The judgment emphasizes the need for a strict construction of exemption provisions and the interpretation of the plain language of the notification, highlighting that exemptions should be construed in favor of the assessee and that the benefit of doubt or ambiguity must go to the State.

ORDER :

Delay condoned.

2. The petitioners-State of Haryana and its Assistant Excise and Taxation Officer seek leave to appeal against the judgment and order dated 10.04.2015 in CWP No. 6087 of 2005 whereby the High Court of Punjab and Haryana at Chandigarh accepted the writ petition filed by the present respondents and quashed the Show Cause Notice proposing to deny the benefit of exemption from payment of passengers tax in terms of Memo dated 22.09.1970 issued under Section 10 of the Punjab Passengers and Goods Taxation Act, 1952 (as applicable to the State of Haryana).

3. Ms. Nidhi Gupta, learned Additional Advocate General appearing for the State of Haryana has, with all emphasis, argued that the High Court has been in error in passing the impugned order dated 10.04.2015, while looking at the purported intendment of the exemption notification. The learned counsel would contend that the approach of the High Court is not in conformity with the requirement of law as regards taxing statutes and further as regards the exemption notification or clauses. Learned counsel has referred to the following enunciation in Hansraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise & Customs, Surat and two Ors: (1969) 2 SCR 253 (at p. 259):-

“....It is well-established that in a taxing statute there is no room for any intendment but regard must be had to the clear meaning of the words. The entire matter is governed wholly by the language of the notification. If the tax-prayer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. If such intention can be gathered from the construction of the words of the notification or by necessary implication therefrom, the matter is different, but that is not the case here.”

4. Learned counsel has further relied upon the following passage in decision of this Court in the case of Novopan India Ltd., Hyderabad v. Collector of Central Excise and Customs, Hyderabad: (1994) Supp. (3) SCC 606 (at p. 614):-

“16.....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 explained in Mangalore Chemicals: (1992) Supp (1) SCC 21 and other decisions, 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. As observed by a Constitution Bench of this Court in Hansraj Gordhandas v. H.H. Dave: (1969) 2 SCR 253 that such a notification has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the exemption.”

5. While the principles aforesaid are neither of any doubt nor of any dispute, in our view, the same do not advance the case of petitioners in this matter. This is for the simple reason that the construction of the exemption notification by the High Court has been only on its plain language and, of course, while taking note of the purpose for which it was issued.

6. The provision empowering the State to grant exemption, occurring in Section 10 of Punjab Passengers and Goods Taxation Act, 1952 (as applicable to the State of Haryana) reads as under:-

“10. Exemptions. The State Government may, by general or special o