2022 Supreme(SC) 16

SUPREME COURT OF INDIA
(From the High Court of Judicature at Bombay)
M.R. SHAH, SANJIV KHANNA, JJ.
The State of Maharashtra - Appellant
Versus
Shri Vile Parle Kelvani Mandal & Ors. - Respondents
Civil Appeal No. 7319 of 2021
Decided On : 07-01-2022

IMPORTANT POINTS
(1) Charitable education institutions registered under provisions of Societies Registration Act and/or under Maharashtra Public Trusts Act, are not entitled to any exemption from levy/payment of electricity duty on or after date on which Maharashtra Electricity Duty Act, 2016 came into effect.
(2) In every taxing statute charging, computation and exemption provisions at threshold stage should be interpreted strictly – In case of ambiguity in case of charging provision, benefit necessarily must go into favour of subject/assessee.
(3) Strict interpretation to exemption provision is to be accorded.

Headnote:

(A) Maharashtra Electricity Duty Act, 2016 – Section 3(2)(iii) – Exemption from payment of electricity duty – Under Section 3(2) of 2016 Act, charitable institutions running educational institutions are not exempted from payment of electricity duty, which as such was specifically exempted under Section 3(2)(iii) of 1958 Act – Charitable education institutions registered under provisions of Societies Registration Act and/or under Maharashtra Public Trusts Act, are not entitled to any exemption from levy/payment of electricity duty on or after 08.08.2016 i.e. from the date on which Maharashtra Electricity Duty Act, 2016 came into effect – High Court has committed grave error in setting aside levy of electricity duty on original writ petitioners – respondents No.1 to 10 herein – Impugned judgment and order passed by High Court is unsustainable both, on law and on facts – Impugned judgment and order passed by High Court quashed and set aside. (Paras 11.4, 14 and 15)

(B) Interpretation of Statute – Taxing Statute – In every taxing statute charging, computation and exemption provisions at threshold stage should be interpreted strictly – In case of ambiguity in case of charging provision, benefit necessarily must go into favour of subject/assessee – Subject of tax, person liable to pay tax and rate at which tax is to be levied have to be interpreted and construed strictly – If there is any ambiguity in any of these three components, no tax can be levied till ambiguity or defect was removed by legislature – However, in case of exemption notification or clause, same is to be allowed based wholly by language of notification, and exemption cannot be gathered by necessary implication, or on a construction different from words used by reference to object and purpose of granting exemption – It’s for assessee to show by construction of exemption clause/notification that it comes within purview of exemption – Assessee/citizen cannot rely on ambiguity or doubt to claim benefit of exemption – Rationale is not to widen ambit at stage of applicability – However, once hurdle is crossed, notification is constructed liberally – Distinction can be made between substantive requirements that require strict compliance –Non-compliance of which would render assessee ineligible to claim exemption and procedural or compliance provision which can be interpreted liberally. (Para 9.1)

(C) Interpretation of Statute – Exemption Notification – In context of exemption notification there is no new room for intendment – Regard must be to clear meaning of words – Claim to exemption is governed wholly by language of notification – An assessee cannot claim benefit of exemption, on principle that in case of ambiguity a taxing statue must be construed in his favour, for an exception or exemption provision must be construed strictly – In taxing statute, it is plain language of provision that has to be preferred where language is plain and is capable of one definite meaning – Strict interpretation to exemption provision is to be accorded – Purposive interpretation can be given only when there is some ambiguity in language of statutory provision or it leads to absurd results. (Paras 9.3, 9.4 and 9.5)

Facts of the case:

Feeling aggrieved and dissatisfied with the impugned judgment and order dated 28.02.2019 passed by the High Court of Judicature at Bombay in Writ Petition No.2961 of 2018, by which the High Court has allowed the said writ petition preferred by respondents No.1 to 10 herein original writ petitioners (hereinafter referred to as original writ petitioners (education institutions) and held that original writ petitioners are exempted from payment of electricity duty, the State of Maharashtra has preferred present appeal.

Findings of Court:

Original writ petitioners – respondents No.1 to 10 herein – charitable education institutions registered under the Societies Registration Act and the Maharashtra Public Trusts Act, are not exempt from levy/payment of electricity duty levied on the consumption charges or the energy consumed even with respect to the properties used by such charitable education institutions for the purpose of or in respect of the school/college imparting education or training in academic or technical subjects.

Result : Appeal allowed.