THE STATE OF MAHARASHTRA versus SHRI VILE PARLE KELVANI MANDAL & ORS. on 7 January 2022

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SUPREME COURT REPORTS

[2022] 1 S.C.R.

THE STATE OF MAHARASHTRA

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v.

SHRI VILE PARLE KELVANI MANDAL & ORS.

(Civil Appeal No. 7319 of 2021)

BJANUARY 07, 2022

[M. R. SHAH AND SANJIV KHANNA, JJ.]

Maharashtra Electricity Duty Act, 2016: s.3(2)(iii) – Exemptionfrom electricity duty under – Entitlement of charitable institutionsrunning the educational institutions – Held: Under 2016 Act,Celectricity duty on the consumption charges or energy consumedfor the purposes of, or in respect of a school or college or institutionimparting education or training, student’s, hostels run by any localbodies shall alone be exempted from levy of electricity duty – TheState Government and the Central Government are also specificallyDexcluded from payment of electricity duty – However, the publicsector undertakings are not exempted from payment of electricityAct – Therefore, under s.3(2) of the 2016 Act, the charitableinstitutions running the educational institutions are not exemptedfrom payment of electricity duty, which as such was specificallyexempted under s.3(2)(iiia) of the 1958 Act – The language andEwords used in s.3(2) are plain and simple and are capable of onlyone definite meaning that there is no exemption provided under the2016 Act from levy of electricity duty so far as the charitableeducation institutions are concerned.

Interpretation of statutes: Where the words are clear andFunambiguous, recourse cannot be had to principles of interpretationother than the literal view – The exemption provision need to beinterpreted literally and when the language used in exemptionprovision is simple, clear and unambiguous, the same has to beapplied rigorously, strictly and literally – Maharashtra ElectricityGDuty Act, 2016 – s.3(2)(iii).

Allowing the appeal, the Court

HELD: 1. As per Section 16 of the 2016 Act, on cominginto force of the 2016 Act, the Maharashtra Electricity Duty Act,1958 stood repealed subject to the eventualities mentioned inH

Section 16 of the 2016 Act. None of the eventuality mentioned inproviso to Section 16 shall be attracted and/or applicable to thefacts of the case on hand in view of the specific provisionsproviding for exemption from payment of the electricity duty asper sub-section (2) of Section 3 of the 2016 Act. Therefore,for the purpose of exemption from payment of electricity dutyon and after 01.09.2016, sub- section (2) of Section 3 of the2016 Act shall have to be applied and shall be applicable.[Para 11.1][178-D-E]

2. As per sub-section (2) of Section 3 of the 1958 Act, theelectricity duty was not leviable on the consumption charges orthe units of energy consumed by or in respect of charitableinstitution registered under the Bombay Public Trusts Act, 1950,for the purpose of, or in respect of, school or college impartingeducation or training in academic or technical subjects (save inrespect of premises used for residential purposes) [Section3(2)(iiia)]. Therefore, under the 1958 Act, the electricity dutywas not leviable on the consumption charges or the units of energyconsumed by or in respect of charitable institutions for thepurpose; in respect of school or college imparting education ortraining in academic or technical subjects. Even as per Section3(2)(ia), electricity duty shall not be leviable on the consumptioncharges or the units of energy consumed by or in a respect of anymunicipal corporation, municipality, municipal committee, towncommittee, notified area committee, Cantonment Board, ZillaParishad or village panchyat constituted under any law for thetime being in force in the State, for the purpose of, or in respectof a school or college imparting education or training in academicor technical subjects, a hospital, nursing home, dispensary, clinic,public street lighting, public water works and system of publicsewers or drains (save in respect of premises used for residentialpurposes. However, there are material changes under the 2016Act. As per Section 3(2) of the 2016 Act, even the publicundertakings are liable to pay the electricity duty. As per Section3(2)(iii), electricity duty is not leviable on the consumptioncharges or energy consumed, for the purposes of, or in respectof a school or college or institution imparting education ortraining, student’s, hostels, hospitals, nursing homes, AB

