The Apex Court observed that 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.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is one of harmonious construction whereby the general law, to the extent dealt with by the special law, is impliedly repealed.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.
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.
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.
Page 1
2
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
27.05.1997.
It
its
is
respondent-assessee
commercial
also
has
production
not disputed
fixed capital
that
on
the
investment
(for short, “the FCI”) exceeding Rs.500/- Crores
and employs more than 250 employees.
3.The
core
assessee’s
issue
arises
application
out
for
of
the
grant
respondent-
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
facts
in
the
proceed
instant
towards
case.
analysis
The
of
Scheme
the
for
Page 2
3
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
manufactured
tax
by
on
them
the
within
sale
the
of
goods
State.
It
specifies and categorizes the districts, types of
units,
the
extent
percentage),
the
of
exemption
maximum
from
exemption
tax
(in
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
issuing
notification
notification
Gr.IV/87-38,
dated
operative/effective
and
to
remain
in
–
S.
was
No.763:
06.07.1989
with
force
brought
effect
upto
in
by
F.4(35) FD/
and was made
from 05.03.1987
31.03.1995.
Yet
Page 3
4
another
amendment
Government
by
was
introduced
issuing
by
the
notification
State
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
Government
force
has
upto
31.03.1997.
issued
another
The
State
subsequent
notification amending the earlier notification in
exercise of its power under Section 4(2) of the
Act
in
763:
06.07.1989
operation
F.4(35)FD/Gr.IV/87-38,
which
with
is
deemed
effect
from
to
have
dated
come
05.03.1987
into
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
Industrial
of
Unit”,
the
expressions
“Sick
like
“New
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
industrial
of
New
units
Industrial
established
Unit.
by
They
are
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’.
Page 5
6
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
for
and
plant
installation
and
expenditure
machinery
capitalized for plant
and
capitalized
installation
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
approved
by
or
Government
foreign
of
India
suppliers
or
paid
as
to
laboratories recognized by the State Government or
Central
stock,
Government
racks
and
and
railway
Rail
Sidings,
engines,
rolling
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
Page 6
7
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.
speaks
of
a
‘New
The first part
Industrial
Unit’
first
established in any Panchayat Samiti of the State.
The establishment is of the unit during the period
of the Scheme.
must
exceed
The investment in fixed capital
Rs.10/-
crores
and
lastly
the
industrial unit has minimum permanent employment
of 250 persons. In the second limb, the necessity
of
establishing
Panchayat
Samiti
the
is
‘New
done
Industrial
away
with.
Unit’
The
in
unit
should have capital investment exceeding Rs.25/-
Page 7
8
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
industrial
unit
Unit”
means
established
a
in
new
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
financial
as
appraised
the
shall
institutions
by 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
proportionate
of
claiming
benefits
enhanced
under
this
Scheme”.
Page 8
9
11. The
‘Very
industrial
Prestigious
unit
Unit’
established
means
in
any
a
new
Panchayat
Samiti in the State during the operative period of
the Scheme and the other important requirement is
the
investment
in
such
industrial
Rs.100/- crores or more.
unit
must
be
The second limb of the
definition clause provides for a new industrial
unit
to
Unit.
acquire
The
the
status
project
cost
financial institution
investment made
by
a
of
as
Prestigious
appraised
shall
new
Very
be
by
considered
unit.
The
the
as
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
Screening
2(k)
provides
Committee
for
for
constitution
the
purpose
of
of
Page 9
10
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
applicability of the Scheme.
speaks
of
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
mentioned
of
in
Sales
Tax
Annexure
as
‘C’
per
to
parameters
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
No.
Type of Units
Extent of
the
percentage
of exemption
from tax
Maximum
exemption
in terms of
percentage
of
fixed
capital
Maximum
time limit
for
availing
exemption
from tax
Page 11
12
1. New Units 75% of total
(Other than tax
the units liability
mentioned at
items 1A to
1F)
1A. Leather based 90% of total
New Unit tax
liability
1B. New Units in 90% of total
Ceramic, tax
Glass, liability
Electronics for first
and three years,
Telecommuni- 80% for next
cations three years
industry and 75% for
having a FCI the
between Rs.5 remaining
crores and period.
