Page 38 - ELT_15th June 2020_VOL 372_Part 6th

A192 EXCISE LAW TIMES [ Vol. 372

the purview of the exemption clause or exemption notification
would be on the assessee. But, where the exemption notification ex
facie applies, then, onus that parameters as set out in the notification
have not been met by the assessee will shift on concerned Revenue
Authority [Commissioner of Customs v. Reliance Petrochemical Ltd.,
(2008) 7 SCC 220, Commissioner of Customs v. Tullow India Operations
Ltd., (2005) 13 SCC 789].
(v) As a logical corollary to the principle that exemption notifications
are to be interpreted strictly, it is trite in law that unless an item is
specifically and explicitly included in exemption notification, an as-
sessee cannot avail the benefits under such notification [CC, Bombay
v. Perfect Machine Tools Co. Pvt. Ltd., 1997 (96) E.L.T. 214 (S.C.)].
However, it must always be remembered that if this interpretation
of the such notification makes the notification purposeless, unwork-
able, and nugatory, then in such a case, such interpretation must be
avoided and notification has to be interpreted to give true import
and meaning [Collector of Customs v. United Electrical Industries Ltd.,
1999 (108) E.L.T. 609 (S.C.)]. This view gets further substantiated by
the following pertinent observation made by Hon’ble Supreme
Court in :
(a) Bajaj Tempo Ltd. v. CIT [[1992] 196 ITR 188 (SC)]
“a provision intended for promoting growth has to be
interpreted liberally so as to advance the objectives of
the section and not to frustrate it.”
(b) CIT v. Strawboard Manufacturing Co. Ltd. [[1989] 177 ITR 431
(SC)]
“while dealing with a provision made in the context of
law providing for concessional rates of tax for the pur-
pose of encouraging industrial activity, a liberal con-
struction should be put upon the statute.”
Thus, in order to achieve the objective of encouraging the trade,
when provisions of tax statute can be interpreted contextually and
liberally, then, there is no reason as to why this logic will not hold
the water in cases where interpretation of tax exemption notifica-
tions and circulars are involved. Moreover, it will be interesting to
note that Hon’ble Supreme Court in the case of K.P. Varghese v.
ITO, [[1981] 131 ITR 597], had held that strict rule of interpretation
must yield to the rules of purposive interpretation or the rules of
contextual interpretation.
(vi) Tax cannot be confiscatory in its nature [Kunnathat Thathunni Moopil
Nair v. The State of Kerala and Ors. - AIR 1961 SC 552] Parent Act
which vests power in the Executive to exempt class of persons from
the exigibility of tax must also set out principle or policy for the
guidance of exercise of discretionary power [Shri Ram Krishna
Dalmia v. Shri Justice S.R. Tendolkar and Others [1959] 1 SCR 279].
(vii) Notifications granting exemptions from duty/tax are not mere
executive instruction rather delegated legislations which sub-serve
social objectives [Union of India v. Jalyan Udyog, 1993 (68) E.L.T. 9
(S.C.)].
EXCISE LAW TIMES  15th June 2020  38