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TMI Blog2022 (9) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.1 of the EPCG scheme. Item 9 refers to capital goods brought or caused to be brought or delivered into a local area by or (to) units covered under Export Promotion Capital Goods Scheme. Therefore, it would not be appropriate to read into item 9 any coverage to all the goods or capital goods referred to or mentioned in clause 5.1 of the EPCG scheme. The expression capital goods referred to in item 9 of the notification dated 19.05.2003 has neither been defined under the said notification nor the Entry Tax Act, 2000. However, Section 2(B) of the Entry Tax Act, before its amendment in 2013, provides that the words and expressions used in the said Act but not defined shall have the meaning as assigned to in the Goa Sales Tax Act, 1963. After that, in the year 2013, for the expression Goa Sales Tax Act, 1964 (Act 4 of 1964), the expression the Goa Value Added Tax Act, 2005 (Goa Act 9 of 2005) was substituted. Based on the provisions of the Goa Act and the Central Act, therefore, there was nothing wrong with the Respondents referring to the definition of capital goods in Section 2(f) of the Goa Value Added Tax Act, 2005, given explicit provision in Section 2(B) of the Entry Tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The Petitioners, by instituting the present petition, challenge the order dated 05.01.2006 made by the Commissioner of Commercial Taxes (R-2) confirming the communication/decision dated 11.08.2005 made by R-3, declining the tax concession for imported goods under item 9 of exemption notification No.5/11/2002 dated 19.05.2003 issued under Section 25(1) of the Goa Tax on Entry of Goods Act, 2000 (Entry Tax Act). 3. The Petitioners amended this petition, among other things seeking a declaration that the State and its authorities were not competent to levy entry tax on imported goods. The Petitioners also sought a refund of entry tax paid by them under protest regarding imported goods under item 9 of the notification dated 19.05.2003 referred above. 4. Mr Usgaonkar, however, made it clear that the Petitioners were not pressing the contention about the competence of the State and its authorities to levy entry tax on imported goods given the decision of the Hon'ble Supreme Court in the State of Kerala and others Vs Fr. William Fernandez and others (2021) 11 SCC 705. In this case, the Hon'ble Supreme Court has held that the import of goods from any territory outside I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n terms of the notification dated 19.05.2003 issued by the State Government under Section 25(1) of the Entry Tax Act. 9. Respondent No.3 vide impugned order dated 11.08.2005 declined the benefit of the concessional rate as prescribed in item 9 of the notification dated 19.05.2003. The Petitioners, therefore, wrote to Respondent No.2 seeking such benefit. However, even Respondent No.2 vide impugned order dated 05.01.2006 only endorsed the order dated 11.08.2005. Hence, the present petition. 10. Mr Usgaonkar submitted that item 9 of the notification dated 19.05.2003 refers to the Export Promotion Capital Goods (EPCG) Scheme in express terms. This scheme refers explicitly to the import of motor cars by hotels. Based on this, he submits that the Petitioners are entitled to the benefit of concessional rates under notification dated 19.05.2003. 11. Mr Usgaonkar submits that the Respondents exceeded their jurisdiction by referring to the definition of capital goods under Section 2(f) of the Goa Value Added Tax Act, 2005. He submits that the provisions of the 2005 Act were not at all applicable. In any case, the definition clause specifies that the definition would apply unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be entirely read, not piecemeal. He submitted that the exemption notification should not be liberally construed even otherwise. He relied on Krishi Upaj Mandi Samiti, New Mandi Yard, Alwar Vs Commissioner of Central Excise and Service Tax, Alwar (2022) 5 SCC 62 , to support this contention. 17. The learned Advocate General finally submitted that the authorities were entitled to refer to the definition of 'capital goods' in Section 2(f) of the VAT Act, 2005, given the provisions in Section 2(B) of the Entry Tax Act. He also referred to the requirements of the Goa, Daman and Diu General Clauses Act, 1965, read with Section 8 of the General Clauses Act, 1897, in support of this contention. 18. Based on the above contention, the learned Advocate General submitted that this petition may be dismissed with costs. 19. The rival contentions now fall for our determination. 20. The primary issue in this petition is the interpretation of the exemption notification dated 19.05.2003, which entitles an importer to pay entry tax at reduced rates prescribed therein. The State Government has issued this notification under Section 25(1) of the Entry Tax Act, which empowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on should be construed liberally. Therefore, in the context of exemption notification, there is no new room for intendment. Regard must be to the clear meaning of the words. Claim to exemption is governed wholly by the notification's language, which means by plain terms of the exemption clause. An assessee cannot claim the benefit of the exemption on the principle that in case of ambiguity, a taxing statute must be construed in his favour, for an exception or exemption provision must be construed strictly. 26. In Giridhar G. Yadalam v. CWT (2015) 17 SCC 664, the Hon'ble Supreme Court has held that in a taxing statute, it is the plain language of the provision that has to be preferred where language is plain and is capable of one definite meaning. It is further held that the strict interpretation of the exemption provision is to be accorded. The purposive interpretation can be given only when there is some ambiguity in the language of the statutory provision, or if it leads to absurd results. 27. In Krishi Upaj Mandi Samiti (supra), the Hon'ble Supreme Court has held that it is settled law that the notification has to be read as a whole. If any of the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns subject to which exemption is applicable (1) (2) (3) (4) 1 ......... ...... .......... 2 ......... ...... .......... 3 ......... ...... .......... 4 ......... ...... .......... 5 ......... ....... .......... 6 ......... ........ ......... 7 ......... ........ ......... 8 ......... ........ ......... 9 The capital goods brought or caused to be brought or delivered into a local area by (to) units covered under Export Promotion Capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal rate of entry tax applies subject to conditions prescribed in column 4, i.e. production of a certificate from the competent authority under the 32. Item 9 of the notification dated 19.05.2003 significantly does not refer to all the goods or all the capital goods mentioned in clause 5.1 of the EPCG scheme. Item 9 refers to capital goods brought or caused to be brought or delivered into a local area by or (to) units covered under Export Promotion Capital Goods Scheme . Therefore, it would not be appropriate to read into item 9 any coverage to all the goods or capital goods referred to or mentioned in clause 5.1 of the EPCG scheme. Furthermore, considering the provisions of Section 25(1) of the Entry Tax Act, we agree with the learned Advocate General that the State was competent, in public interest to decide which of the capital goods deserve a concession or reduced rate of entry tax. There is no question of any discrimination involved in such matters. 33. The expression capital goods referred to in item 9 of the notification dated 19.05.2003 has neither been defined under the said notification nor the Entry Tax Act, 2000. However, Section 2(B) of the Entry Tax Act, be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidering the context, collocation and object of the words used in exemption notification and provisions of the Goa Value Added Tax Act, 2005, it is quite clear that the expression capital goods cannot be stretched to include all the goods mentioned or referred to in the EPCG scheme irrespective of whether they are capital goods or not. Therefore, even applying the principle explained by the Hon'ble Supreme Court in Vanguard Fire and General Insurance Co. Ltd. (supra), there is no scope for expanding the definition of capital goods in the present case. 38. As explained by the Hon'ble Supreme Court, when interpreting an exemption notification whose wordings are clear and unambiguous, there is no scope for stretching the words of the notification or adding some words to such notification. The exemption notification, particularly when determining eligibility, must be strictly construed. Even the issue of purposive interpretation will arise only when there is some ambiguity or where there is a possibility of a particular interpretation leading to absurd results. No such issue arises in the present case. 39. Thus, there is no illegality in the impugned orders dated 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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