Rs.25 crores
New Units in
Ceramic,
Glass,
Electronics,
and
Telecommuni-
cations
industry
having a FCI
of Rs.25
crores or
more
New labour
1C.
1D
investment
(FCI)
100% of FCI
in case of
medium and
large scale
units and
125% of FCI
in case of
small scale
units
100% of FCI
in case of
medium and
large scale
units and
125% of FCI
in case of
SSI units
100% of FCI
100% of
100% of FCI
total tax
liability
for the
first four
years, 90%
for the next
four years
and 75% for
the
remaining
period.
75% of total 145% of FCI
Seven
years
Seven
years
Nine
years.
Eleven
years.
Seven
Page 12
13
intensive
units as
defined in
the Capital
Investment
Subsidy
Scheme, 1990
1E.
1F.
2.
2A.
tax
liability
New Cement 75%, 50% &
units except 25% of total
in Tribal tax
Sub-Plan liability in
area. case of
small,
medium and
large scale
units
respectively
Large
scale
granite
and
marble units.
Units (Other
than (a)
cement unit
except in
Tribal Sub-
Plan area and
(b) large
scale granite
and marble
units going
in for
expansion or
diversificati
on.
Leather based
units going
in for
expansion or
diversificat-
25% of total
tax
liability
75% of total
tax
liability
75% of total
tax
liability
in case of
SSI units
and 120% of
FCI in case
of medium
and large
scale
units.
125% of FCI
in case of
small scale
units
subject to
an overall
limit of
Rs.1.00
crore and
100% of FCI
in case of
medium and
large scale
units.
100% of FCI
years.
Seven
years.
Seven
years.
100%
of Seven
additional
years
FCI
100%
of Seven
additional
years
FCI
Page 13
14
3.
4.
5.
6.
7.
ion
Sick Units
50% of total
tax
liability
New Units
producing
pollution
control
equipments/
Pioneering
units/
Prestigious
units.
New Very
Prestigious
units (Other
than cement
units except
in Tribal
Sub-plan
Area)
100% Export
Oriented
Prestigious/
Pioneering
units
100% Export
Oriented Very
Prestigious
Units
100% of FCI Seven
in case of years
medium and
large scale
units &
125% of FCI
in case of
small scale
units.
100% of FCI
90% of total 100% of FCI Eleven
tax years
liability
100% of 100% of FCI Nine years
total tax
liability
100% of 100% of FCI Eleven
total tax years
liability
75% of total
tax
liability
Nine years
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
Page 14
15
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
primarily
dated
confined
13.12.1996,
to
‘New
Annexure
was
After
Units’.
‘C’ 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
percentage
is large
scale
of exemption
unit,
from
tax
the
is
extent
25%.
of
The
maximum time limit for availing exemption from tax
is restricted to seven years. Item 4 speaks of New
Page 15
16
Units
producing
pioneering
pollution
units
and
control
prestigious
equipments,
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
entitled
held
to
that
75%
respondent-unit
the
tax
as
respondent-assessee
exemption
Prestigious
by
Unit
is
holding the
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
Board
revenue
by
and
holding
upheld
that
the
the
decision
of
respondent-unit
the
is
a
Prestigious Unit and therefore, entitled to 75%
tax exemption under the Scheme.
Page 17
18
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
beginning
of
respondent-unit
filing
the
right
application
from the
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
Page 18
19
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
adopted
below
the
investment
stand
that
excluding
05.03.1987
therefore
including
was
the
more
the
High
the
fixed
investment
than
is
before
crores
a
had
capital
made
Rs.532/-
respondent-unit
Court
and
Prestigious
Unit entitled to an exemption of 75% of total tax
liability.
It
respondent-new
is further
unit being
contended
New
Cement
that the
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.
benefit cement
to
He
would
industry
further
is
submit
confined
to
that
the
extent envisaged under the Item 1E of Annexure-C
Page 19
20
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
Alternatively,
it
to
is
new
cement
contended
unit.
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
reached
by
the
the
reasoning
High
Court
and
while
the
conclusion
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
envisaging
if
it
better
falls
under
incentives.
