(Dinesh Maheshwari and Vikram Nath, JJ.)
Petition(s) for Special Leave to Appeal (C) No(s). 31730/2016, decided on September 27, 2021
State of Haryana and Another _______________________ Petitioner(s);
v.
Daronacharya College of Engineering Managed by Smt. Anguri Devi Charitable Trust (Regd) __________________________ Respondent(s).
(IA No. 1/2016 – Condonation of Delay in Filing)
Petition(s) for Special Leave to Appeal (C) No(s). 31730/2016; CWP No. 6087/2005; and IA No. 1/2016
The Order of the court was delivered by
Order
1. 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 : (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 order and subject to specific conditions, if any, exempt any person or class of persons from the operation of all or any of the provisions of this Act, if in its opinion, such exemption would promote national or public interest.”
7. The exemption in the present case was provided under a Memo dated 22.09.1970, which was extracted by the High Court in the impugned order and we reproduce the same for ready reference as under:—
“Subject: Exemption of Stage Carriages (Buses) owned and operated by Educational Institutions in carrying School children from the levy of Passengers Tax under Section 10 of the Punjab Passengers and Goods Taxation Act, 1952.
Reference: Your memo No. 3105/a-iv, dated the 20th July, 1970.
In exercise of the powers conferred by Section 10 of the Punjab Passengers and Goods Taxation Act, 1952, the Governor of Haryana hereby exempts the educational institutions from the payment of Passengers Tax under the Act, ibid, in respect of Stage Carriage(buses) owned by them and used for the transportation of children to and from such institutions.
2. This memo issue with the concurrence of the Finance Department’s U.O. No. 3399-2FG-(1)-70/, dated the 10th September, 1970.”
8. The submission on the part of the petitioners had essentially been that in the said notification, exemption was granted to the educational institutions in carrying “school children” from the levy of passengers tax; and, therefore, extending this exemption to any other institution, not transporting children of the schools, was impermissible. This submission has been found unworthy of credence and the High Court has rejected the same while observing, inter alia, as under:—
“….The educational institutions have been exempted from payment of passenger tax in respect of stage carriage buses owned by them which have been used for transportation of children to and from such institutions. Once the Government itself has taken a decision as such, the Authorities below are not justified in trying to deny the benefit of exemption which was granted in public interest to the educational institutions under Section 10 of the Act and thus would frustrate the purpose of the exemption granted. Merely because in the heading, the word schoolchildren had been written, would not mean that the exemption was only granted to the children of schools and not to other educational institutions. If the State wanted to make a distinction as such, it would have specified that the institutions imparting education upto certain level i.e. primary or secondary were entitled for the benefit. The distinction, thus, sought to be made out is not justified and a liberal interpretation is to be given once exemption has been granted to the educational institutions.”
9. Even when nothing is to be intended and only plain language of the notification is to be examined, with reference to the powers under which, and the purpose for which, it has been issued, it is more than evident that the use of expression “school children” in the subject-caption of the said Memo can never be taken as decisive of the matter. Noticeably, in the body of the said Memo, the exemption was extended to the educational institutions from payment of passengers tax in respect of the stage carriage (buses) owned by them and “used for the transportation of children to and from such institutions”. It does not require any stretch of rules of interpretation to find that the expression “children” used in the body of the said Memo directly refers to the students taking instructions in educational institutions; and there is no reason or logic to restrict the operation of this exemption notification only for the purpose of the vehicles used for transportation of the children going to schools and not to apply the same in respect of the vehicles used for transportation of the students going to other educational institutions, like colleges and universities. The exemption has, in fact, been granted only in respect of stage carriage(buses), which were being used for transportation of students to and from such institutions and not indiscriminately to all the vehicles used for the purpose of any such institution.
10. It has not been the case of the petitioners that exemption was being claimed in relation to any vehicle used for any other purpose except transporting students to and from the educational institution. It gets perforce reiterated that the broad expression “children”, obviously, refers to the students taking instructions in educational institutions, irrespective of their class or standard or level.
11. Hence, we find no reason to consider interference in the view taken by the High Court.
12. Consequently, this special leave petition stands dismissed.
13. All the pending applications stand disposed of.
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