Indian Kanoon - Search engine for Indian Law

39. It is very well settled that the expressions in the notifications for exemption should always be understood by the language employed therein bearing in mind the context in which the expressions occur. "The words used in the provision imposing tax or granting exemption should be understood in the same way in which these are understood in ordinary parlance in the area in which the law is in force or by the people who ordinarily deal with them."

40. It is equally well settled principle that "a person who claims exemption has to establish his case. The principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee - assuming that the said principle is good and sound - does not apply to the construction of an exception or an exempting provision; they have to be construed strictly. A person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision. In case of doubt or ambiguity, benefit of it must go to the State. This is for the reason, viz., each such exception/exemption increases the tax burden on other members of the community correspondingly. Once, of course, the provision is found applicable to him, full effect must be given to it. The notification granting exemption has to be interpreted in the light of the words employed by it and not on any other basis." (For the proposition see: Collector of Central Excise V. Parle Exports (P) Ltd. (S.C.), ; M/s. Novopan India Ltd. Vs. Collector of Central Excise and Customs,, ; and M/s. MSCO Pvt. Ltd. V. Union of India, ).