secondly the learned counsel submitted that the learned Court below while deciding issue No. 4 had not at all taken into consideration the effect, purport and intent of Exhibits, 4,4/A, 4/B to 4/13, Exhibit 10 series and other relevant documents and oral evidences on record in their proper perspective and thus committed a serious error in deciding the said issue against the plaintiff-appellant.
15. Mr. Debi Prasad, learned counsel appearing on behalf of the respondent, on the other hand, submitted that the Civil Court has no jurisdiction to entertain the suit in view of Sections 35, 36 and 40 of the Central Excise and Salt Act. According to the learned counsel the suit involves a question of interpretation of the Notification No. 75 of 1962 and as the same was within the exclusive domain of the authorities of the Central Excise Department, the jurisdiction of the civil court to entertain a suit is barred by necessary implication. The learned counsel in support of the aforementioned submission has placed strong reliance on a decision of the Allahabad High Court in Union of India v. Shri Shadilal Sugar and General Mills Ltd. reported in 1981 Excise Law Times, page 210.
16. The learned counsel further submitted that in the facts and the circumstances of this case and particularly regard being had to the processes of manufacture adopted by the plaintiff-appellant for manufacturing steel ingots, the aforementioned Notification No. 75 of 1962 will have no application in the instant case.
The learned counsel in this connection has placed strong reliance upon a decision of the Supreme Court in State of Kerala and Anr. v. N.M. Thomas and Ors., reported in A.I.R. 1976 Supreme Court, 490. The learned counsel, however, very fairly conceded that if the aforementioned two objections are over-ruled the matter has to be remitted to the learned court below either for a retrial or in terms of Order 41 Rule 25 of the Code of Civil Procedure.
17. So far as first Appeal No. 14 of 1979 (R) is concerned, it appears that the plaintiff has filed the aforementioned suit for recovery of a sum of Rs. 1,79,141.68 paisa.
The reliefs claimed in the said suit were also based on the aforementioned exemption Notification No. 75 of 1962 dated 24-4-1962. Originally the plaint disclosed that during the relevant period i.e. 24-4-1962 to 29-2-1964 the plaintiff had melted at total quantity of 1,11,034.364 M.T. old iron for manufacturing the steel ingots but the plaint was amended later on. In the said amended plaint it was stated that during the^foremen-tioned period the aforementioned quantity of old steel scrap only were melted. In the aforementioned suit also the defendants took the self same plea as was taken in Money Suit No. 61/2 of 1966-76. It appears that in the aforementioned suit the plaintiff could not produce the original register and other documents which were filed in Money Suit No. 61/2 of 1966-76.
The learned trial court, held that the plaintiff could not claim the benefit of the aforementioned notification as it was not producing steel ingots exclusively from steel skull scraps. If further held that even on facts and documents filed by the plaintiff-appellant could not be looked into because the same were merely office copies of the original documents and thus inadmissible in evidence.
The learned trial court on the basis of his aforementioned findings dismissed the suit.
In this case also the counsel for the parties advanced the same argument.
17A. In this view of the matter the questions that fall for consideration in this appeal are as follows: -
(i) Whether the civil court's jurisdiction is barred by necessary implication in view of Sections 35, 36 and 40 of the Central Excise and the Salt Act ?
(ii) Whether the exemption Notification of 75/62 is applicable in the facts and the circumstances of this case as the plaintiff had been manufacturing steel in-gots not exclusively out of old duty paid skull scraps but after admixtur-ing certain other materials therein therewith ?
