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Saturday, February 22, 2014

Rajasthan Sales Tax Act - Exemption from paying tax on new cement units - the assesse claimed 75% exemption - where the the committee declared that he was entitled to only 25% exemption as it is a large scale unit as per Item 1E of Annexure ‘C’- Tax Board held that the assesse entitled for 75% exemption and remanded the matter - revenue filed revision to high court and high court dismissed the same - Apex court held when there is specific provisions was there , general provision is not applicable - Item 1E of Annexure - C clearly holds large scale units are entitled to 25% exemption only - Apex court set aside the order of high court and that off Tax board =COMMERCIAL TAX OFFICER, | | |RAJASTHAN |..Appellant(s) | Versus |M/S. BINANI CEMENTS LTD. & ANR. |..Respondent(s) = 2014(Feb.Part) judis.nic.in/supremecourt/filename=41236

Rajasthan Sales Tax Act - Exemption from paying tax on new cement units - the assesse claimed 75% exemption - where the the committee declared that he was entitled to only 25% exemption as it is a large scale unit as per Item 1E of Annexure ‘C’- Tax Board held that the assesse entitled for 75% exemption and remanded the matter - revenue filed revision to high court and high court dismissed the same - Apex court held when there is specific provisions was there , general provision is not applicable - Item 1E of Annexure - C clearly holds large scale units are entitled to 25% exemption only - Apex court set aside the order of high court and that off Tax board =

The Scheme for exemption from payment of sales
   tax was notified by the State of Rajasthan  in  exercise  of  its  powers
   under sub-section(2) of Section 4 of the Rajasthan Sales  Tax  Act,  1954
   (for short, “the Act”). 
The scheme exempts certain industrial units  from
   payment of tax on the sale of  goods  manufactured  by  them  within  the
   State. 
It specifies and categorizes the districts, types  of  units,  the
   extent of exemption from  tax  (in  percentage),  the  maximum  exemption
   available in terms of percentage of fixed capital  investment  (FCI)  and
   the  maximum  time  limit  for  availing  such  exemption  from  tax.  

The respondent-assessee is a new industrial  unit  manufacturing  cement
   situated within Panchayat Samiti, Pindwara, Rajasthan. It is an  admitted
   fact that it started its commercial production on 27.05.1997. 
It is  also
   not disputed that the respondent-assessee has  fixed  capital  investment
   (for short, “the FCI”) exceeding Rs.500/- Crores and  employs  more  than
   250 employees.

After   the   introduction   of
   notification dated 13.12.1996, the exclusion is made  to  the  expression
   ‘New Units’ by specifically including certain type of industrial units by
   inserting items 1A to 1F. 
Item 1E specifically talks of New Cement  Units
   except in Tribal Sub-Plan area. 
The extent  of  percentage  of  exemption
   from tax under Item 1E depends on the type of unit or the industry. If it
   is a small scale unit, the extent of exemption is 75%, if  it  is  medium
   scale, the extent of exemption is 50%, and if it is large scale unit, the
   extent of percentage of exemption from tax is 25%. The maximum time limit
   for availing exemption from tax is restricted  to  seven  years.  Item  4
   speaks of New Units producing pollution  control  equipments,  pioneering
   units and prestigious units.  
The extent of the percentage  of  exemption
   from tax is 75% of  total  liability  and  the  maximum  time  limit  for
   availing exemption from tax is  9  years  from  the  date  of  commercial
   production.  
Item 5 relates to New  Very  Prestigious  Units  other  than
   cement units except in Tribal Sub-plan Area and the total  percentage  of
   exemption from tax is 90% of total tax liability  and  the  maximum  time
   limit for availing exemption from tax is eleven years.
1E.   |New Cement units |75%, 50% & 25%  |125% of FCI in|Seven years.  |
|      |except in Tribal |of total tax    |case of small |              |
|      |Sub-Plan area.   |liability in    |scale units   |              |
|      |                 |case of small,  |subject to an |              |
|      |                 |medium and large|overall limit |              |
|      |                 |scale units     |of Rs.1.00    |              |
|      |                 |respectively    |crore and 100%|              |
|      |                 |                |of FCI in case|              |
|      |                 |                |of medium and |              |
|      |                 |                |large scale   |              |
|      |                 |                |units.        |              |

Reverting to state the facts, the respondent-assessee  had  applied  to
   the State Level Screening Committee for claiming benefit of exemption  at
   75% under the Scheme. 
The Committee rejected the claim of the respondent-
   assessee and observed that since the respondent-assessee is a large scale
   unit covered under the specific provision of Item 1E of Annexure ‘C’,  it
   is entitled to 25% exemption, by its order dated 15.01.1998.


18. Being aggrieved by the said order, the respondent-assessee filed appeal
   before Rajasthan Tax Board, Ajmer (for short, ‘the Board’) in respect  of
   the calculation of eligible FCI  as  well  as  the  exemption  under  the
   Scheme. The Board while remanding the matter to the State Level Screening
   Committee held that  the  respondent-assessee  is  entitled  to  75%  tax
   exemption by holding the respondent-unit as Prestigious  Unit  under  the
   Scheme.


19. The revenue being aggrieved by the decision of  the  Board,  filed  Tax
   Revision Petition before the High Court under Section 86(2) of  the  Act.
   The High Court dismissed the revision petition filed by the  revenue  and
   upheld the decision of the Board by holding that the respondent-unit is a
   Prestigious Unit and therefore, entitled to 75% tax exemption  under  the
   Scheme.=
In the  instant  case,  the  item  1E  is  subject  specific  provision
   introduced by an amendment in 1996 to  the  Scheme.  
The  said  amendment
   removed “new cement industries”  from  the  non-eligible  Annexure-B  and
   placed it into Annexure-C amongst the eligible industries. 
It  classified
   the cement units for eligibility of tax exemption into three  categories:
   small, medium and large. 
The said categories  are  comprehensive  whereby
   small and medium cement units have been prescribed to have  maximum  FCIs
   of Rs.60/- lakhs and Rs.5/- crores, respectively and large to be over the
   FCI of Rs.5/- crores. 
The maximum ceiling for large cement units has been
   purposefully left open and thereby reflects that the intention clearly is
   to provide for an all-inclusive provision for new cement units so  as  to
   avoid  any  ambiguity  in  determination  of  appropriate  provision  for
   applicability to new cement units to seek exemption.




44.  It  leaves  no  doubt  that  what  is  specific  has  to  be  seen  in
   contradistinction  with  the  other  items/entries.  
The  provision  more
   specific than the other on the same subject would  prevail.  Here  it  is
   subject specific item and therefore as against items 1, 4, 6 and 7, which
   deal with units of all industries and not only cement, item 1E restricted
   to only cement units would be a specific and special entry and thus would
   override the general provision.


