Rao Vs. Govt. of A.P. & Anr  Insc 866 (24 November 2006)
Sinha & Markandey Katju
out of SLP (C) No. 9607 of 2005) S.B. SINHA, J.
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:
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
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:
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." 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:
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" 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.
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 :
case of a doubt as regards construction of a taxing statute it should be
construed in favour of the taxpayer and not the Revenue.
assuming that there was some casus omissus, the same could not have been supplied.
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
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
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.
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]
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
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
Cape Brandy Syndicate v. Inland Revenue Commissioner [(1921) 1 K.B. 64], Rowlatt,
a taxing Act one has to look merely at what is clearly said. There is no room
for any intendment.
is no equity about a tax. There is no presumption as to a tax. Nothing is to be
read in, nothing is to be implied. One can only look fairly at the language
used." In V.V.S. Sugars v. Govt. of A.P. and Others [(1999) 4 SCC 192],
this Court held:
The said Act is a taxing statute and a taxing statute must be interpreted as it
reads, with no additions and no subtractions, on the ground of legislative
intendment or otherwise." 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
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
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.
3 of the Act has to be read in the light of a proviso. It must be given its
Saigal v. Commissioner of Income Tax, Punjab [(1963) 3 SCR 893], the question which fell for consideration before
this Court was construction of the machinery provisions vis-`-vis the charging
appended to the Motor Vehicles Act is not machinery provision. It is a part of
the charging provision.
giving a plain meaning to the Schedule appended to the Act, the machinery
provision does not become unworkable. It did not prevent the clear intention of
the legislature from being defeated. It can be given an appropriate meaning.
case of doubt or dispute, it is well-settled, construction has to be made in favour
of the taxpayer and against the Revenue. [See Sneh Enterprises v. Commissioner
of Customs, New Delhi, (2006) 7 SCC 714] In M/s. Ispat
Industries Ltd. v. Commissioner of Customs, Mumbai [JT 2006 (12) SC 379 : 2006
(9) SCALE 652], this Court opined:
our opinion if there are two possible interpretations of a rule, one which subserves
the object of a provision in the parent statute and the other which does not,
we have to adopt the former, because adopting the latter will make the rule
ultra vires the Act." It is furthermore well-known that casus omissus
cannot be supplied.
Lanka v. Rishi Dixit [(2005) 5 SCC 598], this Court opined:
The question as to whether it can be given effect to or not is, thus, required
to be judged on its own without reference to the circular issued by the
Commissioner of Excise. Casus omissus, it is well known, cannot be supplied by
the court. (See P.T. Rajan v. T.P.M. Sahir)" Gray in 'The Nature and
Sources of the Law' (2nd ed. 1921 pp 172- 73) observed thus:
is generally spoken of as if its chief function was to discover what the
meaning of the Legislature really was. But when a Legislature has had a real
intention, one way or another, on a point, it is not once in a hundred times
that any doubt arises as to what its intention was ... The fact is that the
difficulties of so-called interpretation arise when the Legislature has had no
meaning at all; when the question which is raised on the statute never occurred
to it ... (In such cases) when the judges are professing to declare what the
Legislature meant, they are in truth, themselves legislating to fill up casus omissi."
Reliance placed by Mr. Sundarvardhan on Champa Kumari Singhi and others v. The
Member Board of Revenue, West Bengal and
Others [AIR 1970 SC 1108 : (1970) 1 SCC 404] is misplaced. In that case, this
Court was considering a voluntary disclosure scheme vis-`-vis the time limit
specified therefor. The applicant made certain defaults in payment of instalments.
Having regard to the purport of the scheme, it was stated:
language of clause (iv) of the proviso was unfortunate in expressing this
intent and has now been corrected in the new Act but the intention was always
obvious. Even in the second agreement which replaced the first agreement the
same condition obtained. There was a concession shown in the matter of penalty
and smaller instalments were fixed. But the Central Board of Revenue had
stipulated even then that the concession mentioned above would only be
available if the revised scheme of payment was strictly followed. In other
words, payment was to be made by instalments and this concession therefore
attracted the provisions of clause (iv).
Government could always accept any instalment even if paid late without having
to worry about the period of limitation of one year from the date of demand,
since clause (iv) of the first proviso gave them an option to wait till the
last instalment was payable. The scheme of the instalments took the matter out
of the main part of sub-section (7) and brought it within the proviso to clause
(iv)" Clause (iv) of the proviso appended to Sub-section (7) of Section 46
of the Income Tax Act, 1922 came up for consideration therein which reads as
in accordance with the provisions of sub- section (1) of Section 42 or to the
proviso to Section 45, no proceedings for the recovery of any sum payable under
this Act shall be commenced after the expiration of one year from the last day
of the financial year in which any demand is made under this Act:
that the period of one year herein referred to shall * * * (iv) where the sum
payable is allowed to be paid by intalments, from the date on which the last of
such instalments was due." Whereas the contention of the appellants
therein was that they could have been treated as defaulters in terms of
Sub-section (1) of Section 46 only, the Revenue contended that the matter was
covered by Clause (iv) of the proviso to Sub-section (7) of Section 46 which
allows limitation of one year to be calculated from the date on which the last instalment
was due in that case.
we are not concerned with such a provision as the Schedule can be given effect
to in the light of the charging provisions contained in Section 3 of the Act.
has also been placed upon a decision of this Court in Commissioner of Income
Tax, Central Calcutta v. National Taj Traders [(1980) 1 SCC 370] wherein this
Court opined that the rule of literal construction can be departed from when it
would lead to manifestly absurd result not intended by legislature.
cannot be any dispute with regard to the aforementioned proposition of law.
we may notice that therein only Tulzapurkar, J. stated the law thus:
other words, under the first principle a casus omissus cannot be supplied by
the Court except in the case of clear necessity and when reason for it is found
in the four corners of the statute itself but at the same time a casus omissus
should not be readily inferred and for that purpose all the parts of a statute
or section must be construed together and every clause of a section should be
construed with reference to the context and other clauses thereof so that the
construction to be put on a particular provision makes a consistent enactment
of the whole statute. This would be more so if literal construction of a
particular clause leads to manifestly absurd or anomalous results which could
not have been intended by the Legislature" 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.
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.
Motor Transport (supra), Clause (g) of Entry IV of the First Schedule of the
M.P. Motor Vehicles Taxation Act was struck down inter alia on the ground that
the same was contrary to the charging provisions.
the reasons aforementioned, the impugned judgment cannot be sustained which is
set aside accordingly. The appeal is allowed. No costs.