OIL & NATURAL GAS CORPORATION LIMITED versus COMMISSIONER OF INCOME TAX &ANR.

Citation: [2015] 9 S.C.R. 992 · Decided: 01-07-2015 · Supreme Court of India · Bench: RANJAN GOGOI · Disposal: Dismissed

Judgment (excerpt)

[2015] 9 S.C.R. 992 
A 
OIL & NATURAL GAS CORPORATION LIMITED 
v. 
COMMISSIONER OF INCOME TAX &ANR. 
B 
(Civil Appeal No. 730 of 2007) 
JULY01, 2015 
[RANJAN GOGOi AND PINAKI CHANDRA GHOSE, JJ.] 
Companies (Profits) Surtax Act, 1964-s. 24AA(2)(a) 
c and (2)(b) - Exemption Notification No. GSR 307(E) dated 
31.3.1983 issued uls. 24AA -
Whether the appellant-
assessee covered within the purview of the Notification- Held: 
s. 24AA grants power to Central Government either to grant 
exemption to both categories of foreign companies 
D enumerated in sub-section (2)(a) or (2)(b) or to any one of 
specified category - Exemption Notification has granted 
exemption only to the category of foreign companies 
enumerated in sub-section (2)(a) and has specifically omitted 
the category enumerated ins. (2)(b)- Thus, when the Central 
' 
I 
E Government has consciously chosen to grant exemption to 
one category, the scope of the grant cannot be enhanced or 
expanded - The appellants-assesses not entitled to the 
exemption under the Notification, as they fall in the category 
F 
enumerated in sub-section (2)(b) of s. 24AA. 
Dismissing the appeals, the Court 
HELD: 1. The power to grant exemption u/s. 24-
AA of the Companies (Profits) Surtax Act, 1964, is two-
G fold and covers agreements directly associated with the 
prospecting or extraction or production of mineral oils 
or contracts facilitating or making available services in 
connection with such a business. There is nothing in 
the provisions of the Act which could have debarred the 
H Central Government from granting exemptions to both 
992 
OIL & NATURAL GAS CORPORATION LIMITED v. 
993 
COMMISSIONER OF INCOME TAX 
categories of foreign companies mentioned above or to A 
confine the grant of exemption to any one or a specified 
category offoreign companies. [Para 12] [1004-H; 1005• 
A-B] 
2. On reading the Notification No.GSR 307(E) s 
dated 31.3.1983, it clearly appears that the exemption has 
been granted only to foreign companies with whom the · 
Central Government had executed agreements for direct 
association or participation by the Central Government 
or the persons authorized by the appellant in the · C 
prospecting or extraction or production of mineral oils. 
Thus, the exemption notification confines.or restricts the 
scope of the exemption to only one category of foreign 
companies which has been specifically enumerated in 
sub-section 2(a) of Section 24-AA of the Surtax Act. The D 
second category of foreign companies that may be 
providing services as enumerated in sub-section 2(b) of 
Section 24-AA is specifically omitted in the exemption 
notification. The power under Section 24-AA of the Surtax 
Act, is wide enough to include even this category of E 
foreign companies. The omission of this particular 
category of foreign companies in the exemption 
notification, notwithstanding the wide amplitude and 
availability of the power under Section 24-AA, clearly F 
reflects a conscious decision on the part of the Central 
Government to confine the scope of the exemption 
notification to only those foreign companies that are 
enumerated in and covered by sub-section 2(a) of 
Section 24-AAofthe Surtax Act. [Para 12] [1005-C-G] 
G 
3. The explanatory notes on the provisions of 
Finance Act, 1981 [Paragraph 11(4) and 26(1)] clearly 
goes to show that the legislative intent behind inclusion 
of Section 24-AA is to encourage foreign companies to H 
enter into participating contracts with the Union 
994 
SUPREME COURT REPORTS 
[2015) 9 S.C.R. 
A Government in the business of oil exploration or 
production. The further legislative intent was to seek 
greater participation of foreign companies in the matter 
of providing services including supply of ships, aircrafts, 
machinery or plant in connection with business of 
B extraction or p.roduction of mineral oils. The aforesaid 
l~gislative intent which is two-fold is manifested by the 
two limbs of sub-section 2 of Section 24AA of the Surtax 
Act to which the power of exemption was intended to 
operate i.e. sub-section 2(a) and 2(b) of Section 24AA. If 
C out of the two limbs where the power of exemption was 
intended to operate, the repository of the power i.e. 
Central Government, had consciously chosen to grant 
exemption in one particular field i.e. foreign companies 
0 
covered by sub-section 2(a) of Section 24-AA, the scope 
of the grant cannot be enhanced or expanded. by a 
judicial pronouncement. [Para 13] [1005-H; 100

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