45.  The  proposition  put  forth  by  the  respondent-Company   that   the
   construction which is most beneficial to the assessee must be applied and
   adopted fails to impress upon us its application in this case. 
Howsoever,
   it is true that the canons of construction must  be  applied  to  extract
   most beneficial re-conciliation of provisions. In case of fiscal  statute
   dealing with exemption, it would require  interpretation  benefiting  the
   assessee. 
But here the introduction of the subject  specific  entry  vide
   amendment into general scheme of exemption speaks volumes in  respect  of
   intention of the legislature to restrict the benefit to cement industries
   as available only under Item 1E, which categorically classified them into
   three as per their FCI. 
The specific  entries  being  mutually  exclusive
   have been placed so systematically arranged and classified in the Scheme.
   The construction of provisions must not be divorced from  the  object  of
   introduction  of  subject  specific  provision  while   retaining   other
   generalized provision  that  now  specifically  exclude  the  new  cement
   industries,  which  could  otherwise  fall  into  its  ambit,  lest  such
   interpretation would be not ab  absurdo  (i.e.,  interpretation  avoiding
   absurd results).

46. Therefore, in our considered view the respondent-Company would only  be
   eligible for grant of exemption under Item 1E as a large new cement  unit
   in accordance with its FCI being above Rs.5/- crores.  
In  light  of  the
   aforesaid, we are of the considered opinion that the judgment  and  order
   passed by the High Court ought to be set aside and  the  appeals  of  the
   Revenue requires to be allowed.


47. In the result, the appeal is allowed and the judgment and order  passed
   by the High Court is set aside. No order as to costs.

2014(Feb.Part) judis.nic.in/supremecourt/filename=41236

H.L. DATTU, S.A. BOBDE
                                                                 REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                         CIVIL APPEAL NO.336 OF 2003





|COMMERCIAL TAX OFFICER,                          |                           |
|RAJASTHAN                                        |..Appellant(s)             |



                          Versus

|M/S. BINANI CEMENTS LTD. & ANR.                  |..Respondent(s)            |





                               J U D G M E N T


H.L. DATTU, J.


1. The Revenue is in appeal before us against  the  impugned  judgment  and
   order passed by the High Court of Rajasthan at Jodhpur in S.B. Sales  Tax
   Revision Petition No.582 of 1999, dated 02.07.2001 whereby and whereunder
   the High Court has dismissed the revision petition filed by  the  Revenue
   and upheld the case of the respondent-assessee.
2. The respondent-assessee is a new industrial  unit  manufacturing  cement
   situated within Panchayat Samiti, Pindwara, Rajasthan. It is an  admitted
   fact that it started its commercial production on 27.05.1997. 
It is  also
   not disputed that the respondent-assessee has  fixed  capital  investment
   (for short, “the FCI”) exceeding Rs.500/- Crores and  employs  more  than
   250 employees.




3. The core issue arises out of the respondent-assessee’s  application  for
   grant of eligibility certificate for exemption from  payment  of  Central
   Sales Tax and Rajasthan Sales Tax to the State Level Screening Committee,
   Jaipur under the “Sales Tax New Incentive Scheme  for  Industries,  1989”
   (for short “the Scheme”).


4. For convenience of discussion, we would first notice the relevant scheme
   and certain provisions and thereafter proceed  towards  analysis  of  the
   facts in the instant case.
The Scheme for exemption from payment of sales
   tax was notified by the State of Rajasthan  in  exercise  of  its  powers
   under sub-section(2) of Section 4 of the Rajasthan Sales  Tax  Act,  1954
   (for short, “the Act”). 
The scheme exempts certain industrial units  from
   payment of tax on the sale of  goods  manufactured  by  them  within  the
   State. 
It specifies and categorizes the districts, types  of  units,  the
   extent of exemption from  tax  (in  percentage),  the  maximum  exemption
   available in terms of percentage of fixed capital  investment  (FCI)  and
   the  maximum  time  limit  for  availing  such  exemption  from  tax.  
By
   introducing a deeming clause, the scheme is  deemed  to  have  come  into
   operation with effect  from  05.03.1987  and  to  remain  in  force  upto
   31.03.1992. 
An amendment to the aforesaid notification was brought in  by
   issuing  notification  –  S.  No.763:  F.4(35)  FD/  Gr.IV/87-38,   dated
   06.07.1989 and was made operative/effective with effect  from  05.03.1987
   and to remain  in  force  upto  31.03.1995.  
Yet  another  amendment  was
   introduced by  the  State  Government  by  issuing  notification  No.763:
   F.4(35)FD/Gr.IV/87-38 dated  06.07.1989.  Once  again  by  introducing  a
   deeming clause, the notification was  made  operative  with  effect  from
   05.03.1987 and to remain in force upto 31.03.1997. 
The  State  Government
   has  issued  another  subsequent  notification   amending   the   earlier
   notification in exercise of its power under Section 4(2) of  the  Act  in
   763: F.4(35)FD/Gr.IV/87-38, dated 06.07.1989 which is deemed to have come
   into operation with effect from 05.03.1987 and to remain  in  force  upto
   31.03.1998.  
Clause  1  of  the  scheme  notification  provides  for  its
   operation. 
Clause 2 is the dictionary clause which provides  for  meaning
   of the expressions like “New Industrial Unit”,  “Sick  Industrial  Unit”,
   “Eligible Fixed Capital Investment” etc.  For the purpose of  this  case,
   we require to notice the definitions of  New  Industrial  Unit,  Eligible
   Fixed Capital Investment, Prestigious Unit and Very Prestigious Unit.


5. Clause 2(a) defines the meaning of the expression ‘New Industrial  Unit’
   to mean an industrial unit which commences commercial  production  during
   the operative period of the scheme. The definition provides an  exclusion
   of certain industries from the purview of New Industrial Unit.  They  are
   industrial units established by transferring or shifting  or  dismantling
   an existing industry and an industrial unit established on the site of an
   existing unit manufacturing similar goods. Explanation I and II  appended
   to the notification need not be noticed by us,  since  the  same  is  not
   necessary for the purpose of disposal of this appeal.


6. It is neither in dispute nor could be disputed by the revenue  that  the
   respondent is not a ‘New Industrial Unit’.


7. Clause 2(e) defines eligible fixed  capital  investment  (FCI)  to  mean
   investment made in land, new  buildings,  new  plant  and  machinery  and
   imported second hand machinery from outside the country and  installation
   expenditure  capitalized  for  plant  and  machinery   and   installation
   capitalized  for  plant   and  machinery’s  capitalized  interest  during
   construction not exceeding 5% of the total fixed capital investment;  and
   technical know-how fees or drawing  fees  paid  in  lump-sum  to  foreign
   collaborators or foreign suppliers as approved by Government of India  or
   paid to laboratories  recognized  by  the  State  Government  or  Central
   Government and Rail Sidings, rolling stock, racks  and  railway  engines,
   owned by the unit.