(iii) Whether the appellant has been able to prove its claim for recovery of the amount mentioned in the two suits ?Re. Question No. 1
18. Sections 35, 36 and 40 of the Central Excise and Salt Act read as follows:-
"35. Appeals:- (1) Any person deeming himself aggrieved by any decision or order passed by a Central Excise Officer under this Act or the rules made thereunder may, within three months from the date of such decision or order, appeal therefrom to the Central Boards of Excise and Customs constituted under the Central Board of Revenue Act, 1963, (54 of 1963), or, in such cases as the Central Government directs, to any Central Excise Officer not inferior in rank to an Assistant Collector of Central Excise and empowered in that behalf by the Central Government. Such authority or officer may thereupon make such further inquiry and pass such order as he thinks fit, confirming, altering or annulling the decision or order appealed against:
Provided that no such order in appeal shall have the effect of subjecting any person to any greater confiscation or penalty than has been adjudged against him in the original decision or order.
(2) Every order passed in appeal under this section shall, subject to the power of revision conferred by Section 36, be final.
36. Revision by. Central Government- The Central Government may on the application of any person aggrieved by any decision or order passed under this Act or the rules made thereunder by any Central Excise Officer or by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963, (54 of 1963), and from which no appeal lies, reverse or modify such decision or order.
40. Protection of action taken under the Act - (1) No suit, suit, prosecution or legal proceeding shall lie against the Central Government or any officer of the Central Government or a State Government for anything which is done, or intended to be done, in good faith, in pursuance of this Act or any rule made thereunder:-
(2) No proceeding, other than a suit, shall be commenced against the Central Government or any officer of the Central Government or a State Government for anything done or purported to have been done in pursuance of this Act or any rule made thereunder, without giving the Central Government or such officer a month's previous notice in writing of the intended proceeding and of the cause thereof or after the expiration of three months from the accrual of such cause."
19. Admittedly, Central Excise and Salt Act does not contain any provision barring the jurisdiction of the Civil Court expressly.
20. The argument advanced by Mr. Debi Prasad appears to be on the basis that as Sections 35 and 36 provide for adequate internal remedies available to an assessee for redressal of its grievances, the jurisdiction of the Civil Court is barred by necessary implication.
21. In the decision of the Allahabad High Court relied upon by Mr. Prasad, it has been held that an interpretation of a notification being within the exclusive domain of the authorities under Central Excise and Salt Act, the jurisdiction of the Civil Court in relation to such matter is barred.
With utmost respect to the learned Judges, I am unable to subscribe the aforementioned view. However, in this case it is not necessary to go into the aforementioned question in details inasmuch as the question with regard to the maintainability of the suit was decided as a preliminary issue and therein it was held that the civil court has no jurisdiction to try the said suit. The plaintiff-appellant thereafter, preferred an appeal against the aforementioned order in this Court and by an order dated 21-12-1973 this Court set aside the aforementioned order holding that the suit is maintainable.
22. Apart from the same, it is now well settled that the onus lies upon the party to show that the jurisdiction of the civil court is barred.
23. The very fact that Sub-section 2 of Section 40 of the Central Excise and Salt Act provides that no suit shall be commenced against the Central Government or any officer of the Central Government without giving a month's previous notice is pointer to the fact that the legislation in its wisdom contemplated that a suit would be maintainable as against the Central Government or any other officers of the Central Government or State Government for anything which is done or purported to have been done under the act or any rule made thereunder. From a perusal of the aforementioned provisions, in my opinion, it is absolutely clear that the legislature had not in any way expressed its intention that an order passed by an officer of the Central Government cannot be challenged in the civil court.
24. This aspect of the matter has been considered recently by a full bench of this Court in Paritosh Maity v. Ghasiram Maity, reported in 1987 P.L.J.R., 354 wherein after taking into consideration various decisions of the Supreme Court and the other High Courts, the basic propositions relating to the outer of the jurisdiction of the Civil Court were laid down thus "Both generally and specifically the suits involved in this set of appeal are suits of a Civil nature and jurisdiction of the Civil Court can only be barred if firstly, it is expressly excluded or secondly, if it is so done by necessary implication. Indeed, in this context some basic propositions are so well established by judicial pronouncements that they need to be only recapitulated, viz.
