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TMI Blog2022 (12) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... s a settled law that any ambiguity in taxing statute should enure benefit of subject/assessee, but any ambiguity in the exemption clause of exemption notification must be conferred in favour of the revenue. It is clear that the issue in regard to exemption clause is no more res-integra and the Apex Court has settled the question in favour of the revenue, that when there is an ambiguity in exemption notification or exemption clause, the benefit of such ambiguity cannot be extended to the subject/assessee by applying the principal that an obscure and/or ambiguity or doubtful fiscal statute must receive a construction favouring the assessee. Classification - Porridge - The Act does not make any distinction between the normal porridge and instant porridge, and the finding arrived by the Tribunal is a fallacy. The intention of legislature was clear that exemption from tax has to be given to the product Porridge whether it was instant Porridge or normal Porridge i.e. Daliya (cracked wheat). The finding recorded by the Tribunal does not record any substantial finding so as to exclude instant wheat porridge under Entry 36 of Schedule-I of the exempted list of goods, when no di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded Tax Act, 2008 ( hereinafter called as VAT Act ) and the Central Sales Tax Act, 1956 ( hereinafter referred as CST Act ). The dispute in Revision No. 280 of 2022 relates to the Assessment Year 2008-09, in Commercial Tax Revision No. 281 of 2022 for the Assessment Year 2010-11, Revision No. 282 of 2022 for Assessment Year 2009-10, and Revision No. 283 of 2022 relates to Assessment Year 2011- 12. 6. Initially, an assessment was made where no tax was imposed on the product brochure of the applicant, however, in re-assessment proceedings under Section 29(1) of the VAT Act, a tax liability @ 4% was imposed on the brochure sold by the applicant classifying them as printed material covered under Entry No. 100 of Schedule II-A of VAT Act denying the exemption as provided under Entry No. 7 of Schedule-I. Against the order of assessing authority dated 07.01.2014, an appeal under Section 55 of the VAT Act was preferred before the Additional Commissioner (Grade-II) Appeal-III, Ghaziabad which was dismissed on 16.07.2016. Against the order of first appellate authority, a second appeal was preferred before the Commercial Tax Tribunal (Bench-I), Ghaziabad and all the four appeals fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds which are liable to be taxed @ 4%. 12. According to State counsel, the charging Section 7-B of the VAT Act clearly provides that tax shall not be levied on certain sales and purchase of goods mentioned in Schedule-I. Entry 7 provides for exemption of tax on books and periodicals and journals including braille books, maps, charts and globe, work books bearing the name of the author thereon or prescribed in syllabus of any educational Board or Council. 13. Similarly, Schedule-II, Part-A encompasses the name and description of the goods which are to be taxed at 4%, and Entry 100 provides for printed material including diary and calendar. According to him, the brochure which has been printed by the applicant/revisionist comes under the heading printed material and is liable to be taxed @4% and is not entitled to exemption under Schedule-I Entry 7. 14. Sri Tripathi then contended that a taxing statute has to be interprated in the light of what is clearly expressed. It cannot imply anything which is not expressed. According to him these words of the charging provisions are unambiguous and open to true interpretations, the benefit of interpretation of charging provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the notification issued by the State Government in this behalf: PROVIDED that while issuing notification under clause (c), the State Government may impose such conditions and restrictions as may be specified. Schedule-I Entry 7. Books and periodicals journals including Braille books; maps; chart globe; work books bearing the name of author thereon or prescribed in the syllabus of any Educational board or council. Schedule-II Part-A Entry 100. Printed materials including diary and calendar. 20. From the reading of Section 7 of the VAT Act, it is clear that no tax under the Act is to be levied and paid on the turn over of sale and purchase which are mentioned in the said section. From the reading of Section 7(b), it is clear that tax is not levied on the sale or purchase of any goods named or described in Column (2) of Schedule I of the Act. 21. Schedule-I is the list of the exempted goods. Entry 7 has been inserted by the legislature granting benefit to these goods from being exempted from tax. While Part-A of Schedule-II is description of goods which are to be taxed @ 4% and Entry 100 is for the printed material including diary and calendar. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gazines and exercise books. There was no entry to the effect such as printed materials on which the tax was levied, thus, distinguishing between books and printed material. 26. In the present tax regime, Schedule-I and Schedule-II has distinguished between the exemption of goods, and the goods which are to be taxed @ 4%, a clear distinction has been made between the words books and printed material. By no word of imagination the printed information and advertising material can be claused and put into the category of books when there is a specific entry of printed materials imposing a tax liability upon an assessee. 27. The Constitution Bench of the Hon ble Apex Court in Dilip Kumar (supra) had cleared the air in regard to concession/exemption/incentive/rebate/subsidy and have dealt the matter in extenso and held, that in the event of any ambiguity in the exemption notification the benefit of such ambiguity should be construed in favour of the revenue denying the benefit of exemption to the subject/assessee. 28. The Apex Court found that it is a settled law that any ambiguity in taxing statute should enure benefit of subject/assessee, but any ambiguity in the exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom 1955, there appears to be a consistent view that if the words in a taxing statute (not exemption clause) are ambiguous and open to two interpretations, the benefit of interpretation is given to the subject and it does not matter if the taxpayer escapes the tax net on account of the Legislature's failure to express itself clearly [see the passage extracted hereinabove from Kesoram Industries case [State of W.B. v. Kesoram Industries Ltd., (2004) 10 SCC 201] ]. 52. After considering the various authorities, some of which are adverted to above, we are compelled to observe how true it is to say that there exists unsatisfactory state of law in relation to interpretation of exemption clauses. Various Benches which decided the question of interpretation of taxing statute on one hand and exemption notification on the other, have broadly assumed (we are justified to say this) that the position is well settled in the interpretation of a taxing statute : It is the law that any ambiguity in a taxing statute should enure to the benefit of the subject/assessee, but any ambiguity in the exemption clause of exemption notification must be conferred in favour of the Revenue -and suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee by applying the principle that an obscure and/or ambiguity or doubtful fiscal statute must receive a construction favouring the assessee. Both the situations are different and while considering an exemption notification, the distinction cannot be ignored. 29. Thus, from the reading of the above, it is clear that the issue in regard to exemption clause is no more res-integra and the Apex Court has settled the question in favour of the revenue, that when there is an ambiguity in exemption notification or exemption clause, the benefit of such ambiguity cannot be extended to the subject/assessee by applying the principal that an obscure and/or ambiguity or doubtful fiscal statute must receive a construction favouring the assessee. The question of law framed above is thus answered in favour of the revenue and against the assessee. 30. Now coming to the question of law framed in Revision No. 281 of 2022 which was Whether the term Porridge occurring in Entry No. 36 of the Schedule of UP VAT Act excludes instant porridge as the latter sui generis a class of instant food as opposed to natural food. 31. The argument raised from assessee side was that instant wheat p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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