8. Clause 2(i) defines ‘Prestigious Unit’.  The same is as under:-

                 “Prestigious Unit” means a  “new  industrial  unit”  first
           established in any Panchayat Samiti  of  the  State  during  the
           period of this Scheme  in  which  investment  in  fixed  capital
           exceeds Rs.10/- cores with a minimum permanent employment of 250
           persons or a  “new  industrial  unit”  having  a  fixed  capital
           investment  exceeding  Rs.25.00  crores  and  with   a   minimum
           permanent  employment  of  250  persons  or  a  new   electronic
           industrial unit having fixed capital investment exceeding Rs.25/-
            crores’.

9. The definition is in three parts.
The  first  part  speaks  of  a  ‘New
   Industrial Unit’ first established in any Panchayat Samiti of the  State.
   The establishment is of the unit during the period of  the  Scheme.  
The
   investment in fixed capital must exceed Rs.10/-  crores  and  lastly  the
   industrial unit has minimum permanent employment of 250 persons.
 In  the
   second limb, the necessity of establishing the ‘New Industrial  Unit’  in
   Panchayat Samiti is  done  away  with.  
The  unit  should  have  capital
   investment exceeding Rs.25/- crores and  should  have  minimum  permanent
   employment of 250 persons.
The third limb of this definition applies only
   to Electronic Industrial Unit having fixed capital  investment  exceeding
   Rs.25/- crores.
10. Clause 2(ii) defines the expression “Very Prestigious Unit” as under:
            “Very Prestigious Unit” means a new industrial unit  established
          in any Panchayat Samiti of the State during  the  period  of  this
          Scheme in which investment in fixed capital is Rs.100/- crores  or
          more.  However,  the  progressive  investment  of  the  amount  of
          project cost as appraised by the financial institutions  shall  be
          considered as investment made by a new unit, and as soon  as  such
          investment reaches or crosses the point of Rs.100/- crores  during
          the operative period of the Scheme, the  unit  shall  acquire  the
          status of a Very Prestigious Unit  for  the  purpose  of  claiming
          enhanced proportionate benefits under this Scheme”.


11. The ‘Very Prestigious Unit’ means a new industrial unit established  in
   any Panchayat Samiti in the State during  the  operative  period  of  the
   Scheme and the other important requirement  is  the  investment  in  such
   industrial unit must be Rs.100/- crores or more.  The second limb of  the
   definition clause provides for a  new  industrial  unit  to  acquire  the
   status of Very Prestigious Unit. The project cost  as  appraised  by  the
   financial institution shall be considered as investment  made  by  a  new
   unit. The progressive investment of the amount of project cost as soon as
   it reaches or crosses the point of Rs.100/- crores during  the  operation
   of the Scheme, the industrial unit shall acquire the  status  of  a  Very
   Prestigious Unit in order to claim enhanced proportionate benefits  under
   the Scheme.

12. Clause 2(k) provides for constitution of Screening  Committee  for  the
   purpose of consideration and to grant Eligibility Certificate  under  the
   New Incentive Scheme both for small  and  medium  and  also  large  scale
   industrial units to avail benefit under the  New  Incentive  Scheme.  The
   note appended to this sub-clause speaks  of  Small  Scale  Units,  Medium
   Scale Units and Large Scale Units. Small Scale  Units  means  a  unit  of
   which investment in plant and machinery does not exceed Rs.60/- Lakhs,  a
   Medium Scale Unit means  a unit of which the project cost does not exceed
   Rs. Five Crores and Large Scale Unit means a unit of  which  the  project
   cost exceeds Rs. Five Crores.


13. Clause 3 of the notification speaks of applicability of the Scheme.  By
   this clause, the State Government has made the Scheme applicable  to  (a)
   new industrial units, (b) industrial units  going  in  for  expansion  or
   diversification and (c) sick units.


14. Clause 4 of the Scheme provides for exemption from Payment of Sales Tax
   as per parameters mentioned in Annexure ‘C’  to  the  said  notification.
   This clause also envisages that the industrial unit which is  granted  an
   eligibility certificate by the Screening Committee is alone  exempted  to
   claim benefit of this notification.


15. Annexure ‘C’ provides for the quantum of sales tax exemption under  the
   Scheme. Para C  therein  is  relevant  for  the  purpose  of  this  case,
   therefore, omitting what is not necessary is extracted hereunder:-

                                ANNEXURE ‘C’

