9911796707
TMI Blog2014 (7) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... ation and distribution of power. The State Government enacted the Gujarat Special Economic Zone Act, 2004 (hereinafter referred to as 'the SEZ Act'), which was brought into effect from May 15, 2004. The petitioner after obtaining necessary approval from the State Authorities set up its power generation unit in Dahej SEZ Area. The petitioner generates power at the said location and distributes the same to the other units situated in the SEZ and Domestic Tariff Area (for short 'DTA'). The petitioner was also granted eligibility certificate by the Development Commissioner on October 26, 2009, which certificate provides inter alia that the petitioner would be eligible to avail exemption from taxes, cess, duties, fees or any other levies under the State laws under section 21(1) of the SEZ Act, including : "(d) .. .. exemption from payment of salestax and other taxes for purchase of goods and services from unit in Domestic Tariff Area under Section-21(2) of the Gujarat Special Economic Zone Act, 2004." 4. The case of the petitioner is that section 21 of the Act provides for total exemption from payment of various State taxes to the units situated in SEZ area. The provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate fiscal statutes. Section 21 of the SEZ Act in clear terms grants exemption from payment of State taxes to the SEZ units. The expression "from time to time" would include not only the existing laws, but also those made later. In this respect, reliance was placed on the following decisions : (1) Union Territory of Chandigarh and others v. Rajesh Kumar Basandhi and another, reported in (2003) 11 SCC 549. (2) Thyssen Stahlunion v. Steel Authority of India Ltd., reported in AIR 1999 SC 3923. (3) Management of M.C.D. v. Prem Chand Gupta and another, reported in AIR 2000 SC 454. (ii) The intention of the State legislation in enacting sections 21 and 22 of the SEZ Act was clear, namely, to grant exemption from various State taxes to SEZ units. This was the general fiscal benefit offered to industrial undertakings to set up their establishments in SEZ areas. To avoid any conflict, section 22 of the SEZ Act gave overriding effect to the provisions of the SEZ Act. Any later enactment without nonobstante clause cannot have primacy over section 21 of the SEZ Act. (iii) In taxing statute there would be no room for intendment. If the statute does not permit levy of tax, the same cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions. (2) Inputs (goods and services) made to Zone Units from Domestic Tariff Area shall be exempted from sales tax and other taxes under the State laws. (3) The Developer shall also be entitled to the benefits of exemption provided in sub-sections (1) and (2) for the entire Zone." 8. Section 22 of the SEZ Act which is contained in Chapter IX which contains miscellaneous provisions gives overriding effect to the Act over other laws for the time being in force in the following manner : "22. The provisions of this Act shall have effect notwithstanding anything contained in any other law for the time being in force." 9. In terms of section 21 of the SEZ Act, thus the units located in SEZ area enjoy certain concessions and exemptions. In particular, in terms of clause (c) of sub-section (1) of section 21, all sales and transactions within the areas specified therein would be exempt from all taxes, cess, duties, fees or other levies under any State laws to the extent of tax on sales or purchase of goods other than goods specified in Schedule III of the VAT Act, Luxury Tax, Entertainment Tax and other taxes payable on sales and transactions. The fact that by virtue of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s; if the person sought to be taxed, comes within the letter of the law he must be taxed however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be." 14. The said passage, as has been stated in the said pronouncement was quoted with approval by the Privy Council in Bank of Chettinad v. Income-tax Commmr.- AIR 1940 PC 183 and the Privy Council had registered its protest against the suggestion that in revenue cases "the substance of the matter" may be regarded as distinguished from the strict legal position. Proceeding further the learned Judge stated that : "It is no doubt true that in construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the Revenue satisfies the Court that the case falls strictly within the provision of the law, the subject can be taxed. If, on the other hand, the case is not covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be implied. One can only look fairly at the language used." Relying upon this passage Lord Upjohn said : "Fiscal measures are not built upon any theory of taxation". 17. In Commissioner of Wealth Tax, GujaratIII, Ahmedabad v. Ellis Bridge GymkhanaAIR 1998 SC 120, it has been observed thus : "The rule of construction of a charging section is that before taxing any person, it must be shown that he falls within the ambit of the charging section by clear words used in the section. No one can be taxed by implication. A charging section has to be construed strictly. If a person has not been brought within the ambit of the charging section by clear words, he cannot be taxed at all." 11. Section 2(37) of the VAT Act inserted with effect from April 01, 2008, by Amendment Act (9) of 2008, defines the term "zero rated sale" as under : "2(37) "zero rated sale" means a sale of goods by a registered dealer to another registered dealer on which the rate of tax leviable shall be zero but tax credit on the purchase related to that sale is admissible." 