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Adispensaries, clinics, public streets lighting, public water works,sewerage systems, public gardens including zoos, publicmuseums, administrative offices forming whole or, as the casemay be, a part of system run by any local bodies constituted underany law for the time being in force in the State of Maharashtra.Therefore, Section 3(2)(iiia), which was there in 1958 Act, is nowBconspicuously and deliberately absent in Section 3(2) of the 2016Act. [Paras 11.2, 11.3][178-E-H; 179-A-D]

3. Where the words are clear and unambiguous, recoursecannot be had to principles of interpretation other than the literalview. The exemption provision need to be interpreted literallyCand when the language used in exemption provision is simple,clear and unambiguous, the same has to be applied rigorously,strictly and literally. Under the 2016 Act, charitable educationinstitutions running the schools or colleges are specificallyexcluded from the exemption clause/exemption provision –DSection 3(2). [Para 11.4][179-G-H; 180-A]

4. If the submissions on behalf of the original writpetitioners is accepted that as per Section 3(2)(iii), with respectto all the schools/colleges or institutions, imparting education ortraining, the electricity duty is not leviable, in that case it wouldElead to absurd result. In that case, even the private hospitals,nursing homes, dispensaries and clinics, who are profit makingentities shall also claim the exemption from levy of electricityduty. The intention of the legislature as per Section 3(2) of the2016 Act, is very clear and unambiguous that the electricity dutyshall not be leviable on the consumption charges or energyFconsumed (i) by the State Government excluding the public sectorundertakings; (ii) by the Central Government excluding publicsector undertakings and (iii) run by the local bodies constitutedunder any law for the time being in force in the State ofMaharashtra. Other than the State Government, CentralGGovernment and the local bodies and the Government hostels,no exemption from payment of electricity duty has been provided.[Para 12][180-B-D]

Commr. of Customs v. Dilip Kumar & Co. (2018) 9 SCC1 : [2018] 7 SCR 1191 – followed.

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THE STATE OF MAHARASHTRA v. SHRI VILE PARLE KELVANIMANDAL

Essar Steel India Ltd. & Anr. v. State of Gujarat & Anr.,(2017) 8 SCC 357 : [2017] 4 SCR 767; Novopan IndiaLtd. v. CCE and Customs, 1994 Supp (3) SCC 606 :[1994] 3 Suppl. SCR 549; Hansraj Gordhandas v. H.H.Dave, Assistant Collector of Central Excise Customs,Surat & Ors., AIR 1970 SC 755 : [1969] SCR 253;Star Industries v. Commr. of Customs (Imports) (2016)2 SCC 362 : [2015] 11 SCR 570; Giridhar G. Yadalamv. Commissioner of Wealth Tax & Another (2015) 17SCC 664 : [2015] 15 SCR 543; Godrej & Boyce Mfg.Co. Ltd. v. Deputy Commissioner of Income Tax & Anr.,(2017) 7 SCC 421:[ 2017] 3 SCR 602 – relied on.

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Central Public Information Officer, Supreme Court ofIndia v. Subhash Chandra Agarwal, (2020) 5 SCC 481:[2019] 16 SCR 424; C.W.S. (India) Ltd. v. Commissionerof Income Tax, 1994 Supp (2) SCC 296 : [1994] 2 SCR247; B.R. Enterprises v. State of U.P. & Ors. (1999) 9SCC 700 : [1999] 2 SCR 1111; Byram Pestonji Gariwalav. Union Bank of India & Ors. (1992) 1 SCC 31 : [1991]1 Suppl. SCR 187; Collector of Central Excise,Bombay-I & Anr. v. Parle Exports (P) Ltd., (1989) 1SCC 345 : [1988] 3 Suppl. SCR 933; Union of India& Ors. v. Wood Papers Ltd. & Anr. (1998) 4 SCC 256 –referred to.