        QUANTUM OF SALES TAX EXEMPTION UNDER THE NEW INCENTIVE SCHEME




|Item  |Type of Units    |Extent of the   |Maximum       |Maximum time  |
|No.   |                 |percentage of   |exemption in  |limit for     |
|      |                 |exemption from  |terms of      |availing      |
|      |                 |tax             |percentage of |exemption from|
|      |                 |                |fixed capital |tax           |
|      |                 |                |investment    |              |
|      |                 |                |(FCI)         |              |
|1.    |New Units (Other |75% of total tax|100% of FCI in|Seven years   |
|      |than the units   |liability       |case of medium|              |
|      |mentioned at     |                |and large     |              |
|      |items 1A to 1F)  |                |scale units   |              |
|      |                 |                |and 125% of   |              |
|      |                 |                |FCI in case of|              |
|      |                 |                |small scale   |              |
|      |                 |                |units         |              |
|1A.   |Leather based New|90% of total tax|100% of FCI in|Seven years   |
|      |Unit             |liability       |case of medium|              |
|      |                 |                |and large     |              |
|      |                 |                |scale units   |              |
|      |                 |                |and 125% of   |              |
|      |                 |                |FCI in case of|              |
|      |                 |                |SSI units     |              |
|1B.   |New Units in     |90% of total tax|100% of FCI   |Nine years.   |
|      |Ceramic, Glass,  |liability for   |              |              |
|      |Electronics and  |first three     |              |              |
|      |Telecommuni-catio|years, 80% for  |              |              |
|      |ns industry      |next three years|              |              |
|      |having a FCI     |and 75% for the |              |              |
|      |between Rs.5     |remaining       |              |              |
|      |crores and Rs.25 |period.         |              |              |
|      |crores           |                |              |              |
|1C.   |New Units in     |100% of total   |100% of FCI   |Eleven years. |
|      |Ceramic, Glass,  |tax liability   |              |              |
|      |Electronics, and |for the first   |              |              |
|      |Telecommuni-catio|four years, 90% |              |              |
|      |ns industry      |for the next    |              |              |
|      |having a FCI of  |four years and  |              |              |
|      |Rs.25 crores or  |75% for the     |              |              |
|      |more             |remaining       |              |              |
|      |                 |period.         |              |              |
|1D    |New labour       |75% of total tax|145% of FCI in|Seven years.  |
|      |intensive units  |liability       |case of SSI   |              |
|      |as defined in the|                |units and 120%|              |
|      |Capital          |                |of FCI in case|              |
|      |Investment       |                |of medium and |              |
|      |Subsidy Scheme,  |                |large scale   |              |
|      |1990             |                |units.        |              |
|1E.   |New Cement units |75%, 50% & 25%  |125% of FCI in|Seven years.  |
|      |except in Tribal |of total tax    |case of small |              |
|      |Sub-Plan area.   |liability in    |scale units   |              |
|      |                 |case of small,  |subject to an |              |
|      |                 |medium and large|overall limit |              |
|      |                 |scale units     |of Rs.1.00    |              |
|      |                 |respectively    |crore and 100%|              |
|      |                 |                |of FCI in case|              |
|      |                 |                |of medium and |              |
|      |                 |                |large scale   |              |
|      |                 |                |units.        |              |
|1F.   |Large scale      |25% of total tax|100% of FCI   |Seven years.  |
|      |granite and      |liability       |              |              |
|      |marble units.    |                |              |              |
|2.    |Units (Other than|75% of total tax|100% of       |Seven years   |
|      |(a)  cement unit |liability       |additional FCI|              |
|      |except in Tribal |                |              |              |
|      |Sub-Plan area and|                |              |              |
|      |(b) large scale  |                |              |              |
|      |granite and      |                |              |              |
|      |marble units     |                |              |              |
|      |going in for     |                |              |              |
|      |expansion or     |                |              |              |
|      |diversification. |                |              |              |
|2A.   |Leather based    |75% of total tax|100% of       |Seven years   |
|      |units going in   |liability       |additional FCI|              |
|      |for expansion or |                |              |              |
|      |diversificat-ion |                |              |              |
|3.    |Sick Units       |50% of total tax|100% of FCI in|Seven years   |
|      |                 |liability       |case of medium|              |
|      |                 |                |and large     |              |
|      |                 |                |scale units & |              |
|      |                 |                |125% of FCI in|              |
|      |                 |                |case of small |              |
|      |                 |                |scale units.  |              |
|4.    |New Units        |75% of total tax|100% of FCI   |Nine years    |
|      |producing        |liability       |              |              |
|      |pollution control|                |              |              |
|      |equipments/      |                |              |              |
|      |Pioneering units/|                |              |              |
|      |Prestigious      |                |              |              |
|      |units.           |                |              |              |
|5.    |New Very         |90% of total tax|100% of FCI   |Eleven years  |
|      |Prestigious units|liability       |              |              |
|      |(Other than      |                |              |              |
|      |cement units     |                |              |              |
|      |except in Tribal |                |              |              |
|      |Sub-plan Area)   |                |              |              |
|6.    |100% Export      |100% of total   |100% of FCI   |Nine years    |
|      |Oriented         |tax liability   |              |              |
|      |Prestigious/     |                |              |              |
|      |Pioneering units |                |              |              |
|7.    |100% Export      |100% of total   |100% of FCI   |Eleven years  |
|      |Oriented Very    |tax liability   |              |              |
|      |Prestigious Units|                |              |              |

16. As we have observed earlier, Annexure-C has five  columns.  The  second
   column speaks of type of units, the third column speaks of the extent  of
   percentage of exemption from tax, the  fourth  column  provides  for  the
   maximum exemption in terms of percentage of FCI and  the  fifth  and  the
   last column provides the maximum time limit for availing  exemption  from
   tax. Prior to issuance of notification dated 13.12.1996, Annexure ‘C’ was
   primarily  confined  to  ‘New  Units’.  
After   the   introduction   of
   notification dated 13.12.1996, the exclusion is made  to  the  expression
   ‘New Units’ by specifically including certain type of industrial units by
   inserting items 1A to 1F. 
Item 1E specifically talks of New Cement  Units
   except in Tribal Sub-Plan area. 
The extent  of  percentage  of  exemption
   from tax under Item 1E depends on the type of unit or the industry. If it
   is a small scale unit, the extent of exemption is 75%, if  it  is  medium
   scale, the extent of exemption is 50%, and if it is large scale unit, the
   extent of percentage of exemption from tax is 25%. The maximum time limit
   for availing exemption from tax is restricted  to  seven  years.  Item  4
   speaks of New Units producing pollution  control  equipments,  pioneering
   units and prestigious units.  
The extent of the percentage  of  exemption
   from tax is 75% of  total  liability  and  the  maximum  time  limit  for
   availing exemption from tax is  9  years  from  the  date  of  commercial
   production.  
Item 5 relates to New  Very  Prestigious  Units  other  than
   cement units except in Tribal Sub-plan Area and the total  percentage  of
   exemption from tax is 90% of total tax liability  and  the  maximum  time
   limit for availing exemption from tax is eleven years.


17. Reverting to state the facts, the respondent-assessee  had  applied  to
   the State Level Screening Committee for claiming benefit of exemption  at
   75% under the Scheme. The Committee rejected the claim of the respondent-
   assessee and observed that since the respondent-assessee is a large scale
   unit covered under the specific provision of Item 1E of Annexure ‘C’,  it
   is entitled to 25% exemption, by its order dated 15.01.1998.


18. Being aggrieved by the said order, the respondent-assessee filed appeal
   before Rajasthan Tax Board, Ajmer (for short, ‘the Board’) in respect  of
   the calculation of eligible FCI  as  well  as  the  exemption  under  the
   Scheme. The Board while remanding the matter to the State Level Screening
   Committee held that  the  respondent-assessee  is  entitled  to  75%  tax
   exemption by holding the respondent-unit as Prestigious  Unit  under  the
   Scheme.


19. The revenue being aggrieved by the decision of  the  Board,  filed  Tax
   Revision Petition before the High Court under Section 86(2) of  the  Act.
   The High Court dismissed the revision petition filed by the  revenue  and
   upheld the decision of the Board by holding that the respondent-unit is a
   Prestigious Unit and therefore, entitled to 75% tax exemption  under  the
   Scheme.

20. Aggrieved by the order so passed by the  High  Court,  the  Revenue  is
   before us in this appeal.

21. We have heard learned counsel for the parties to the  lis  and  perused
   the documents on record as well as the order(s) passed by the authorities
   and the High Court, respectively.