He
another
would
Item
further
submit that since new cement unit is specifically
excluded
from
generally),
application
Item
(new units
(expanding/diversifying
2
of
Item
1
unit)
and Item 5 (very prestigious unit) but not
4
(prestigious
units),
prestigious/pioneering
Item
(export
and
unit)
6 Item
Item
oriented
7
(export
oriented very prestigious units), it falls that
the
intention
such
that
behind
but
for
such
the
express
said
exclusion
exclusion,
is
cement
industries would be included in the said entries.
He
would
strenuously
exemption
clauses
submit
are
made
that
since
with
a
the
tax
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.
Page 21
22
24. The facts which are not in dispute are that the
respondent-assessee
‘the
Company’)
within
(hereinafter
established
Panchayat
Samiti,
a
referred
new
Pindwara
to
cement
and
as
unit
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
eligible
Scheme.
for
On
Lakhs
availing
the
(Rs.55.32
the
aforesaid
crores)
benefits
basis
the
as FCI
under the
State
Level
Screening Committee certified that the company is
entitled to avail exemption of tax to the extent
Page 22
23
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
“Prestigious
New
is
a
Unit”
‘Large Scale
and also
Unit’,
a
a
“Very
Prestigious Unit”; (b) the classification of a new
Page 23
24
unit, viz.
small
scale under
scale, 1E
item
medium
the
on
scale
basis
and
of
large
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
expressions
other
in
Notification,
used,
special
one
in
words,
there
General
under
Terms
the
are
two
and the
rules of
interpretation, it has to be understood that the
Page 24
25
special words were not meant to be included in the
general expression.
that
where
a
Alternatively, it can be said
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
construction
applied
whereby
is
the
one
general
of
harmonious
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
th
Interpretation of Statutes, 8
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.
construing
Statutes
a
§
general
482
and
states
a
that
specific
when
statute
pertaining to the same topic, it is necessary to
consider
another
the
and
harmonized,
statutes
such
if
as
statutes
possible,
consistent with one
therefore should be
objective of
with
the
giving effect to a consistent legislative policy.
On the other hand, where a general statute and a
specific
statute
relating
to
the
same
subject
Page 27
28
matter
cannot
specific
be
statute
reconciled,
ordinarily
the
will
special
or
control.
The
provision more specifically directed to the matter
at
issue
prevails
qualification
of
the
as
an
exception
provision
which
to
or
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,
Penitentiary v. Marrero, 417 U.S. 653)
31.
Lewisburg
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
Page 28
29
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
applicability
of
Act
the
did
Fatal
not
exclude
Accidents
Act
the
and
therefore, the Admiralty Court had no jurisdiction
to entertain a claim for damages for loss of life.
Page 29
30
33. The
adoption
application
construction
while
of
has
expressing
majority
judgment
of
the
aforesaid
principle
been
his
in
explained
partial
St.
of
by
rule
harmonious
Kasliwal
dissent
Stephen’s
in
to
J.
the
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.”
Page 30
31
(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
Page 31
32
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
Page 32
33
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
ordinary
simple
usage".
Interpretation, 5th
ed.
common
sense
and
Bennion, Statutory
(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
Wilberforce
of
communication
observed
generally.
in Associated
As
Lord
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.
Page 33
34
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
apparent
has
conflict
provisions
prevail.
(1989)
3
observed
of
In
SCC
aforesaid
between
law,
CCE
rule
the
v.
343
that
as
Oil
Court
“the
there
two
special
Jayant
this
when
is
independent
provision
Mills
has
an
(P)
must
Ltd.,
accepted
basic
the
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
Page 34
35
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:
Page 35
36
“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:
Page 36
37
“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
Page 37
38
intention very clearly. Each enactment
must be construed in that respect
according to its own subject-matter and
its own terms.”
39. In
Ashoka
Bank,
(1990)
reliance
upon
Marketing
4
SCC
Ltd.
406
Bennion,
v.
this
Punjab
Court
Statutory
National
has
placed
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
Page 38
39
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
Board, can
it
provision
service
only
which
of
be
must
the
employees
regarded
yield
to
as
a
the
of
the
general
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
passing
provision
a
special
is
Act,
this:
In
Parliament
devotes its entire consideration to
a particular subject. When a general
Act
is
logical
subsequently
to
presume
passed,
that
it
is
Parliament
Page 39
40
has
not
repealed
or
modified
the
former Special Act unless it appears
that the Special Act again received
consideration from Parliament. Vide
London
and
Limehouse
Blackwall
District
Railway
Board
of
v.