12. Section 5A of the VAT Act also introduced with effect from April 01, 2008 by the same Amendment Act (9) of 2008, reads as under : "5A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be specified by the State Government by notification in the Official Gazette, then such dealer shall be liable to pay purchase tax on the turnover of such purchases at the rate set out against each of such goods specified in Schedule II." 14. Section 11 of the VAT Act pertains to tax credit. Sub-section(1) of section 11 allows the registered dealer who has purchased taxable goods to claim tax credit equal to the amount of tax paid by him during the tax period under sub-sections (i) to (v) or (vi) of section 9, was also introduced with effect from April 01, 2008. 15. It can, thus, be seen that after April 01, 2008, the VAT Act has made provisions for collection of purchase tax even from units located in SEZ areas in relation to "zero rated sale". The legislative scheme appears to be that the sales which fall under the "zero rated sales" would invite no sales tax to be borne by the seller, but the purchaser would have to pay the purchase tax and, in turn, would be entitled to take tax credit as provided under section 2(37) and section 11(1) of the VAT Act. Whatever be the intention, in our opinion, without there being any clear provision giving such statutory provisions primac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time present or denote a single period of time, but its general sense is that of time indefinite, and refers to an indefinite state of facts which will arise in the future, and which may (and probably will) vary from time to time. [Ellison v. Thomas, 31 LJ Ch 867; 32 LJ Ch 32; Coles v. Pack, LR 5 CP 65]." xxx xxx xxx 16. The intention of the appellant also does not appear to be to confine the meaning of the phrase "for the time being" to a single time which would be demonstrated by the fact that in the notification issued for recruitment, one of the conditions was that the candidate should have experience of two years at the Bar. This condition was introduced by amendment to Section 87-A on 24-12-1991 that is to say the amendment in the rule regarding two years experience was included in the requirement of eligibility. xxx xxx xxx The consequence of giving effect to the notification dated 13-1-1992 w.e.f. 1-4-1991 would be that Punjab Rules as existing on 141991 would be applicable. If the argument of the appellant is accepted that the phrase "for the time being" was applicable for only one time and not for future amendments, Punjab Rules, as existed on 1-4-1991 alone woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce when Service Regulations of 1959 were promulgated and not any latter Rules.It is difficult to countenance this submission. Rules for the time being in force will have a nexus with the regulation of condition of service of the municipal officers at the relevant time as expressly mentioned in Regulation 4(1). Therefore, whenever the question of regulation of conditions of service of the municipal officers comes up for consideration, the relevant Rules in force at that time have to be looked into. This is the clear thrust of Regulation 4(1). Its scope and ambit cannot be circumscribed and frozen only to the point of time in the year 1959, when the Service Regulations were promulgated. If such was the intention of the framers of the Regulation, Regulation 4(1) would have employed a different phraseology, namely, "rules at present in force" instead of the phraseology "rules for the time being in force". The phraseology "rules for the time being in force" would necessarily mean rules in force from time to time and not rules in force only at a fixed point of time in 1959 as tried to be suggested by learned counsel for the respondent-workman." 18. The consistent view of the Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limited application when it came to the fiscal benefits contained in section 21 of the SEZ Act. As we have noted, section 21 of the SEZ Act granted several benefits of tax waivers to the transactions entered into in the specified areas within the SEZ. These were necessarily State taxes. But for section 21 of the SEZ Act such taxes would be levied even on the transactions entered into within the said specified areas. In absence of section 22 of the SEZ Act, there would be a conflict between various taxing statutes and section 21 of the SEZ Act. In order to avoid such conflict, section 22 of the SEZ Act was enacted giving overriding effect. Having done so, in our opinion, without making any matching provision in the VAT Act, the overriding effect given to the provisions made in the SEZ Act by virtue of section 22 of the Act cannot be whittled down. If the VAT Act and in particular, sections 5A and 9(5) also had a similar non-obstante clause, it would become a matter of legal scrutiny as to which one of the two non-obstante clauses would prevail. In the present case, we are not confronted with such a situation. It was in this background that the Supreme Court in the case of Ketan Par ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