22. Shri Rohington  Nariman,  learned  senior  counsel  appearing  for  the
   appellant submits that the case pleaded by respondent-unit right from the
   beginning of filing the application  before  the  State  Level  Screening
   Committee was that the new unit had  made  an  investment  of  more  than
   Rs.500/- crores by way of fixed capital assets and therefore they  should
   be placed under the category of ‘Prestigious  Unit’  and  accordingly  be
   granted eligibility certificate to claim 75% of exemption  from  tax  for
   the maximum time limit  provided  under  the  Scheme.   In  aid  of  this
   submission, the learned senior counsel would draw our  attention  to  the
   application and the accompanying affidavit filed  by  the  respondent-new
   unit before the State Level Screening Committee. He would further contend
   that the respondent-unit before all the authorities below  including  the
   High Court had adopted  the  stand  that  the  fixed  capital  investment
   excluding investment made before 05.03.1987 was more than Rs.532/- crores
   and therefore the respondent-unit is a Prestigious Unit  entitled  to  an
   exemption of 75% of total tax liability. It is further contended that the
   respondent-new unit being New Cement Unit and further being  large  scale
   unit though can avail the benefit of the incentive  scheme  under  1E  of
   Annexure ‘C’ which provides for exemption upto 25% of total  liabilities,
   it cannot avail the benefit of exemption at the rate of 75% under Item  4
   as Prestigious Unit. He would  further  submit  that  benefit  to  cement
   industry is confined to  the  extent  envisaged  under  the  Item  1E  of
   Annexure-C as the said item is a specific provision  relating  to  cement
   industry and thus would prevail over other provisions which  are  general
   in character in terms of reference to new cement unit.  Alternatively, it
   is contended that the respondent-unit being new cement unit, it may  fall
   under `New Very Prestigious Unit’, however Item 5 of Annexure `C’  speaks
   of the New Very Prestigious Units other than cement  units  except  those
   located in Sub-Plan area, respondent-unit may not be  entitled  to  avail
   the benefit of the Scheme.

23. Per contra, learned  counsel,  Shri  Sudhir  Gupta  would  justify  the
   reasoning and the conclusion reached by the High  Court  while  rejecting
   the revenue’s revision petition and thereby confirming the view expressed
   by the Board. He would, inter alia,  submit  that  Item  1E  is  only  an
   exception to the general rule envisaged in Item 1 and not an exception to
   the other Items in the Annexure-C, i.e., Items  2  to  7  as  it  is  not
   intended to govern the entire field of exemptions made available  to  the
   cement industry so as to deny the benefits to a unit  even  if  it  falls
   under another Item envisaging better incentives. He would further  submit
   that since new cement unit is specifically excluded from  application  of
   Item 1 (new units generally), Item 2  (expanding/diversifying  unit)  and
   Item 5 (very prestigious unit) but not   Item 4 (prestigious units), Item
   6 (export  oriented  prestigious/pioneering  unit)  and  Item  7  (export
   oriented very prestigious units), it falls that the intention behind such
   express exclusion is  such  that  but  for  the  said  exclusion,  cement
   industries would be included in the said entries.  He  would  strenuously
   submit that since the tax exemption clauses are made  with  a  beneficent
   object, i.e.,  to  encourage  investment  in  specified  rural/semi-urban
   areas, their construction must be liberal such  as  to  confer  the  most
   beneficial meaning to the provisions.

24. The facts which are not in dispute  are  that  the  respondent-assessee
   (hereinafter referred to as ‘the Company’) established a new cement  unit
   within Panchayat Samiti, Pindwara  and  commenced  commercial  production
   some time in the year 1997. It  engaged  itself  in  the  manufacture  of
   cement. The total capital investment – (FCI) in the new  industrial  unit
   claimed by the Company was Rupees 53252.87 Lakhs (Rs.532.52/- crores)


25. The Company had  applied  for  grant  of  Eligibility  Certificate  for
   exemption from payment of Central  Sales  Tax  and  Rajasthan  Sales  Tax
   before the State Level Screening Committee,  Jaipur,  under  the  Scheme.
   However, the Screening Committee accepted only Rs.5553.72 Lakhs (Rs.55.32
   crores) as FCI eligible for availing the benefits under  the  Scheme.  On
   the aforesaid basis the State Level Screening  Committee  certified  that
   the company is entitled to avail exemption of tax to the extent of 25% of
   the tax liability by treating the same to be a Large Scale  Industry.  In
   the appeal, the Board took the view since the Company had  invested  more
   than Rs.25 crores and has employed more than  250  workmen,  it  has  the
   status of `New Prestigious Unit’ and thus, falls within the definition of
   a Prestigious Unit and should be governed by Item 4 of Annexure `C’ being
   entitled to avail 75% of total tax liability.   This  view,  as  we  have
   already observed, is accepted by the High Court, while dismissing the tax
   revision petition filed by the revenue.

26. At the outset, we would observe  that  the  High  Court  has  erred  in
   reaching its conclusion by holding that (a) the respondent-company  would
   fall into all the three categories  of  industries  referred  to  in  the
   Scheme, that is to say it is a new unit which is a ‘Large Scale Unit’,  a
   “Prestigious New Unit” and  also  a  “Very  Prestigious  Unit”;  (b)  the
   classification of a new unit, viz. small scale, medium  scale  and  large
   scale under item 1E on the basis of scale of investment does not denude a
   new industrial unit of any type  of  the  special  status  of  “Pioneer”,
   “Prestigious” and “Very Prestigious” unit under items 4  and  5  to  also
   exclude operation of General entry; and (c) the special entry  would  not
   exclude the applicability of general entry in context of the Scheme so as
   to exclude the operation of items 4,  6  and  7.  Thereby  implying  that
   though there exists an overlap between the general and special provision,
   the general provision would also be sustained and the two would co-exist.



27. Before we deal with the  fact  situation  in  the  present  appeal,  we
   reiterate the settled legal position in law, that is, if in  a  Statutory
   Rule or Statutory Notification, there are two expressions  used,  one  in
   General Terms and  the  other  in  special  words,  under  the  rules  of
   interpretation, it has to be understood that the special words  were  not
   meant to be included in the general expression.  Alternatively, it can be
   said that where a Statute contains both a General Provision  as  well  as
   specific provision, the later must prevail.


28. We are mindful of the principle that the  Court  should  examine  every
   word of a statute in its context and  must  use  context  in  its  widest
   sense. We are also in acquaintance with observations  of  this  Court  in
   Reserve Bank of India v. Peerless  General  Finance  and  Investment  Co.
   Ltd., 1987 SCR (2) 1 where Chinnappa Reddy, J. noting the  importance  of
   the context in which every word is used in the matter  of  interpretation
   of statutes held thus:

       “Interpretation must depend on the text and the context. They are the
       basis of interpretation. One may well say if the text is the texture,
       context is what gives the colour. Neither can be  ignored.  Both  are
       important. That  interpretation  is  best  which  makes  the  textual
       interpretation match the contextual. A statute  is  best  interpreted
       when we know why it was enacted. With  this  knowledge,  the  statute
       must be read, first as a whole and then section by section, clause by
       clause, phrase by phrase and word by word. If a statute is looked at,
       in the context of its enactment, with the  glasses  of  the  statute-
       maker, provided by such context, its scheme, the  sections,  clauses,
       phrases and words may take colour and appear different than when  the
       statute is looked at without the glasses  provided  by  the  context.
       With these glasses we must look at the Act as a  whole  and  discover
       what each section, each clause, each phrase and each  word  is  meant
       and designed to say as to fit into the scheme of the entire  Act.  No
       part of a statute and no word  of  a  statute  can  be  construed  in
       isolation. Statutes have to be construed so that  every  word  has  a
       place and everything is in its place.”