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
legislature
treatment
be
had
made
to
intended
vis-à-vis
the
ascertain
to
accord
general
whether
a
entries
the
special
and
a
further endeavour will have to be made to find out
Page 40
41
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
This
rule
that
is
point
in
particularly
the
other
applicable
direction.
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.
Page 41
42
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
eligible
it
into
industries.
Annexure-C
It
amongst
classified
the
the
cement
units for eligibility of tax exemption into three
categories:
categories
small,
are
medium
and
comprehensive
large.
whereby
The
said
small
and
medium cement units have been prescribed to have
maximum FCIs of Rs.60/- lakhs and Rs.5/- crores,
respectively
Rs.5/-
and
crores.
large
The
to
be
maximum
over
the
ceiling
FCI
for
of
large
cement units has been purposefully left open and
thereby reflects that the intention clearly is to
provide
cement
for
units
determination
applicability
an
all-inclusive
so
of
to
as
to
provision
avoid
appropriate
new
cement
any
for
new
ambiguity
provision
units
to
in
for
seek
exemption.
44. It leaves no doubt that what is specific has to
be
seen
in
contradistinction
items/entries.
The
provision
with
more
the
other
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
Company
that
beneficial
to
put
the
the
forth
by
construction
assessee
must
the
respondent-
which
be
is
applied
most
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
intention
benefit
speaks
of
to
the
volumes
in
legislature
cement
industries
as
of
restrict
to
respect the
available
only
under Item 1E, which categorically classified them
into three as per their FCI. The specific entries
being
mutually
exclusive
systematically
arranged
have
and
been
placed
classified
in
so
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
exclude new industries,
the
otherwise
fall
interpretation
cement
into
would
its
be
now
specifically
which could
lest such
ambit,
not
ab
absurdo
(i.e.,
interpretation avoiding absurd results).
46. Therefore,
in
respondent-Company
our
would
considered
only
be
view
eligible
the
for
grant of exemption under Item 1E as a large new
Page 44
45
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.
Print Page
(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 and Maxwell; Justice G.P. Singh, Principles of Statutory Interpretation, 13th Ed., Lexis Nexis; Craies on Legislation, Daniel Greenberg, 9th Ed., Thomson Sweet and 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.
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.
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.
Page 1
2
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
27.05.1997.
It
its
is
respondent-assessee
commercial
also
has
production
not disputed
fixed capital
that
on
the
investment
(for short, “the FCI”) exceeding Rs.500/- Crores
and employs more than 250 employees.
3.The
core
assessee’s
issue
arises
application
out
for
of
the
grant
respondent-
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
facts
in
the
proceed
instant
towards
case.
analysis
The
of
Scheme
the
for
Page 2
3
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
manufactured
tax
by
on
them
the
within
sale
the
of
goods
State.
It
specifies and categorizes the districts, types of
units,
the
extent
percentage),
the
of
exemption
maximum
from
exemption
tax
(in
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
issuing
notification
notification
Gr.IV/87-38,
dated
operative/effective
and
to
remain
in
–
S.
was
No.763:
06.07.1989
with
force
brought
effect
upto
in
by
F.4(35) FD/
and was made
from 05.03.1987
31.03.1995.
Yet
Page 3
4
another
amendment
Government
by
was
introduced
issuing
by
the
notification
State
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
Government
force
has
upto
31.03.1997.
issued
another
The
State
subsequent
notification amending the earlier notification in
exercise of its power under Section 4(2) of the
Act
in
763:
06.07.1989
operation
F.4(35)FD/Gr.IV/87-38,
which
with
is
deemed
effect
from
to
have
dated
come
05.03.1987
into
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
Industrial
of
Unit”,
the
expressions
“Sick
like
“New
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
industrial
of
New
units
Industrial
established
Unit.
by
They
are
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’.
Page 5
6
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
for
and
plant
installation
and
expenditure
machinery
capitalized for plant
and
capitalized
installation
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
approved
by
or
Government
foreign
of
India
suppliers
or
paid
as
to
laboratories recognized by the State Government or
Central
stock,
Government
racks
and
and
railway
Rail
Sidings,
engines,
rolling
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
Page 6
7
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.
speaks
of
a
‘New
The first part
Industrial
Unit’
first
established in any Panchayat Samiti of the State.
