2005 Supreme(SC) 1076

SUPREME COURT OF INDIA
S.B.Sinha : A.R.Lakshmanan
Government Of India & Ors.
Versus
Indian Tobacco Association
Case No. : 5196 of 2005
Date of Decision : 8/23/05
Advocates Appeared: B.Datta : Hemant Sharma : P.Parmeswaran : Shreekant N.Terdal : L.Nageswar Rao : G.Ramakrishna Prasad : K.P.Kylashamatha Pillai : Mohd.Wasay Khan

Headnote:Customs Tariff Act—Section 3—Incentive scheme by Government of India for cultivators of tobacco as regards export and import whereby 2% incentive was provided out of export carried from notified container depot—Notification dated 7.4.1997 was issued—Payment of additional duty leviable under Section 3 of the Act was granted to those who were issued Duty Establishment Pass Book by Authority —On representation of respondent Association, an amendment in notification was made on 27.11.1997 and Association became entitled to benefit under notification—Respon­dent’s representation that notification dated 27.11.1997 would cover the period from 7.4.1997 to 27.11.1997 to their benefit as being clarificatory in nature was rejected by Government—High Court allowed writ in favour of respondent—Appeal—An exemption notification must be construed having regard to object and purport which it sought to achieve—Notification should be liberally construed when a person is held to be eligible to obtain benefit under it—By notification dated 27.11.1997 only amendment made was the words “Tuticorin and Vishakha­patnam” were substituted by words “Tuticorin, Vishakhapatnam and Kakinada” which were seaports and some inland container depots were also added by substitution—Guntur was one of the inland container depots—By reason of amended notification, Central Government only intended to rectify a mistake and same will have retros­pective effect and retroactive operation — No interference was warranted.

       Held : An exemption notification, it is trite, must be construed having regard to the object and purport which the same seeks to achieve. It is also well-settled that an expression used in a statute should be given its ordinary meaning unless it leads to an anomalous or absurd situation. (Paras 10 and 11)

       There cannot furthermore be any doubt whatsoever that when a person is held to be eligible to obtain the benefits of an exemption notification, the same should be liberally construed. (Para 16)

       By reason of the notification dated 27.11.1997, the only amendment made was the words “Tuticorn and Vishakhapatnam” were substituted by the words “Tuticorin, Vishakhapatnam and Kakinada”, which are `seaports’ and the words “Ludhiana and Hyderabad” were substituted by the words “Ludhiana, Hyderabad, Nagpur, Agra, Faridabad, Jaipur, Guntur and Varanasi” which are `inland container depots’. It is not in dispute that ‘Guntur’ was one of the inland container depots. It is also not in dispute that such duty exemption had all along been granted for export from ‘Guntur’. In terms of the policy decision, the tobacco exporters had filed blue shipping bills which having not been accepted and they had no option but to file normal white shipping bills, as tobacco was a perishable item. Had the intention of the Government of India been only to extend the said benefit only to the exporters from any other seaport, airport or inland container depot, recourse to the proviso appended to sub-clause (iv) of clause (2) of the notification dated 7.4.1997 could have been taken. But by reason of the notification dated 27.11.1997, one ‘sea port’ and ‘six inland container depots’ have been added. The last two words in the category of seaport, namely, “Tuticorin and Vishakha­patnam” had been substituted by the words “Tuticorin, Vishakha­patnam and Kakinada. Similarly the last two words, namely, Ludhiana and Hyderabad” in the category of inland container depot had been substituted by the words “Ludhiana, Hyderabad, Nagpur, Agra, Faridabad, Jaipur, Guntur and Varanasi. It, therefore, cannot be said to be a case where some other seaports or inland container depots have been added for the purpose of extension of the benefit but the newly added seaports or inland container depots had been made a part of the original notification. The Union of India while making a subordinate legislation had advisedly used the word “substitution” in place of the word “addition”. The object and purport of the subsequent notification issued by the Union of India was, thus, to grant the same benefit which had been granted to the exporters who were registered at the other seaports, airports or inland container depots as specified in the notification dated 7.4.1997 but also to those exporters, who had been exporting from such seaports or inland depots as specified in the amended notification dated 27.11.1997. If the Central Government intended to extend the benefit to the members of the Respondent-Association only with prospective effect, it could have said so explicitly. Such a benefit could also have been extended by taking recourse to the proviso appended to sub-clause (iv) of clause (2) of the notification dated 7.4.1997. It may, therefore, be safely concluded that by reason of the amended notification, the Central Government only intended to rectify a mistake and, thus, the same will have retrospective effect and retroactive operation. (Paras 19 and 22)

       The doctrine of fairness also is now considered to be a relevant factor for construing a statute. In a case of this nature where the effect of a beneficent statute was sought to be extended keeping in view the fact that the benefit was already availed of by the agriculturalists of tobacco in Guntur, it would be highly unfair if the benefit granted to them is taken away, although the same was meant to be extended to them also. For such purposes the statute need not be given retrospective effect by express words but the intent and object of the legislature in relation thereto can be culled out from the background facts. (Para 27)