29. It is well established that when  a  general  law  and  a  special  law
   dealing with some aspect dealt with by the general law are  in  question,
   the rule adopted and applied is one of  harmonious  construction  whereby
   the general law, to  the  extent  dealt  with  by  the  special  law,  is
   impliedly repealed. This principle finds its origins in the  latin  maxim
   of generalia specialibus  non  derogant,  i.e.,  general  law  yields  to
   special law should they operate in the same field on same subject.
(Vepa P.  Sarathi,  Interpretation  of  Statutes,  5th  Ed.,  Eastern  Book
Company; N. S. Bindra’s Interpretation of Statutes, 8th Ed., The  Law  Book
Company; Craies on Statute Law, S.G.G.Edkar,  7th  Ed.,  Sweet  &  Maxwell;
Justice G.P. Singh,  Principles  of  Statutory  Interpretation,  13th  Ed.,
LexisNexis; Craies on Legislation, Daniel Greenberg, 9th Ed., Thomson Sweet
& Maxwell, Maxwell on Interpretation of Statutes, 12th Ed., Lexis Nexis)




30. Generally, the principle has found vast application in cases  of  there
   being two statutes: general or specific  with  the  latter  treating  the
   common subject matter more specifically  or  minutely  than  the  former.
   Corpus Juris  Secundum,  82  C.J.S.  Statutes  §  482  states  that  when
   construing a general and a specific statute pertaining to the same topic,
   it is necessary to consider the statutes as consistent with  one  another
   and such statutes therefore should be harmonized, if possible,  with  the
   objective of giving effect to a consistent  legislative  policy.  On  the
   other hand, where a general statute and a specific  statute  relating  to
   the same subject matter cannot be reconciled,  the  special  or  specific
   statute ordinarily will control. The provision more specifically directed
   to the matter at issue prevails as an exception to  or  qualification  of
   the provision which is more general in nature, provided that the specific
   or special statute clearly includes the matter in controversy.
(Edmond v. U.S., 520 U.S. 651, Warden, Lewisburg Penitentiary  v.  Marrero,
417 U.S. 653)

31.  The maxim generalia specialibus non derogant is dealt with  in  Volume
   44 (1) of the 4th ed. of Halsbury's Laws of England at paragraph 1300  as
   follows:
        “The  principle  descends  clearly  from decisions of  the House  of
        Lords in Seward v. Owner of  “The Vera  Cruz”,  (1884)  10  App  Cas
        59 and the Privy Council in Barker v Edger, [1898] AC  748  and  has
        been  affirmed  and  put  into  effect  on   many   occasions.... If
        Parliament has considered all the circumstances of, and made special
        provision  for,  a  particular  case,  the  presumption  is  that  a
        subsequent enactment of a purely general character  would  not  have
        been intended to interfere with that provision;  and  therefore,  if
        such an enactment, although inconsistent in substance, is capable of
        reasonable and sensible application without extending to the case in
        question, it is prima facie to be construed as not so extending. The
        special provision stands as an exceptional proviso upon the general.
        If,  however,  it  appears  from  a  consideration  of  the  general
        enactment in the light of admissible circumstances that Parliament's
        true  intention  was  to  establish  thereby  a  rule  of  universal
        application, then  the  special  provision  must  give  way  to  the
        general.”

32. The question in Seward v. Owner of the “Vera Cruz”, (1884) 10  App  Cas
   59 was whether Section 7 of the Admiralty Court Act of 1861,  which  gave
   jurisdiction to that Court over “any claim for damage done by  any  ship”
   also gave jurisdiction over claims for loss of life which would otherwise
   come under the Fatal Accidents Act, 1846. It was held  that  the  general
   words of Section 7 of  the  Admiralty  Court  Act  did  not  exclude  the
   applicability of the Fatal Accidents Act  and  therefore,  the  Admiralty
   Court had no jurisdiction to entertain a claim for damages  for  loss  of
   life.

33. The adoption of the aforesaid  rule  in  application  of  principle  of
   harmonious  construction  has  been  explained  by  Kasliwal   J.   while
   expressing his partial dissent to the majority judgment in St.  Stephen’s
   College v. University of Delhi, (1992) 1 SCC 558 as follows:



        “140. …The golden rule of interpretation is  that  words  should  be
        read in the  ordinary,  natural  and  grammatical  meaning  and  the
        principle of harmonious construction merely applies  the  rule  that
        where there is a general provision of law dealing  with  a  subject,
        and a special provision dealing with the same subject,  the  special
        prevails over the general. If it is not constructed in that way  the
        result would be that the special provision would be wholly defeated.
        The House of Lords observed in Warburton v. Loveland, (1824-34)  All
        ER Rep 589 as under:




        “No rule of construction can require that when the words of one part
        of statute convey a  clear  meaning  …  it  shall  be  necessary  to
        introduce  another  part  of  statute   which   speaks   with   less
        perspicuity,  and  of  which  the  words  may  be  capable  of  such
        construction, as by possibility to  diminish  the  efficacy  of  the
        first part.”




        (Anandji Haridas and Co. (P) Ltd. v. S.P. Kasture, (1968) 1 SCR 661,
        Patna Improvement Trust v. Lakshmi Devi,  1963  Supp  (2)  SCR  812,
        Ethiopian Airlines  v.  Ganesh  Narain  Saboo,  (2011)  8  SCC  539,
        Usmanbhai Dawoodbhai Memon v. State of Gujarat, (1988)  2  SCC  271,
        South India Corpn. (P) Ltd. v. Secy., Board of Revenue,  Trivandrum,
        (1964) 4 SCR 280, Maharashtra State Board of  Secondary  and  Higher
        Secondary Education v. Paritosh Bhupeshkumar Sheth, (1984) 4 SCC 27)




34.  In J.K. Cotton Spinning & Weaving Mills Co. Ltd.  v.  State  of  U.P.,
   (1961) 3 SCR 185, this Court has clarified that not only does  this  rule
   of construction resolve the conflicts between the  general  provision  in
   one statute and the special provision in another, it also  finds  utility
   in resolving a conflict between general and  special  provisions  in  the
   same legislative instrument too and observed that:

        “9. …We reach the same result by applying another well known rule of
        construction that general provisions yield  to  special  provisions.
        The learned Attorney-General seemed to suggest that while this  rule
        of construction is applicable to resolve the  conflict  between  the
        general provision in one Act and the special  provision  in  another
        Act, the rule cannot apply in resolving a conflict  between  general
        and special provisions in  the  same  legislative  instrument.  This
        suggestion does not find support in either principle  or  authority.
        The rule that general provisions should yield to specific provisions
        is not an arbitrary principle made by lawyers and Judges but springs
        from the common understanding of men and women that  when  the  same
        person gives two directions one covering a large number  of  matters
        in general and another to only some of them his  intention  is  that
        these latter directions should prevail as  regards  these  while  as
        regards all the rest the earlier direction should  have  effect.  In
        Pretty v. Solly (quoted in Craies on Statute Law at  p.m.  206,  6th
        Edn.) Romilly, M.R., mentioned the rule thus:


        “The rule is, that whenever there is a particular  enactment  and  a
        general enactment in the same statute and the latter, taken  in  its
        most comprehensive sense, would overrule the former, the  particular
        enactment must be operative, and the general enactment must be taken
        to affect only the other parts  of  the  statute  to  which  it  may
        properly apply.”