The establishment is of the unit during the period
of the Scheme.
must
exceed
The investment in fixed capital
Rs.10/-
crores
and
lastly
the
industrial unit has minimum permanent employment
of 250 persons. In the second limb, the necessity
of
establishing
Panchayat
Samiti
the
is
‘New
done
Industrial
away
with.
Unit’
The
in
unit
should have capital investment exceeding Rs.25/-
Page 7
8
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
industrial
unit
Unit”
means
established
a
in
new
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
financial
as
appraised
the
shall
institutions
by 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
proportionate
of
claiming
benefits
enhanced
under
this
Scheme”.
Page 8
9
11. The
‘Very
industrial
Prestigious
unit
Unit’
established
means
in
any
a
new
Panchayat
Samiti in the State during the operative period of
the Scheme and the other important requirement is
the
investment
in
such
industrial
Rs.100/- crores or more.
unit
must
be
The second limb of the
definition clause provides for a new industrial
unit
to
Unit.
acquire
The
the
status
project
cost
financial institution
investment made
by
a
of
as
Prestigious
appraised
shall
new
Very
be
by
considered
unit.
The
the
as
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
Screening
2(k)
provides
Committee
for
for
constitution
the
purpose
of
of
Page 9
10
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
applicability of the Scheme.
speaks
of
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
mentioned
of
in
Sales
Tax
Annexure
as
‘C’
per
to
parameters
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
No.
Type of Units
Extent of
the
percentage
of exemption
from tax
Maximum
exemption
in terms of
percentage
of
fixed
capital
Maximum
time limit
for
availing
exemption
from tax
Page 11
12
1. New Units 75% of total
(Other than tax
the units liability
mentioned at
items 1A to
1F)
1A. Leather based 90% of total
New Unit tax
liability
1B. New Units in 90% of total
Ceramic, tax
Glass, liability
Electronics for first
and three years,
Telecommuni- 80% for next
cations three years
industry and 75% for
having a FCI the
between Rs.5 remaining
crores and period.
Rs.25 crores
New Units in
Ceramic,
Glass,
Electronics,
and
Telecommuni-
cations
industry
having a FCI
of Rs.25
crores or
more
New labour
1C.
1D
investment
(FCI)
100% of FCI
in case of
medium and
large scale
units and
125% of FCI
in case of
small scale
units
100% of FCI
in case of
medium and
large scale
units and
125% of FCI
in case of
SSI units
100% of FCI
100% of
100% of FCI
total tax
liability
for the
first four
years, 90%
for the next
four years
and 75% for
the
remaining
period.
75% of total 145% of FCI
Seven
years
Seven
years
Nine
years.
Eleven
years.
Seven
Page 12
13
intensive
units as
defined in
the Capital
Investment
Subsidy
Scheme, 1990
1E.
1F.
2.
2A.
tax
liability
New Cement 75%, 50% &
units except 25% of total
in Tribal tax
Sub-Plan liability in
area. case of
small,
medium and
large scale
units
respectively
Large
scale
granite
and
marble units.
Units (Other
than (a)
cement unit
except in
Tribal Sub-
Plan area and
(b) large
scale granite
and marble
units going
in for
expansion or
diversificati
on.
Leather based
units going
in for
expansion or
diversificat-
25% of total
tax
liability
75% of total
tax
liability
75% of total
tax
liability
in case of
SSI units
and 120% of
FCI in case
of medium
and large
scale
units.
125% of FCI
in case of
small scale
units
subject to
an overall
limit of
Rs.1.00
crore and
100% of FCI
in case of
medium and
large scale
units.
100% of FCI
years.
Seven
years.
Seven
years.
100%
of Seven
additional
years
FCI
100%
of Seven
additional
years
FCI
Page 13
14
3.
4.
5.
6.
7.
ion
Sick Units
50% of total
tax
liability
New Units
producing
pollution
control
equipments/
Pioneering
units/
Prestigious
units.
New Very
Prestigious
units (Other
than cement
units except
in Tribal
Sub-plan
Area)
100% Export
Oriented
Prestigious/
Pioneering
units
100% Export
Oriented Very
Prestigious
Units
100% of FCI Seven
in case of years
medium and
large scale
units &
125% of FCI
in case of
small scale
units.