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From the Judgment and Order dated 28.02.2019 of the High Courtof Judicature at Bombay in Writ Petition No.2961 of 2018.C

Sachin Patil, Rahul Chitnis, Aaditya A. Pande, Geo Joseph, Advs.for the Appellant.

Shekhar Naphade, Sr. Adv., Gagan Gupta, Mehendra Pratap, Mrs.Manorma Mohanty, Gaurav Kumar, M/s Khaitan & Co., Advs. for theDRespondents.

The Judgment of the Court was delivered by

M. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgmentEand order dated 28.02.2019 passed by the High Court of Judicature atBombay in Writ Petition No.2961 of 2018, by which the High Court hasallowed the said writ petition preferred by respondents No.1 to 10 herein- original writ petitioners (hereinafter referred to as original writpetitioners – education institutions) and held that the original writpetitioners are exempted from payment of electricity duty, the State ofFMaharashtra has preferred the present appeal.

2. That the original writ petitioners are the education institutionsrun and manage by original writ petitioner No.1 – Shri Vile Parle KelvaniMandal, a society registered under the Societies Registration Act, 1860and also a public charitable trust registered under the Maharashtra PublicGTrusts Act, 1950. That the writ petitioners have taken electricityconnections for power supply to their education institutions fromrespective power supply companies. That prior to 01.09.2016, thecharitable education institutions were exempted from payment ofelectricity duty levied on the consumption charges or the energyconsumption for the purposes of or in respect of a school or college orH

institution imparting education or training, students’ hostels, hospitals,nursing homes etc. as per Section 3(2)(iii) of the Maharashtra ElectricityDuty Act, 1958. That in the year 2018, the respective electricity supplycompanies levied the electricity duty pursuant to a letter from theIndustries, Energy and Labour Department, Government of Maharashtrastating that as per Maharashtra Electricity Act, 2016, charitable institutionsregistered under the Bombay Public Trusts Act, 1950 (now known asMaharashtra Public Trusts Act, 1950) for the purpose of or in respect ofschool or college imparting education or training in academic or technicalsubjects are not entitled for electricity duty exemption with effect from1st September, 2016. The respective power supply companies leviedelectricity duty at 21% and the bills were raised accordingly on originalwrit petitioners and their education institutions for the period post01.09.2016. Aggrieved by the levy of electricity duty on the educationalcharitable institutions run by the original writ petitioner No.1 – respondentNo.1 herein, original writ petitioners preferred the writ petition beforethe High Court. By the impugned judgment and order, the Division Benchof the High Court has allowed the said writ petition and has set aside thelevy of electricity duty on writ petitioners and consequently has set asiderespective electricity bills levying the electricity duty on consumption ofelectricity charge.

3. Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court, the State of Maharashtra haspreferred the present appeal.

4. Shri Sachin Patil, learned counsel appearing on behalf of theState has vehemently submitted that in the facts and circumstances ofthe case, the High Court has committed a grave error in holding that theoriginal writ petitioners – charitable education institutions are not liableto pay the electricity duty.

4.1 It is further submitted that in absence of challenge to therelevant provisions of the Maharashtra Electricity Act, 2016, the HighCourt ought not to have allowed the writ petition and ought not to haveset aside the levy of electricity duty levied from charitable educationinstitutions like the original writ petitioners.

4.2 It is further submitted by Shri Sachin Patil, learned counselappearing on behalf of the State that the High Court has not properlyappreciated and considered the relevant provisions pre and post theMaharashtra Electricity Act, 2016.