        The rule has been applied as between  different  provisions  of  the
        same statute in numerous cases some of which only need be mentioned:
        De Winton v. Brecon, Churchill v. Crease, United States v. Chase and
        Carroll v. Greenwich Ins. Co.


        10. Applying this rule of construction that  in  cases  of  conflict
        between a specific provision and a general  provision  the  specific
        provision prevails  over  the  general  provision  and  the  general
        provision applies only to such cases which are not  covered  by  the
        special provision, we must hold that clause 5(a) has no  application
        in a case where the special provisions of clause 23 are applicable.”

35. Lord Cooke of Thorndon pointed out, however, in Effort Shipping Co Ltd.
   v. Linden Management, SA [1998] AC 605 that the maxim is not a  technical
   rule peculiar to English statutory interpretation, rather it  "represents
   simple   common   sense   and   ordinary    usage".    Bennion, Statutory
   Interpretation, 5th ed. (2008), p. 1155 states that  it  is  based,  like
   other linguistic canons of construction, "on the rules of logic, grammar,
   syntax  and  punctuation,  and  the  use  of  language  as  a  medium  of
   communication  generally.  As  Lord  Wilberforce  observed  in Associated
   Minerals Consolidated Ltd v Wyong Shire Council [1975] AC 538, 554,  that
   it is still a matter of legislative intention, which the courts endeavour
   to extract from all available indications.

36. In Waverly Jute Mills Co. Ltd. v. Raymon & Co. (India) (P) Ltd., (1963)
   3 SCR 209 and Union of India v. India Fisheries (P) Ltd., AIR 1966 SC  35
   this Court has observed that when there is an apparent  conflict  between
   two independent provisions of law, the special provision must prevail. In
   CCE v. Jayant Oil Mills (P)  Ltd.,  (1989)  3  SCC  343  this  Court  has
   accepted the aforesaid rule as  “the basic rule of construction” that  is
   to say “a more specific item should be preferred  to  one  less  so.”  In
   Sarabjit Rick Singh v. Union of India, (2008) 2 SCC 417 this Court has in
   fact followed the aforesaid precedents thus:

        “58. The Act is a special statute. It shall, therefore, prevail over
        the provisions of a  general  statute  like  the  Code  of  Criminal
        Procedure.”

37. This Court has noticed the application of the said rule in construction
   of taxing statutes along with the proposition that the provisions must be
   given the most beneficial interpretation in CIT v. Shahzada Nand &  Sons,
   (1966) 3 SCR 379:

        “10. …The classic statement of Rowlatt, J., in Cape Brandy Syndicate
        v. IRC, (1921) 1 KB 64, 71 still holds the field. It reads:


          “In a Taxing Act one has to look merely at what is  clearly  said.
          There is no room for any intendment. There 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.”


        To this may be added a rider: in a case  of  reasonable  doubt,  the
        construction most beneficial to the subject is to  be  adopted.  But
        even so, the fundamental rule of construction is the  same  for  all
        statutes, whether fiscal or otherwise. “The underlying principle  is
        that the meaning and intention of a statute must be  collected  from
        the plain and unambiguous expression used therein rather  than  from
        any notions which may be entertained by the court as to what is just
        or expedient.” The expressed intention must guide the court. Another
        rule of construction which is relevant to  the  present  enquiry  is
        expressed in the maxim, generalia specialibus  non  derogant,  which
        means that when there is a conflict between a general and a  special
        provision, the latter shall prevail. The  said  principle  has  been
        stated in Craies on Statute Law, 5th Edn., at p. 205, thus:


          “The rule is, that whenever there is a particular enactment and  a
          general enactment in the same statute, and the  latter,  taken  in
          its most comprehensive  sense,  would  overrule  the  former,  the
          particular enactment must be operative, and the general  enactment
          must be taken to affect only the other parts  of  the  statute  to
          which it may properly apply.”


        …When the words of a section are clear, but its scope is  sought  to
        be curtailed by construction, the approach suggested by Lord Coke in
        Heydon case, (1584) 3 Rep 7b, yield better results:


          “To arrive at the real meaning, it is always necessary to  get  an
          exact conception of the aim, scope, and object of the  whole  Act:
          to consider, according to Lord Coke: (1) What was the  law  before
          the Act was passed; (2) What was the mischief or defect for  which
          the  law  had  not  provided;  (3)  What  remedy  Parliament   has
          appointed; and (4) The reason of the remedy.””
                                    (emphasis supplied)


38. In LIC v. D.J. Bahadur, (1981) 1 SCC 315 this Court was confronted with
   the question as to whether the LIC Act is  a  special  legislation  or  a
   general legislation and while considering the rule  in  discussion,  this
   Court observed thus:
        “49.  …the  legal  maxim  generalia  specialibus  non  derogant   is
        ordinarily attracted where there is a conflict between a special and
        a general statute and an  argument  of  implied  repeal  is  raised.
        Craies states the law correctly:


          “The general rule, that prior statutes are held to be repealed  by
          implication by subsequent statutes if the two  are  repugnant,  is
          said not to apply if  the  prior  enactment  is  special  and  the
          subsequent enactment is general, the rule of law being, as  stated
          by Lord Selbourne in Sewards v. Vera Cruz, ‘that where  there  are
          general words in a later Act capable of  reasonable  and  sensible
          application without extending them  to  subjects  specially  dealt
          with by earlier legislation, you are not to hold that earlier  and
          special legislation indirectly  repealed,  altered,  or  derogated
          from merely by force of such general words, without any indication
          of a particular intention to do so. There  is  a  well-known  rule
          which has application to this case, which  is  that  a  subsequent
          general Act does not affect a prior special  Act  by  implication.
          That this is the law cannot be  doubted,  and  the  cases  on  the
          subject will be found collected in the third edition of Maxwell is
          generalia specialibus non derogant — i.e. general provisions  will
          not abrogate special provisions.’ When the legislature  has  given
          its attention to a separate subject and made provision for it, the
          presumption is that a subsequent general enactment is not intended
          to interfere with the special provision unless it  manifests  that
          intention very clearly. Each enactment must be construed  in  that
          respect according to its own subject-matter and its own terms.”