100% of FCI
90% of total 100% of FCI Eleven
tax years
liability
100% of 100% of FCI Nine years
total tax
liability
100% of 100% of FCI Eleven
total tax years
liability
75% of total
tax
liability
Nine years
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
Page 14
15
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
primarily
dated
confined
13.12.1996,
to
‘New
Annexure
was
After
Units’.
‘C’ 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
percentage
is large
scale
of exemption
unit,
from
tax
the
is
extent
25%.
of
The
maximum time limit for availing exemption from tax
is restricted to seven years. Item 4 speaks of New
Page 15
16
Units
producing
pioneering
pollution
units
and
control
prestigious
equipments,
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
entitled
held
to
that
75%
respondent-unit
the
tax
as
respondent-assessee
exemption
Prestigious
by
Unit
is
holding the
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
Board
revenue
by
and
holding
upheld
that
the
the
decision
of
respondent-unit
the
is
a
Prestigious Unit and therefore, entitled to 75%
tax exemption under the Scheme.
Page 17
18
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
beginning
of
respondent-unit
filing
the
right
application
from the
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
Page 18
19
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
adopted
below
the
investment
stand
that
excluding
05.03.1987
therefore
including
was
the
more
the
High
the
fixed
investment
than
is
before
crores
a
had
capital
made
Rs.532/-
respondent-unit
Court
and
Prestigious
Unit entitled to an exemption of 75% of total tax
liability.
It
respondent-new
is further
unit being
contended
New
Cement
that the
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.
benefit cement
to
He
would
industry
further
is
submit
confined
to
that
the
extent envisaged under the Item 1E of Annexure-C
Page 19
20
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
Alternatively,
it
to
is
new
cement
contended
unit.
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
reached
by
the
the
reasoning
High
Court
and
while
the
conclusion
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
envisaging
if
it
better
falls
under
incentives.
He
another
would
Item
further
submit that since new cement unit is specifically
excluded
from
generally),
application
Item
(new units
(expanding/diversifying
2
of
Item
1
unit)
and Item 5 (very prestigious unit) but not
4
(prestigious
units),
prestigious/pioneering
Item
(export
and
unit)
6 Item
Item
oriented
7
(export
oriented very prestigious units), it falls that
the
intention
such
that
behind
but
for
such
the
express
said
exclusion
exclusion,
is
cement
industries would be included in the said entries.
He
would
strenuously
exemption
clauses
submit
are
made
that
since
with
a
the
tax
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.
Page 21
22
24. The facts which are not in dispute are that the
respondent-assessee
‘the
Company’)
within
(hereinafter
established
Panchayat
Samiti,
a
referred
new
Pindwara
to
cement
and
as
unit
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
eligible
Scheme.
for
On
Lakhs
availing
the
(Rs.55.32
the
aforesaid
crores)
benefits
basis
the
as FCI
under the
State
Level
Screening Committee certified that the company is
entitled to avail exemption of tax to the extent
Page 22
23
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
“Prestigious
New
is
a
Unit”
‘Large Scale
and also
Unit’,
a
a
“Very
Prestigious Unit”; (b) the classification of a new
Page 23
24
unit, viz.
small
scale under
scale, 1E
item
medium
the
on
scale
basis
and
of
large
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
expressions
other
in
Notification,
used,
special
one
in
words,
there
General
under
Terms
the
are
two
and the
rules of
interpretation, it has to be understood that the
Page 24
25
special words were not meant to be included in the
general expression.
that
where
a
Alternatively, it can be said
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
construction
applied
whereby
is
the
one
general
of
harmonious
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
th
Interpretation of Statutes, 8
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.
construing
Statutes
a
§
general
482
and
states
a
that
specific
when
statute
pertaining to the same topic, it is necessary to
consider
another
the
and
harmonized,
statutes
such
if
as
statutes
possible,
consistent with one
therefore should be
objective of
with
the
giving effect to a consistent legislative policy.
On the other hand, where a general statute and a
specific
statute
relating
to
the
same
subject
Page 27
28
matter
cannot
specific
be
statute
reconciled,
ordinarily
the
will
special
or
control.