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A4.3 It is submitted that as per Section 3(2)(a)(iiia) of theMaharashtra Electricity Duty Act, 1958, the charitable intuitions registeredunder the Bombay Public Trusts Act, for the purpose of, or in respect of,school or college, imparting education or training in academic or technicalsubjects (save in respect of premises used for residential purposes) wereexempted from levy of the electricity duty on the consumption chargesBor the units of energy consumed. It is submitted that however, onenactment of the Maharashtra Electricity Duty Act, 2016 which repealedthe earlier the Maharashtra Electricity Duty Act, 1958, no such exemptionfrom levy/payment of electricity duty has been provided to such charitableeducation institutions.C

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4.4 It is submitted that the High Court has failed to consider thereis no provision, similar to the Repealed Act of 1958 (the MaharashtraElectricity Duty Act, 1958) in the new Act, 2016 (Maharashtra ElectricityDuty Act, 2016), and the charitable education institutions whetherregistered before or after coming into the new Act of 2016, are notDentitled to the exemption from payment of electricity duty.

4.5 It is further submitted that the High Court has not properlyappreciated or considered that by virtue of the statutory provisions underthe Repealed Act of 1958, the charitable education institutions wereenjoying concession from payment electricity consumption duty/electricity consumption charges and therefore there was no need to issueEa specific order in their favour under the Repealed Act of 1958. It issubmitted that therefore, if any order had been issued by the departmentin favour of any institution, it is neither an order as contemplated underRepealed Act, 1958 nor it is saved from proviso of Section 4 of theMaharashtra Electricity Duty Act, 2016. It is submitted that therefore,Fafter commencement of the new Act of 2016, such order does not conferright upon the charitable education institutions to claim exemption.

4.6 It is further submitted that as such the language used in thenew Act of 2016 with respect to the exemption/levy of electricity duty isvery clear and unambiguous. It is submitted that the words used areGplain and simple and therefore the same should be read with the intentionof the legislature particularly in favour of revenue. It is submitted that asper the law laid down by this Court in catena of decisions a taxing statuteis to be construed in favour of assesse but an exception or an exemptionprovision from a taxing statute has to be construed strictly. It is submittedthat even if there is any ambiguity in that regard the issue must beHanswered in favour of revenue.

4.7 In support of the above submissions, learned counsel appearingon behalf of the State has relied on the following decisions of this Court:-Commr. of Customs Vs. Dilip Kumar & Co., (2018) 9 SCC 1;Central Public Information Officer, Supreme Court of India Vs.Subhash Chandra Agarwal, (2020) 5 SCC 481; Essar Steel IndiaLtd. & Anr. Vs. State of Gujarat & Anr., (2017) 8 SCC 357; StarIndustries Vs. Commr. of Customs (Imports), (2016) 2 SCC 362;Giridhar G. Yadalam Vs. Commissioner of Wealth Tax & Another,(2015) 17 SCC 664; Godrej & Boyce Mfg. Co. Ltd. Vs. DeputyCommissioner of Income Tax & Anr., (2017) 7 SCC 421.

5. Making the above submissions and relying on the aforesaiddecisions of this Court, it is prayed to allow the present appeal and quashand set aside the impugned judgment and order passed by the HighCourt.

6. The present appeal is vehemently opposed by Shri ShekharNaphade, learned Senior Advocate, appearing on behalf of the originalwrit petitioners – respondents No.1 to 10 herein.

6.1 It is vehemently submitted by Shri Shekhar Naphade, learnedSenior Advocate appearing on behalf of the original writ petitioners thatin the facts and circumstances of the case and considering the fact thatthe original writ petitioners are charitable education institutions, the HighCourt has rightly held that they are exempted from payment of electricityduty.

6.2 It is submitted by Shri Naphade, learned Senior Advocateappearing on behalf of the original writ petitioners that as observed bythis Court in the case of C.W.S. (India) Ltd. Vs. Commissioner ofIncome Tax, 1994 Supp (2) SCC 296 (para 10), where a literalinterpretation leads to absurd result, the wording of the statute can bemodified to accord with the intention of the legislature and to avoidabsurdity.

