GOVERNMENT OF INDIA AND ORS. versus INDIAN TOBACCO ASSOCIATION

Citation: [2005] SUPP. 2 S.C.R. 859 · Decided: 23-08-2005 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

GOVERNMENT OF INDIA AND ORS. 
v. 
INDIAN TOBACCO ASSOCIA T!ON 
AUGUST 23, 2005 
[S.B. SINHA AND DR. AR. LAKSHMANAN, JJ.] 
Interpretation of Statutes-Effect of the expression "Substitute"-
Government notification introduced an incentive schenie exempting payment 
A 
B 
of additional duty for export and import-Subsequent notification added 
certain places for the purpose of exemption by substituting words in the C 
previous notification-Respondents claimed benefit for the period between 
both the notifications-Retrospective effect not given to the subsequent 
notification and the benefit of exemption was denied-Writ petition filed 
in the High Court against the denial of benefit-Writ petition allowed-
On appeal, Held; an exemption notification must be construed having regard D 
to the object and purport sought to be achieved-"Substitute" ordinarily 
would mean "to put (one) in place of another"; or "to replace"-Neither 
any substantive right was taken away nor any penal consequence was 
imposed by the subsequent notification as only an obvious mistake was 
sought to be removed - An exemption notification should be liberally 
construed when a person is eligible to obtain benefits, therein-The 
subsequent notification could have been said explicitly if it was intended 
to have prospective effect-Where a statute is passedjor the purpose of 
supplying an obvious omission in a former statute, the subsequent statute 
relates back to the time when the prior Act was passed-Customs Tariff 
Act, 1975-Section 3-Words & Phrases. 
. Government of India by its notification dated 7.4.1997 introduced 
an incentive scheme with regard to the export and import in terms of 
the Duty Entitlement Pass Book Scheme (DEPH). The notification ex-
E 
F 
em pied payment of additional duty leviable under Section 3 of the 
Customs Tariff Act with effect from 1.4.1997. However, Guntur was not G 
mentioned in the said notification, which was later added by the noti-
fication dated 27.11.1997, substituting the words of the previous noti-
fication. The respondent made a representation so that the notification 
dated 27.11.1997 covers the period between 7.4.1997 and 27.11.1997, 
which was denied as it was not possible to grant retrospective effect to H 
859 
860 
SUPREME COURT REPORTS [2005] SUPP. 2 S.C.R. 
A the same. The respondent filed a writ petition, questioning the rejection 
of the representation, and the same was allowed. Hence this appeal. 
Appellants contended that the notifications dated 7.4.1997 and 
27.11.1997 providing for exemption from payment of additional custom 
B duty must be strictly construed; and that a subordinate legislation 
containing exemption from payment of duty would only have a prospec-
tive operation. 
Respondents contended that by reason of the import policy for the 
period 1997-2002, the Union oflndia sought to simplify the procedure 
C for grant of exemption basing the same on the quality of goods exported 
on freight on board and as Guntur Railway Station had all along been 
an Inland Container Depot there was no reason as to why the said place 
should have been excluded from the purview of the aforementioned 
notification; that having regard to the representation, the ministry of 
D Commerce, director General of Foreign Trade and the Tobacco Board 
had requested the Ministry of Finance to pass appropriate orders so as 
to enable the exporters of Inland Container Depot, Guntur to avail the. 
facilities or' DEPB Scheme; and that in relation to the exporters of 
embroidered silk garments, made-ups and fabrics, the Government had 
E 
given the benefit with retrospective effect. 
Dismissing the appeal, the Court 
HELD : 1. An exemption notification must be construed having 
regard to the object and purport, which the same seeks to achieve. An 
F 
expression used in a statute should be given its ordinary meaning unless 
it leads to an anomalous or absurd situation. (866-A-Bj 
G 
Commissioner of Central Excise, Chandigarh-I v. Mahan Dairies, 
[2004) 1 l SCC 198; Tata Iron & Steel Co. Ltd. v. State of Jharkhand and 
Others, [2005) 4 SCC 272, relied upon. 
2. The word "substitute" ordinarily would mean, "to put (one) in 
place of another"; or "to replace". No substantive right has been taken 
away nor any penal consequence has been imposed by the amendment as 
only an obvious mistake was sought to be removed thereby. When a person 
H is held to be eligible to obtain the benefits ofan exemption notification, the 
r 
-
GOVERNM

Excerpt shown. Read the full judgment & AI analysis in Lexace.