The
provision more specifically directed to the matter
at
issue
prevails
qualification
of
the
as
an
exception
provision
which
to
or
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,
Penitentiary v. Marrero, 417 U.S. 653)
31.
Lewisburg
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
Page 28
29
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
applicability
of
Act
the
did
Fatal
not
exclude
Accidents
Act
the
and
therefore, the Admiralty Court had no jurisdiction
to entertain a claim for damages for loss of life.
Page 29
30
33. The
adoption
application
construction
while
of
has
expressing
majority
judgment
of
the
aforesaid
principle
been
his
in
explained
partial
St.
of
by
rule
harmonious
Kasliwal
dissent
Stephen’s
in
to
J.
the
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.”
Page 30
31
(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
Page 31
32
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
Page 32
33
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
ordinary
simple
usage".
Interpretation, 5th
ed.
common
sense
and
Bennion, Statutory
(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
Wilberforce
of
communication
observed
generally.
in Associated
As
Lord
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.
Page 33
34
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
apparent
has
conflict
provisions
prevail.
(1989)
3
observed
of
In
SCC
aforesaid
between
law,
CCE
rule
the
v.
343
that
as
Oil
Court
“the
there
two
special
Jayant
this
when
is
independent
provision
Mills
has
an
(P)
must
Ltd.,
accepted
basic
the
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
Page 34
35
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:
Page 35
36
“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:
Page 36
37
“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
Page 37
38
intention very clearly. Each enactment
must be construed in that respect
according to its own subject-matter and
its own terms.”
39. In
Ashoka
Bank,
(1990)
reliance
upon
Marketing
4
SCC
Ltd.
406
Bennion,
v.
this
Punjab
Court
Statutory
National
has
placed
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
Page 38
39
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
Board, can
it
provision
service
only
which
of
be
must
the
employees
regarded
yield
to
as
a
the
of
the
general
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
passing
provision
a
special
is
Act,
this:
In
Parliament
devotes its entire consideration to
a particular subject. When a general
Act
is
logical
subsequently
to
presume
passed,
that
it
is
Parliament
Page 39
40
has
not
repealed
or
modified
the
former Special Act unless it appears
that the Special Act again received
consideration from Parliament. Vide
London
and
Limehouse
Blackwall
District
Railway
Board
of
v.
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
legislature
treatment
be
had
made
to
intended
vis-à-vis
the
ascertain
to
accord
general
whether
a
entries
the
special
and
a
further endeavour will have to be made to find out
Page 40
41
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
This
rule
that
is
point
in
particularly
the
other
applicable
direction.
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.
Page 41
42
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
eligible
it
into
industries.
Annexure-C
It
amongst
classified
the
the
cement
units for eligibility of tax exemption into three
categories:
categories
small,
are
medium
and
comprehensive
large.
whereby
The
said
small
and
medium cement units have been prescribed to have
maximum FCIs of Rs.60/- lakhs and Rs.5/- crores,
respectively
Rs.5/-
and
crores.
large
The
to
be
maximum
over
the
ceiling
FCI
for
of
large
cement units has been purposefully left open and
thereby reflects that the intention clearly is to
provide
cement
for
units
determination
applicability
an
all-inclusive
so
of
to
as
to
provision
avoid
appropriate
new
cement
any
for
new
ambiguity
provision
units
to
in
for
seek
exemption.
44. It leaves no doubt that what is specific has to
be
seen
in
contradistinction
items/entries.
The
provision
with
more
the
other
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
Company
that
beneficial
to
put
the
the
forth
by
construction
assessee
must
the
respondent-
which
be
is
applied
most
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
intention
benefit
speaks
of
to
the
volumes
in
legislature
cement
industries
as
of
restrict
to
respect the
available
only
under Item 1E, which categorically classified them
into three as per their FCI. The specific entries
being
mutually
exclusive
systematically
arranged
have
and
been
placed
classified
in
so
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
exclude new industries,
the
otherwise
fall
interpretation
cement
into
would
its
be
now
specifically
which could
lest such
ambit,
not
ab
absurdo
(i.e.,
interpretation avoiding absurd results).
46. Therefore,
in
respondent-Company
our
would
considered
only
be
view
eligible
the
for
grant of exemption under Item 1E as a large new
Page 44
45
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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