6.3 It is submitted that if the interpretation canvassed by the stateis accepted then it will lead to absurdity and manifest injustice as school/colleges etc. run by the local authority will fall within the purview ofSection 3(2)(iii) of 2016 Act, while those run by the statutory universityor charitable institution registered under Bombay Trusts Act, 1950 (nowknown as Maharashtra Public Trusts Act, 1950), would fall outside theambit of Section 3(2)(iii). It is submitted that as such there is no essential AB

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Adifference between schools/colleges etc. run by the statutory universityor institution registered under the Maharashtra Public Trusts Act, 1950and those run by the local authority. It is submitted that such absurdity orinjustice cannot be the intention of the legislature.

6.4 It is further submitted by Shri Naphade, learned SeniorBAdvocate appearing on behalf of the original writ petitioners that thereis always a presumption that the legislature does not intend to violateArticle 14 of the Constitution of India. It is submitted that as per thecase on behalf of the State, Section 3(2)(iii) of 2016 Act covers onlyschools/colleges etc. of the local authority and those run by the statutoryuniversity or by private institutions are outside the scope of Section 3(2)(iii)Cof 2016 Act. It is submitted that this would lead to discrimination andarbitrariness. It is submitted that who runs the educational institutioncannot be the intelligible differentia for the purpose of classification. It issubmitted that if such an interpretation is accepted then Section 3(2)(iii)would be ultra vires Article 14 of the Constitution. It is submitted thatDwhile interpreting Section 3(2)(iii) of 2016 Act, Article 14 must beconsidered and interpretation which would accord with the mandate ofArticle 14 should be adopted. Reliance is placed on the decision of thisCourt in the case of B.R. Enterprises Vs. State of U.P. & Ors.,(1999) 9 SCC 700 (para 81).

E6.5 It is further submitted that even otherwise there is presumptionthat legislature does not make radical changes in existing law. Relianceis placed on the decision of this Court in the case of Byram PestonjiGariwala Vs. Union Bank of India & Ors., (1992) 1 SCC 31 (para29-38).FIt is submitted that it is not in dispute that Section 3(2)(iii a) of1958 Act clearly provided that the electricity duty shall not be imposedon schools/colleges etc. run by charitable institutions registered underthe Maharashtra Public Trusts Act, 1950. It is submitted that there is nodispute that the schools/colleges etc. of the writ petitioners fall withinthe purview the purview of Section 3(2)(iii a) of 1958 Act. It is submittedGthat therefore there is nothing in 2016 Act which warrants a conclusionthat there is a radical change in law leading to duty being imposed on theeducational institutions being run by the original writ petitioner.

6.6 Pointing out the following aspects, it is submitted by ShriNaphade learned Senior Advocate appearing on behalf of the originalHwrit petitioners, that as such there are no radical changes between the Maharashtra Electricity Duty Act, 1958 (1958 Act) and the MaharashtraElectricity Duty Act, 2016 (2016 Act). It is submitted that under Section3(2) of 1958 Act, no duty could be imposed on the following entities:- A

(a) Government of Maharashtra [Section 3(2)(i)]

(b) Local authorities carrying on specified activities [Section3(2)(ia)]

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(c) Licensee carrying on specified activities [Section 3(2)(ib)]

(d) Tramway company [Section 3(2)(ii)]

(e) Entity generating electricity for the purpose of supplying itfor the use of vehicles and vessels. [Section 3(2)(iv)]

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Note- under 1958 Act no duty could be imposed on the CentralGovernment due to the provisions of Article 285 of theConstitution.

6.6.1 It is further submitted that under Section 3(2) of 2016 ActDno duty can be imposed on the following entities:- (a)State Government [Section 3(2)(i)]

(b) Central Government [Section 3(2) (ii)]

This is by way abundant caution as no duty can be imposedEon the Central Government due to Article 285 of theConstitution.

(c) Licensee carrying on specified activities. [Section 3(2)(v)]

(d) Generating Company [Section 3(2)(vi)]

(e) Entity generating electricity for use of vehicles and vesselsF[Section 3(2)(vii)]

Note- At present there is Tramway company in the State ofMaharashtra. Thus there is no change in 2016 Act as regardsthe entities who are not subject to imposition of duty.