39. In Ashoka Marketing Ltd. v. Punjab National Bank, (1990) 4 SCC 406 this
   Court has placed reliance upon Bennion, Statutory Interpretation  (supra)
   and J.K. Cotton Spinning & Weaving Mills case  (supra),  amongst  others,
   and explaining the rationale of this  rule  has  reiterated  the  law  as
   under:

        “52. In U.P. State Electricity Board v. Hari Shanker Jain this Court
        has observed:


          “In  passing  a  special  Act,  Parliament  devotes   its   entire
          consideration to a particular  subject.  When  a  general  Act  is
          subsequently passed, it is logical to presume that Parliament  has
          not repealed or modified the former special Act unless it  appears
          that  the  special   Act   again   received   consideration   from
          Parliament.”


        53. In Life Insurance Corporation v. D.J. Bahadur Krishna  Iyer,  J.
        has pointed out :


           “In determining whether a statute is a special or a general  one,
          the focus must  be  on  the  principal  subject  matter  plus  the
          particular perspective.  For  certain  purposes,  an  Act  may  be
          general and for certain other purpose it may  be  special  and  we
          cannot blur distinctions when dealing with finer points of law.””

40. In U.P. SEB v. Hari Shankar Jain, (1978)  4  SCC  16,  this  Court  has
   concluded that if Section 79(c) of the Electricity Supply  Act  generally
   provides for the making of regulations providing for  the  conditions  of
   service of the employees of the Board, it  can  only  be  regarded  as  a
   general provision which must yield  to  the  special  provisions  of  the
   Industrial Employment (Standing Orders) Act in respect of matters covered
   by the latter Act, and observed that:

            “9. The reason for the rule that  a  general  provision  should
            yield to a specific provision is this:  In  passing  a  special
            Act,  Parliament  devotes  its  entire   consideration   to   a
            particular subject. When a general Act is subsequently  passed,
            it is logical to presume that Parliament has  not  repealed  or
            modified the former Special Act  unless  it  appears  that  the
            Special Act again received consideration from Parliament.  Vide
            London and Blackwall Railway v.  Limehouse  District  Board  of
            Works, and Thorpe v. Adams.


41. In Gobind Sugar Mills Ltd. v. State of Bihar,  (1999)  7  SCC  76  this
   Court has observed that while determining the question whether a  statute
   is a general or a special one, focus must be on  the  principal  subject-
   matter coupled with  a  particular  perspective  with  reference  to  the
   intendment of the Act. With this basic principle in mind, the  provisions
   must be  examined  to  find  out  whether  it  is  possible  to  construe
   harmoniously the two provisions. If it is not  possible  then  an  effort
   will have to be made to ascertain whether the legislature had intended to
   accord a special treatment vis-à-vis the general entries  and  a  further
   endeavour will have to be made to find out whether the specific provision
   excludes the applicability of the general  ones.  Once  we  come  to  the
   conclusion that intention of the legislation is to  exclude  the  general
   provision then the  rule  “general  provision  should  yield  to  special
   provision” is squarely attracted.

42. Having noticed the aforesaid, it could be concluded that  the  rule  of
   statutory construction that the specific governs the general  is  not  an
   absolute rule but is merely a strong indication of statutory meaning that
   can be overcome by textual indications that point in the other direction.
   This rule is particularly applicable where the  legislature  has  enacted
   comprehensive scheme and has deliberately targeted specific problems with
   specific solutions. A subject specific provision relating to a  specific,
   defined and descriptable subject is regarded as an exception to and would
   prevail over a general provision relating to a broad subject.


43. In the  instant  case,  the  item  1E  is  subject  specific  provision
   introduced by an amendment in 1996 to  the  Scheme.  
The  said  amendment
   removed “new cement industries”  from  the  non-eligible  Annexure-B  and
   placed it into Annexure-C amongst the eligible industries. It  classified
   the cement units for eligibility of tax exemption into three  categories:
   small, medium and large. The said categories  are  comprehensive  whereby
   small and medium cement units have been prescribed to have  maximum  FCIs
   of Rs.60/- lakhs and Rs.5/- crores, respectively and large to be over the
   FCI of Rs.5/- crores. 
The maximum ceiling for large cement units has been
   purposefully left open and thereby reflects that the intention clearly is
   to provide for an all-inclusive provision for new cement units so  as  to
   avoid  any  ambiguity  in  determination  of  appropriate  provision  for
   applicability to new cement units to seek exemption.




44.  It  leaves  no  doubt  that  what  is  specific  has  to  be  seen  in
   contradistinction  with  the  other  items/entries.  
The  provision  more
   specific than the other on the same subject would  prevail.  Here  it  is
   subject specific item and therefore as against items 1, 4, 6 and 7, which
   deal with units of all industries and not only cement, item 1E restricted
   to only cement units would be a specific and special entry and thus would
   override the general provision.


45.  The  proposition  put  forth  by  the  respondent-Company   that   the
   construction which is most beneficial to the assessee must be applied and
   adopted fails to impress upon us its application in this case. 
Howsoever,
   it is true that the canons of construction must  be  applied  to  extract
   most beneficial re-conciliation of provisions. In case of fiscal  statute
   dealing with exemption, it would require  interpretation  benefiting  the
   assessee. 
But here the introduction of the subject  specific  entry  vide
   amendment into general scheme of exemption speaks volumes in  respect  of
   intention of the legislature to restrict the benefit to cement industries
   as available only under Item 1E, which categorically classified them into
   three as per their FCI. 
The specific  entries  being  mutually  exclusive
   have been placed so systematically arranged and classified in the Scheme.
   The construction of provisions must not be divorced from  the  object  of
   introduction  of  subject  specific  provision  while   retaining   other
   generalized provision  that  now  specifically  exclude  the  new  cement
   industries,  which  could  otherwise  fall  into  its  ambit,  lest  such
   interpretation would be not ab  absurdo  (i.e.,  interpretation  avoiding
   absurd results).

46. Therefore, in our considered view the respondent-Company would only  be
   eligible for grant of exemption under Item 1E as a large new cement  unit
   in accordance with its FCI being above Rs.5/- crores.  
In  light  of  the
   aforesaid, we are of the considered opinion that the judgment  and  order
   passed by the High Court ought to be set aside and  the  appeals  of  the
   Revenue requires to be allowed.


47. In the result, the appeal is allowed and the judgment and order  passed
   by the High Court is set aside. No order as to costs.

                                                      ....................J.
                                                              [ H.L. DATTU ]



                                                      ....................J.
                                                              [ S.A. BOBDE ]

NEW DELHI,
FEBRUARY 19, 2014.










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