(i) A litigant having a grievance of a civil nature has, independently of any statute, a right to institute a suit in civil court unless its cognizance is either expressly or impliedly barred and there is a strong presumption in favour of the jurisdiction of a Civil Court See (1) A.I.R. 1964 S.C. 1126 (V.S. Sadasopa Naidu v. Bakthavatsalam and Anr.), A.I.R. 1961 S.C. 149 (Brij Raj Singli and Anr. v. Laxman Singh and Anr.) and (3) A.I.R. 1961 Patna 142-F.B. (Patna Municipal Corporation v. Ram Bachan Lal).
(ii) The exclusion of jurisdiction of Civil Court is not to be readily inferred. A statute ousting jurisdiction of the Civil Court must do so either in express terms or by use of such language as would necessarily lead to such an inference See, A.I.R. 1969 S.C. 439 (Musamia Immam Haider Box Razvi v. Rabari Govindbhai Ratnabhai and Ors.) and A.I.R. 1969 S.C. 560 (Dewaji v. V. Ganpatlal).
(iii) The onus is on the party who seeks to oust the jurisdiction of the Civil Court to establish its stand. Further, a statute ousting the jurisdiction of the Civil Court must be strictly construed See A.I.R. 1966 S.C. 1718 (Abdul Waheed Khan v. Bhawani and Ors.)
(iv) Even if the jurisdiction of the Civil Court is excluded by statute, in case where the provisions of such statute have not been complied with, or a statutory tribunal has not acted in confirmity with the fundamental principles of judicial procedure, the Civil Gouts would still have jurisdiction to examine such cases See A.I.R. 1966 S.C. 1718 (Abdul Waheed Khan v. Bhawani and Ors.)."
25. In view of the aforementioned discussions, in my opinion, not only it was not open to the respondents to reagitate the question of maintainability of the suit, the suit is also otherwise maintainable.
Re. Question No. 226. From a plain reading of the notification dated 24-4-1962, it will be evident that the same is an exemption notification and the language used there in is plain and unambiguous. The aforementioned notification dated 24-4-1962 being an exemption notification, the same has to be construed, in case of ambiguity, in favour of the asses-see and against the department.
Rule 8 of the Central Excise Rules empowers the Central Government to exempt any excisable goods from whole or any part of duty leviable on such goods by a notification published in the official gazette, subject to such conditions as may be specified in the notification. The said notification clearly provides for exemption in respect of payment of excise duty if steel ingots falling under Item No. 26, only subject to the following conditions: -
(i) If produced out of scrap obtained from duty paid pig iron duty payable is Rs. 30 per M.T.;
(ii) If produced out of old iron and steel scrap or scrap obtained from duty paid steel ingots or products, no duty is payable.
27. In the instant case it is admitted by the parties that condition No. 2 of the aforementioned notification requires interpretation.
28. The learned trial court in the impugned judgment laid emphasis on the words of 'out of and held that question of exemption will arise only if the steel ingots are produced out of old scraps without any admixture of any other material whatsoever. The learned trial court while deciding the said issue as against the plaintiff-appellant also purported to have relied upon the subsequent notification bearing No. 53 of 1964. It also took into consideration the fact the said Notification No. 75/62 was rescinded by Notification No. 21/64.
28A. It is admitted that in view of the process of manufacturing steel ingots adopted by the plaintiff-appellant i.e. the 'open hearth system', it was not possible to produce steel ingots exclusively out of old skull scraps. The question, therefore, which arises for consideration is as to whether the plaintiff is debarred from claiming exemption from payment of excise duty on steel ingots only because some other material is ad-mixtured with old skull scraps for the purpose of manufacturing the same.
29. In Aluminium Corporation of India Ltd. v. Union of India and Ors., reported in A.I.R. 1975 Supreme Court, 2279, the Supreme Court, was considering a similar notification, which reads as follows:-
"The Central Government exempts the following aluminium manufactures, namely, plates, sheets, circles, strips and foils in any form or size, in the manufacture of which aluminium in any crude from including with the same duty on the same commodity imposed in prior years. Item No. 27 which relates to aluminium, reads:-
Rate of duty Three hundred rupees per metric tonne. Five hundred rupees per metric tonne ingots, bars, blocks, slabs, billets, shots and pellets made out of old aluminium scrap or scrap obtained from the virgin metal on which the appropriate excise duty has been paid from so much of the duty leviable thereon as is in excess of Rs. 200.00 per metric tonne".