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6.6.2 Further, under Section 3(2) of the 1958 Act no duty could beimposed on following activities:- (a)Educational institutions run by local authority or statutoryuniversity, or charitable institution registered under BombayTrusts Act, 1950. [Section 3(2)(ia), 3(2)(iii) and 3(2)(iiia)]

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A(b)Local authority using electricity for hospital, nursing home,dispensary, clinic, public street lighting, public water works,system of public sewers or drains. [Section 3(2)(ia)]

(c) Use of electricity by licensee for the purpose of construction,maintenance, or operation of any generating, transmittingBand distributing system. [Section 3(2)(ib)]

(d) Generation of electricity for the purpose of supplying it forthe use of vehicles or vessels. [Section 3(2)(iv)]

(e) Where the energy is generated at a voltage not exceeding100 volts. [Section 3(2)(v)]C

6.7 It is submitted that both under the 1958 Act and 2016 Act, thepremises used by entities specified under Section 3(2) for the purpose ofresidence are subject to imposition of duty.

6.8 It is submitted that aforesaid analysis clearly shows that theDentities on whom no duty can be imposed have remained the same subjectto the rider that if the premises are used for residence, duty can beimposed.

6.9 It is submitted that the only question is whether educationalactivities carried on by local authorities, statutory university or a charitableinstitution registered under the Bombay Trusts Act, 1950 are within theEpurview of Section 3(2) of the 2016 Act?

6.10 It is submitted that it is not in dispute that under the 1958 Act,the educational institutions carried out by local authorities, statutoryuniversity, or the charitable institutions were not subject to imposition ofduty. The other activities which are not subject to imposition of electricityFduty, both under the 1958 Act and 2016 Act are as follows:- (a)Specified activities by local authorities [See Section 3(2)(ia)of 1958 Act Section 3(2)(iii) of 2016 Act.

(b) Generation of electricity for construction, maintenance andGoperation of any generating, transmitting and distrustingsystem by licensee. [See Section 3(2)(ib) of 1958 Act andSection 3(2)(v) of 2016 Act.

(c) Generation of electricity for the purpose of supplying forthe use of vehicles or vessels [See Section 3(2)(iv) of 1958HAct and Section 3(2) (vii) of 2016 Act.

(d) Generation of electricity at a voltage not exceeding 100volts [See Section 3(2)(v) of the 1958 Act and Section3(2)(viii) of 2016 Act.

6.11 It is submitted that thus entities who are not subject toimposition of duty have remained the same, both under 1958 Act and2016 Act and that other activities enumerated herein above have remainedsame, both under 1958 Act and 2016 Act. It is submitted that therefore,it is difficult to accept that in respect of educational activities a radicalchange is brought about by 2016 Act by excluding educational institutionsrun by statutory university or by charitable institutions. It is submittedthat either it is a case of Casus Omissus or a case of bad drafting of2016 Act.

6.12 It is submitted that 1958 Act clearly indicates that it was thepolicy of the legislature to exclude the educational activities run byspecified entities from imposition of duty. There is nothing in the 2016Act which would indicate that there is a radical departure in respect ofeducational activities. Some of the activities which are not subject toimposition of duty both under the 1958 Act and 2016 Act are commercialin nature. It is submitted that therefore if that be so then why the legislaturewould depart from its earlier policy in respect of educational activities aspromotion of education is in public interest. It is submitted that if thecommercial activities are not subject to imposition of duty then it wouldbe unreasonable on the part of the legislature to impose duty on non-commercial activity of imparting education. It is submitted that policy ofthe legislature is presumed to be reasonable so that it does not fall foulprinciple of unreasonableness or arbitrariness.

