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TMI Blog2015 (7) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Surtax Act to which the power of exemption was intended to operate i.e. sub-section 2(a) and 2(b) of Section 24AA. If out of the two limbs where the power of exemption was intended to operate, the repository of the power i.e. Central Government, had consciously chosen to grant exemption in one particular field i.e. foreign companies covered by sub-section 2(a) of Section 24-AA, the scope of the grant cannot be enhanced or expanded by a judicial pronouncement which is what the arguments made on behalf of the appellants intend to achieve. Any such interpretation must, therefore, be avoided. Consequently, we see no reason to depart from the basic principles of interpretation, as already noticed, that should govern the present issue. - CIVIL APPEAL NO. 730 OF 2007 - - - Dated:- 1-7-2015 - RANJAN GOGOI and PINAKI CHANDRA GHOSE, JJ. CIVIL APPEAL NO.728 OF 2007 ,CIVIL APPEAL NO.732 OF 2007 ,CIVIL APPEAL NO.734 OF 2007 ,CIVIL APPEAL NO.735 OF 2007 ,CIVIL APPEAL NO.739 OF 2007 ,CIVIL APPEAL NO.742 OF 2007 ,CIVIL APPEAL NO.4140 OF 2007 ,CIVIL APPEAL NO.4785 OF 2007 ,CIVIL APPEAL NO.4787 OF 2007 ,CIVIL APPEAL NO.4790 OF 2007 ,CIVIL APPEAL NO.6009 OF 2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or extraction or production of mineral oils; and (b) foreign companies providing any services or facilities or supplying any ship, aircraft, machinery or plant (whether by way of sale or hire) in connection with any business consisting of the prospecting for or extraction or production of mineral oils carried on by that Government or any person specified by that Government in this behalf by notification in the official Gazette. (3) Every notification issued under this section shall be laid before each House of Parliament. Explanation.-For the purposes of this section, mineral oil includes petroleum and natural gas. GSR No. 307(E) - Exemption from surtax of foreign companies with whom Central Government has ente... Exemption from surtax of foreign companies with whom Central Government has entered into agreements for participation in business of prospecting for or extraction of mineral oils -Notification issued under sub-section (1) Whereas the Central Government is satisfied that it is necessary and expedient in the public interest to make an exemption in respect of surtax in favour of foreign companies with whom the Central Government has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facilities or for supply of ship, aircraft, machinery and plant, as may be, all of which were to be used in connection with the prospecting or extraction or production of mineral oils. Such agreements do not contemplate a direct association or participation of the ONGC (a person authorized by the Central Government by notification dated 2.8.1989) in the prospecting or extraction or production of mineral oils but involved the taking of services and facilities or use of plant or machinery which is connected with the business of prospecting or extraction or production of mineral oils. 6. In the above situation, the primary authority took the view that the agreements executed by the ONGC with the foreign companies being for services to be rendered and such agreements not being for association or participation in the prospecting or extraction or production of mineral oils, would not be covered by the exemption notification in question which by its very language granted exemption only to foreign companies with whom there were agreements for participation by the Central Government or the person authorized in the business of prospecting, extraction or production of mineral oils. The ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strength of separate agreements with the foreign companies with whom the ONGC has executed an agreement as contemplated in Sub-section 2(a) of Section 24-AA of the Surtax Act. 10. Shri Guru Krishna Kumar, learned senior counsel appearing for the Revenue, has countered the arguments advanced on behalf of the appellants by contending that the relevant provisions of the Surtax Act i.e. Section 24-AA and the exemption notification must be construed by its plain and unambiguous language which indicate two separate situations in respect of which power to grant exemption is conferred by section 24-AA. It is contended that though the Central Government has also been empowered to grant exemptions in respect of the situations covered by sub-section 2(b), namely, where only services are provided, yet, the Central Government while issuing the exemption notification dated 31.3.1983 had clearly chosen to grant exemption in respect of situation covered by sub-section 2(a) of Section 24-AA, alone, namely, in respect of agreements with foreign companies resulting in direct association or participation of the Central Government or the authorized person in the business of prospecting or extractio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elephant. In other words, the literal rule of interpretation simply means that we mean what we say and we say what we mean. If we do not follow the literal rule of interpretation, social life will become impossible, and we will not understand each other. If we say that a certain object is a book, then we mean it is a book. If we say it is a book, but we mean it is a horse, table or an elephant, then we will not be able to communicate with each other. Life will become impossible. Hence, the meaning of the literal rule of interpretation is simply that we mean what we say and we say what we mean. 31. Thus, the language of a taxing statute should ordinarily be read and understood in the sense in which it is harmonious with the object of the statute to effectuate the legislative animation. A taxing statute should be strictly construed; common sense approach, equity, logic, ethics and morality have no role to play. Nothing is to be read in, nothing is to be implied; one can only look fairly at the language used and nothing more and nothing less. (J. Srinivasa Rao v. State of A.P. and Jagdambika Pratap Narain Singh v. CBDT.) Specifically, insofar as an exemption notification i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In other words, the power to grant exemption is two-fold and covers agreements directly associated with the prospecting or extraction or production of mineral oils or contracts facilitating or making available services in connection with such a business. There is nothing in the provisions of the Act which could have debarred the Central Government from granting exemptions to both categories of foreign companies mentioned above or to confine the grant of exemption to any one or a specified category of foreign companies. Reading the notification No.GSR 307(E) dated 31.3.1983 it clearly appears that the exemption has been granted only to foreign companies with whom the Central Government had executed agreements for direct association or participation by the Central Government or the persons authorized by it (ONGC) in the prospecting or extraction or production of mineral oils. In other words, the exemption notification confines or restricts the scope of the exemption to only one category of foreign companies which has been specifically enumerated in sub-section 2(a) of Section 24-AA of the Surtax Act. The second category of foreign companies that may be providing services as enumera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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