In the said case also a submission was raised on behalf of the Union of India that sheets, circles etc. which had been manufactured wholly and solely out of duty-paid slabs could be the subject matter of exemption. But it was held, this condition of eligibility for concessional rate of duty is beyond the notification altogether and perhaps beyond reason."
The Supreme Court laid down the Law succinctly thus:-
"13. To return what has been taken wrongly is as much a duty and grace of government as to levy relentlessly and fully what is due. Default in either, not altogether unfamiliar, brings down the confidence of the community in the Administration. That a party should have been put to two expensive and elongated litigations to recover a relatively small sum is regrettable.
14. Assuming that the tax officers have an alibi of two interpretations of the given notification, the question is whether plainer use of language is an art beyond the draftsman's skills? We think not. To liquidate obscurity in legislative language, by abondoning obsolescent vocabulary and style of expression is an overdue measure if we remember the Renton Committee's observations made for British consumers but applies a fortiori to our Republic.
"There is hardly any part of our national life or of our personal lives that is not affected by one statute or another. The affairs of local authorities nationalised industries, public corporations and private commerce are regulated by legislation. The life of the ordinary citizen is affected by various provisions of the statute book from cradle to grave." The rule of law is the cornerstone of democracy and how can there be a rule of law in society if the members, the bulk of whom are too poor to buy legal services, cannot decide the legislator's law and therefore obey it? Incomprehensible law annoys the Administration and estranges the citizen at a time when quick justice and less sterile litigation are the desiderata. The command of the law can claim the allegiance of the law only by simplicity in legislation."
30. Similarly in Union of India and Ors. v. Tata Iron and Steel Co., reported in A.I.R. 1976 Supreme Court 599 while confirming a decision of this Court in Tata Iron and Steel Company Ltd. v. Union of India, reported in 1969 P.L.J.R. 414, the Supreme Court held as follows:-
Second Notification No. 30/60 grants exemption to duty-paid pig iron. The High Court rightly said that the Notification does not say that exemption is granted only when duty-paid pig-iron is used and that the exemption would not be available if duty-paid pig iron is mixed with other non-duty paid materials if the intention of the Government were to exclude the exemption to duty-paid pig iron when mixed with other materials then the notification would have used the expression on "only" or "exclusively" or "entirely" in regard to duty-paid pig iron. The object of the notification was to grant relief by exemption duty-paid pig iron."
31. The reliance placed by the learned court below as also by the learned counsel for the respondent in State of Kerala and Anr. v. N.M. Thomas and Ors., reported in 1976 Supreme Court, 490 is wholly misplaced. In that case the Supreme Court was considering the effect and scope of the Kerala State and Subordinate Services Rules and construed a note to Rule 13A in the light of sociological condition and the fact that the same was intended to apply in relation to the people of weaker section. It is now a well known cannon of interpretation of statute, that if the meaning of the words employed in a statute are clear, the same has got to be given effect to without inserting or substracting any word.
Reed Dickerson in his interpretation and Application of Statute at page 135 states the law thus:-
"The essence of the language is to reflect, express, and perhaps even effect the conceptual matrix of established ideas and values that identifies the culture to which it belongs. For this reason, language has been called "conceptual map of human experience."
In Reserve Bank of India v. Peerless Com., reported in 1987 (1) S.C.C. 424 it has been held by the Supreme Court:-
"Interpretation must depend on the text and the context. They are the basis of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when we know why it was enacted. With this knowledge, the statute must be read, first as a whole and then section by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute-maker, provided by such context its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With these glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to any as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place."
