IMPORTANT POINT
In construing a taxing statute, Court shall make an endeavour to give effect to the golden rule of interpretation i.e. principle of literal interpretation and would not supply casus omissus.

Headnote:Andhra Pradesh Motor Vehicles Taxation Act, 1963 - Section 3 - Levy of tax on motor vehicles - Rate of tax for Maxi Cab permitted to carry more than six passengers but not more than twelve passengers as per schedule in the Act was prescribed at Rs. 1000/ - Notification modifying rate of tax at Rs. 600/- per seat for contract carriage with seating capacity of 8 in all to 13 in all covered by intra-State or inter-State - Writ challenging notification High Court dismissed writ holding that harmonious reading of provisions would lead to conclusion that rate of tax prescribed in Schedule of the Act was valid in law - Appeal - Statute involving compensatory tax in a given case must be construed having regard to purport and object - However for Maxi Cab rate of tax was differently provided for in statute itself - Proviso to Section 3 of the Act provided for limitation of power of State to enhance the rate of tax - Once rate of tax was fixed, any notification enhancing rate thereof could not be permitted - Casus omissus could not be supplied - Notification as it sought to change the basis of mode of Taxation was illegal and could not be sustained - Impugned judgment was liable to be set aside.
       Held : The Act enacted by the State provides for a compensatory nature of tax. A statute involving compensatory tax in a given case must be construed having regard to the purport and object for which it was levied. [See Hardev Motor Transport v. State of M.P. & Ors., JT 2006(9) SC 454] (Para 9)
       Section 3 of the Act provides for a charging section stating that the tax shall be levied on every motor vehicle used or kept for use in the State at the rates specified in the First Schedule. The levy of tax, therefore, is on the motor vehicles. Its rates may vary having regard to the use or category of the vehicle.(Para 10)
       Maxi Cabs although come within the purview of the definition of "contract carriage", but the rate of tax therefor has differently been provided for in the statute itself. Proviso appended to Section 3 of the Act provides for a statutory injunction limiting the power of the State to enhance the rate of tax.(Para 11)
       When the rate of tax is provided under a statute, construction thereof applying the principles of noscitur a sociis and ejusdem generis would not apply. The rate of tax was fixed at Rs. 1,000/-. That was a tax on the specified motor vehicle. The tax was not to be calculated on passenger basis. It may be that the provisions preceding thereto impose a tax on passenger. But, they were in relation to motor vehicles which are used for different purposes.(Para 14)
       A Maxi Cab although would come within the purview of "contract carriage" but it cannot carry more than twelve passengers. It is a class within the class of "contract carriage".(Para 15)
       Once the rate of tax is fixed and the same had been realized, any notification enhancing the rate thereof cannot be permitted to transgress the statutory limits provided for in the proviso appended to Section 3 of the Act. Section 3 of the Act has to be read in the light of a proviso. It must be given its proper meaning. (Para 16)
       Given this plain meaning to the provisions referred to hereinbefore, in our opinion, the rate of tax could not be increased in derogation to the proviso appended to Section 3 of the Act. The notification in our opinion as it seeks to change the basis of the mode of taxation is illegal and, thus, cannot be sustained.(Para 31)
       It is not a case where language is obscure which would give rise to two different meanings; one leading to the workability of the Act and another to absurdity. In such a case, a presumption as regard constitutionality of statute may be raised. It is well settled that construing a taxing statute, the court shall make an endeavour to give effect to the golden rule of interpretation, i.e., principle of literal interpretation and would not supply casus omissus.(Para 32)
       (ii) Interpretation of Statute - Taxation statute - Construction has to be made in favour of tax payer and against the Revenue - Casus omissus can not be supplied.(Paras 19 to 21)

JUDGMENT

S.B. Sinha, J. - Leave granted.

2. The State of Andhra Pradesh enacted the Andhra Pradesh Motor Vehicles Taxation Act, 1963 (for short "the Act") to consolidate and amend the law relating to levy of a tax on motor vehicles in the State of Andhra Pradesh. Section 3 of the Act reads as under:

"3(1) The Government may, by notification from time to time, direct that a tax shall be levied on every motor vehicle used or kept for use in a public place in the State.

(2) The notification issued under sub-section (1) shall specify the class of motor vehicles on which, the rates for the periods at which, and the date from which, the tax shall be levied:

Provided that the rates of tax shall not exceed the maximum specified in column (2) of the First Schedule in respect of the classes of motor vehicles fitted with pneumatic tyres specified in the corresponding entry in column (1) thereof; and one a half times the said maximum in respect of such classes of motor vehicles as are fitted with non-pneumatic tyres."

3. In the Schedule appended to the Act, the rate of tax for Maxi Cab permitted to carry more than six passengers but not more than twelve passengers was prescribed at Rs. 1,000/-. By reason of an amendment as contained in the notification dated 27.04.1997, the rate of tax was modified as under:

"(E) Contract carriages with a seating capacity of 8 in all to 13 in all covered by intra-State or Inter-State permit for every passenger other than the driver the vehicle is permitted

to carry.Rs. 600/- per seat"

4. Questioning the purported notification dated 27.04.1993, a writ petition was filed by the appellant herein which by reason of the impugned judgment was dismissed by the High Court opining that having regard to the fact that in all other entries of the Schedule tax was levied on seat basis, harmonious reading of the provisions thereof would lead to the conclusion that rate of tax prescribed in the Schedule of Act is valid in law.

5. Mr. K. Radha Krishnan, learned senior counsel appearing on behalf of the appellant, would submit that the High Court committed a manifest error in passing the impugned order insofar as it failed to take into consideration that :

(i)in case of a doubt as regards construction of a taxing statute it should be construed in favour of the taxpayer and not the Revenue.

(ii)even assuming that there was some casus omissus, the same could not have been supplied.

6. Mr. R. Sundaravardhan, learned senior counsel appearing on behalf of the respondents, on the other hand, would submit that in construction of a taxing statute, addition of any word is not impermissible and rule of strict construction applies only to the charging section of the Act and not to the machinery provisions.

7. Drawing our attention to the fact that Maxi Cabs come within the purview of the "contract carriage", the learned counsel would contend that the provisions must be construed having regard to the charging provision contained in Section 3 of the Act as also the rate of tax imposed on "contract carriage".

8. It was submitted that casus omissus can also be supplied in a case where there is a clear necessity or where construction of a statute leads to an absurdity or would run contrary to the plain intention of the legislature.

9. The Act enacted by the State provides for a compensatory nature of tax. A statute involving compensatory tax in a given case must be construed having regard to the purport and object for which it was levied. [See Hardev Motor Transport v. State of M.P. & Ors., JT 2006(9) SC 454]

10. Section 3 of the Act provides for a charging section stating that the tax shall be levied on every motor vehicle used or kept for use in the State at the rates specified in the First Schedule. The levy of tax, therefore, is on the motor vehicles. Its rates may vary having regard to the use or category of the vehicle.

11. Maxi Cabs although come within the purview of the definition of "contract carriage", but the rate of tax theref

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2006 Supreme(SC) 1182

IMPORTANT POINTIn construing a taxing statute, Court shall make an endeavour to give effect to the golden rule of interpretation i.e. principle of literal interpretation and would not supply casus omissus.

Cases Referred (7)

IMPORTANT POINT
In construing a taxing statute, Court shall make an endeavour to give effect to the golden rule of interpretation i.e. principle of literal interpretation and would not supply casus omissus.