LexM/S. GEM GRANITES versus COMMISSIONER OF INCOME TAX, TAMIL NADU
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
MIS. GEM GRANITES
v.
COMMISSIONER OF INCOME TAX, TAMIL NADU
NOVEMBER 23, 2004
B
[RUMA PAL, ARIJIT PASAYAT AND C.K. THAKKER, JJ.]
Income Tax Act, 1961 : Section 80-HHC.
Income Tax-AY 1987-88-Deduction-ln respect of profits retained
C for export business-Cut and polished granite-Export of-Entitlement to
deduction under S. 80-HHC-Ht!ld : Cut and polished granite is covered
by the word "minerals" occurring in the exclusionary provision of S. 80-
HHC (prior to 1991 amendment)-The 1991 amendment to S. 80-HHC
demonstrates that the words "minerals and ores" must be construed
D widely-Further, subsequent legislation can be looked into to fix the proper
interpretation to be put on the statutory provision as it stood earlier-The
199 r amendment does not suggest that. it would operate retrospectively-
CBDT Circulars of 1984. 1994 and 1995 extend the benefit of S. 80-HHC
to cut and polished granite only w.ef 1-4-1991 by virtue of insertion'·of
Item (X) in Schedule X/l to the Act-The distinction between minerals and
E processed minerals ,drawn by Custom Tariff Act and Central Excise Tariff
Act cannot be imported into the Income Tax Act-Hence, benefit of S. 80-
HHC cannot be granted to the assessee-CBDT Circular No. 1781206183
dt. 27-5-1984.
F
Words & Phrases
"Minerals and ores"-Meaning of-Jn the context of S. 80-HHC(2){b)
of the Income Tax Act, 1961 (prior to 1991 amendment).
The appellant-assessee exported granite, which was cut and polished
G before export and claimed deduction under Section 80-HHC of the
Income Tax Act, 1961 for the AY 1987-88. The High Court disallowed
the deduction. Hence the appeals.
On behalf of the appellant-assessee, it was contended that although
granite was a mineral but when it was cut and polished it ceased to be
H so; that history of Section 80-HHC of the Act would indicate that its
332
r •,
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MIS. GEM GRANITES v. C.I.T., TAMIL NADU
333
object was to develop foreign markets and to earn foreign exchange; A
that with this object a distinction had been made between raw mineral
and processed mineral at all material times; that the CBDT Circular
178/206/83 dated 22-5-1984 stated that the export of cut and polished
diamonds and gems would not amount to export of minerals and ores
and .hence would qualify for relief under Section 80-HHC; that the B ·
position was further clarified by the CBDT Circular in 1995; that the
subsequent legislation could be looked into for the purpose ofinterpreting
an earlier statutory provision; that the amendment made in 1991 was
declaratory and, therefore, would take effect retrospectively; that Section
80-HHC was introduced to give an indirect incentive for the export of
processed products and would, therefore, have to be construed keeping C
in view the context in which the benefit was granted; that the Customs
Tariff Act as well as the Central Excise Tariff Act had drawn a distinction
between minerals per se and articles manufactured out of minerals; and
that processed granites should not be included within the exclusionary
provision of Section 80-HHC(2)(b).
'•
n·
On behalf of the respondent-Revenue, it was contended that the
1984, 1994 and 1995 CBDT Circulars were not applicable to the
assessment years prior to the 1991 amendment of Section 80-HHC; that
the 1984 Circular dealt only with diamonds and not with granite; that
had the intention of the Parliament been to give retrospective effect to
the 1991 amendment, this would have expressly been provided for; and
that there was no reason for giving a restrictive interpretation to the
word 'mineral' occurring in Section 80-HHC(2)(b).
E
Dismissing the appeals of the assessee and allowing the appeal of f
the Revenue, the Court
HELD: 1. It is not the appellant's case that the Central Government
had in fact specified granite or articles of granite for the purpose of granting
benefit under the omitted Section 89-A of the Income Tax Act, which was
subsequently reenacted as Section 80-HHC of the Act. [340-D-E)
2. There are no words of restriction, which qualify the word
'minerals', occurring in Section 80-HHC and, therefore the word must
G
be read to include an kinds of minerals in all its forms i.e. whether
subjected to any process or not as long as it continued to retain the H
334
SUPREME COURT REPORTS [2004] SUPP. 6 S.C.R.
A characteristics of the mineral. To hold that the word 'minerals' never
included processed minerals would require reading wordsExcerpt shown. Read the full judgment & AI analysis in Lexace.