32. It is also well known that where an ambiguity of the language arises, an exemption notification has to be interpretated in favour of the assessee and against the department.
In Tata Steel Industries v. Assistant Commissioner of Commercial Taxes and Ors., reported in 1986 P.L.J.R. page 256, a Full Bench of this Court laid down the law after taking into consideration various Supreme Court decisions and decisions of High Courts:
"In this peculiar context, the rule of law that any beneficent tax provision has to be liberally construed would also come into play. Way back in (1960) 38 ITR 241, 257 (Commissioner of Income Tax v. Chuganda & Co. (Securities) it had been observed as follows:-
"Lastly, it was argued by Palkhivala, that, since we are dealing with an exemption clause, if there was any doubt as to the true interpretation of the exemption clause, the exemption should be liberally construed provided no violence is done to the language employed in the section. This, no doubt, has been held to be the proper canon of construction by the Calcutta High Court in Commissioner of Agricultural Income Tax v. Raja Jagdish Chandra Deo (1949) 17 I.T.R. 426, 438 and by the Patna High Court in Kameshwar Singh v. Commissioner of Income Tax (1954) 26 I.T.R. 121, 132 and we certainly accept that canon of construction."
Again a Division Bench of Madras High Court in Commissioner of Income Tax, Tamil Nadu I. v. Simoson and Company, (1980) 122 ITR 283, has held as follows:-
"It is also a well-settled principle of construction that in construing a provision for exemption or relief, it should be liberally construed. The reason behind this rule or interpretation is that the administrative authorities or the courts should not whittle down the plenitude of the exemption or relief granted by Parliament by laying stress on any ambiguity here or there."
Both on principle and precedent, it has, therefore, to be held that a formal resolution of the Government duly published in the official gazette under the name and order of the Governor would squarely come within the ambit of 'notification'. Consequently, the petitioner would be clearly entitled to the exemption under annexure-7."
33. In this view of the matter, in my opinion, it has to be held that the learned trial court misdirected itself in interpreting the notification in question. Further it is also well known that while interpreting one notification unless the same is vague or ambiguous, recourse to other notification is impermissible for construing the said document. In the premises it must be held that the Notification No. 75/62 applies to the case of the appellant.
Re: Question No. 334. From a perusal of the records, it appears that the appellant has produced a large number of documents to prove its claim. It also examined various witnesses in support of its claim.
35. It appears that the plaintiff-appellant divided its claim in two periods - one in respect of the period from 24-4-1962 to 31-3-1963 and another from 1-4-1963 to 29-2-1964. In respect of the period from 24-4-1962 to 31-3-1963 the appellant has proved various returns which are Exhibit 13 series. The appellant has contended that the aforementioned returns and method of accounting submitted by it was approved by the department. For this purpose my attention has been drawn to Exhibit 4/B.
36. The learned court below decided the suit without taking into consideration various documents on record in their proper perspective nor analysed the effect of the same. The effect and purport of Exhibits 4,4/A, 4/B and Exhibit 13 series have not been considered. In paragraph 21 of the impugned judgment, the learned court below merely held that prior to September, 1963 there was no regular account of the scraps maintained on behalf of the plaintiff and then it took into consideration the Exhibit 13 series, Exhibit 4 series and Exhibit 3 series. However, it appears that without discussing the said documents it, inter alia, looked to the ledgers (Exhibit 9 series) and came to the conclusion that in view of the fact that all ledger books were not produced, the plaintiff had not been able to prove its case.
It held as follows :-
"In other word; it cannot be ascertained from the ledger books as to what was the total quantity of old scrap, i.e. dump arising scraps, which was charged during this period. Moreover, Ext. 9 are for period beginning from May, 1963 and no such ledger book was filed for the previous period."
37. It has further been held in paragraph 22 of the impugned judgment that the plaintiff could not prove the recovery rate which was claimed by it and, therefore, the claim of exemption of the plaintiff would materially slum down. In paragraph 25 of the impugned judgment the trial court proceeded on the basis that the plaintiff has not been able to prove the recovery rate as alleged by it.
In the plaint the plaintiff claimed that the recovery rate is 95.65%. For this purpose the plaintiff examined Dr. Rajendra Kumar (p.w.18). The evidence of the expert was rejected by the learned trial court simply on the ground that the figure of metallic content of the earlier scrap were supplied by one Mr. Chakravarty. It further held that there are some discrepancies about the period of displacement test report, inasmuch as the displacement test reports are Exts. 5 to S/z-24 relating to the period of 1964 but no displacement test report was produced for the period of 1962-63. He, therefore, came to the conclusion that as the opinion of Dr. Rajendra Kumar (p.w. 18 ) was based on some unknown dates furnished by Mr. Chakravarty, the recovery rate as calculated by him suffers from an element of uncertainty.
37A. Mr. Bishwanath Prasad learned counsel has rightly submitted that if the learned trial court had taken into consideration the Furnace report which are contained in Exhibit 10 series, the amount of steel skull scraps which was remelted during the relevant period could have been calculated. It could not have been rejected simply on the ground that all furnace reports are not available.
38. The learned court below, in my opinion, has completely misdirected itself in so far as he failed to take into consideration the effect of the aforementioned documents. It is one matter to contend that the plaintiff has not been able to prove its entire claim but in a case of this nature, the nature of fact has to be considered on broad consideration. In a case of this nature where a claim is based upon a number of contemporaneous documents; an opportunity should have been given to the appellant to co-relate one document with the other. The very fact that method of amounting was approved by the defendants and the plaintiff has been able to prove the returns for the period of 24.4.1962 to 31.3.1963, there cannot be any doubt that there are large number of documents in existence which has been verified by the respondent authorities themselves from time to time. The authenticity of these documents are neither in doubt nor in dispute. In this view of the matter it was obligatory on the part of the learned trial court to consider that even if the plaintiff has not been able to prove its entire claim but it might have been able to prove its claim to some extent. The learned trial court has also not considered the effect of oral evidence adduced on behalf of the parties.
39. In First Appeal No. 14 of 1979(R), the learned trial court did not take into consideration the office copies of the documents filed by the plaintiff at all. The said documents admittedly had been filed in Money Suit No! 61 of 1966. In my opinion, in the facts and the circumstances of this case and taking into consideration that records in respect of both the suits are common it would have been in the interest of justice if both the suits were tried analogously and the documents marked in one case would have been considered in the other.
40. In this suit the plaintiff, has, therefore, suffered prejudice by non-consideration of the said documents, in the interest of justice, I am of the opinion that the plaintiff should be given another opportunity to prove all its documents which were filed in Money Suit No. 61 of 1966.
41. I am of the view that the learned trial court has failed to try the issues which arise for consideration in this case and has further failed to determine the questions of fact which appear to me to be essential for arriving decision to the suits on merits and in this view of the matter, I have no other option but to refer the case for re-determination of the fact, the learned court below again and direct that the court; regard being had to the peculiar facts and the circumstances of the case and also the amount involved in the suit, would grant an opportunity to the parties to adduce additional evidence, if required. The learned trial court, in the facts and the circumstances of this case is also directed to try both the suits analogously which in my opinion is essential in the interest of justice. The learned trial court is further directed to try all the issues in the suit except the issues which have been decided by this court herein and shall return the evidence to this court together with its finding thereon and the reasons therefor within six months from the date of the receipt of the court records.
It further appears that the learned trial court has not taken into consideration the reports (Exts. 1 series and Ext. 4 series) wherefrom the quantity of scraps were supplied to appellant to Heckette Engineering Company, which could have been proved. The omission to consider this vital document in their proper perspective has resulted the miscarriage of justice and as such, in my opinion, it requires an order of remand.
42. With the aforementioned observations and directions the case is remanded to the trial court with a direction that it after hearing the parties shall send its report to this Court upon assigning reasons in support of its findings within six months from the date of receipt of the lower court records.