6.13 Lastly, it is submitted by Shri Naphade learned SeniorAdvocate appearing on behalf of the writ petitioners, that in the presentcase the doctrine of last antecedent may also be applied. It is submittedthat first part of Section 3(2) covers all educational activities irrespectiveof the entity which carries on such activities. It is submitted that in the1958 Act in Section 3(2), the following words used are “for the purposesof or in respect of school ……. Students hostel” and in the second partof Section 3(2) deals with activities carried on by the local authorities. Itis submitted that in the 2016 Act, the expression “Run by any localbodies……State of Maharashtra” does not qualify the educationalactivities but it qualifies activities namely “Hospitals, nursing homes…….apart of system”. It is submitted that if the doctrine of Last Antecedent is A

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Aapplied to the present case, the only possible conclusion is that theexpression “Run by any local bodies” does not qualify educational activitiesreferred to in first part of Section 3(2) but qualifies the second part i.e.the other activities.

6.14 It is further submitted that Electricity Duty Act is a taxingBstatute. Therefore, it must be strictly construed and if there is anyambiguity the same must be resolved in favour of the assessee. Thelegislature is covering all educational activities in one provision containedin Section 3(2)(iii) irrespective of the entity which carries on the activities.While doing so the ambiguity has crept in drafting. It is submitted thatthe benefit of ambiguity must lean in favour of the assessee rather thanCthe revenue.

6.15 Making the above submissions and relying on the decisionsof this Court, it is prayed to dismiss the present appeal.

7. We have heard the learned counsel appearing on behalf of therespective parties at length.D

8. The short question which is posed for the consideration of thisCourt is whether the original writ petitioners being charitable educationinstitutions registered under the provisions of the Public Trusts Act (theMaharashtra Public Trusts Act, 1950) are entitled to the exemption frompayment of electricity duty post 01.09.2016 i.e. as per the provisions ofEthe Maharashtra Electricity Duty Act, 2016?

9. While answering the aforesaid question/issue, law on how tointerpret and/or consider the statutory provisions in the taxing statuteand the exemption notifications is required to be analysed first.

9.1 In the case of Dilip Kumar & Company (supra), five-judgeFbench of this Court has held that in every taxing statute –– the charging,the computation and exemption provisions at the threshold stage shouldbe interpreted strictly. In case of ambiguity in case of charging provision,the benefit necessarily must go into favour of the subject/assessee. Thismeans that the subject of tax, the person liable to pay tax and the rate atwhich the tax is to be levied have to be interpreted and construed strictly.GIf there is any ambiguity in any of these three components, no tax can belevied till the ambiguity or defect was removed by the legislature [Seepages 53 to 55 in Dilip Kumar & Company]. However, in case ofexemption notification or clause, same is to be allowed based wholly bythe language of the notification, and exemption cannot be gathered byHnecessary implication, or on a construction different from the words used by reference to the object and purpose of granting exemption [SeeHansraj Gordhandas Vs. H.H. Dave, Assistant Collector of CentralExcise Customs, Surat & Ors., AIR 1970 SC 755]. Further it’s forthe assessee to show by construction of the exemption clause/notificationthat it comes within the purview of exemption. The assessee/citizencannot rely on ambiguity or doubt to claim benefit of exemption. Therationale is not to widen the ambit at the stage of applicability. However,once the hurdle is crossed, the notification is constructed liberally [SeeCollector of Central Excise, Bombay-I & Anr. vs. Parle Exports(P) Ltd., (1989) 1 SCC 345 and Union of India & Ors. vs. WoodPapers Ltd. & Anr., (1998) 4 SCC 256]. Thus, distinction can bemade between the substantive requirements that require strict compliance– non-compliance of which would render the assessee ineligible to claimexemption, and the procedural or compliance provision which can beinterpreted liberally [See paragraphs 64 to 65 in Dilip Kumar &Company].

9.2 Essar Steel India Ltd. & Anr. was a case relating to grantof exemption under Section 3(2)(vii)(a) from payment of electricity dutyunder the 1958 Act. The court relied on several decisions on interpretationof notification in nature of exemption, to hold that the statutory conditionsfor grant of exemption can neither be tinkered with nor diluted. Theexemption notification must be interpreted by their own wordings, andwhere the wordings of notification with regard the construction is clear,it has to be given effect to. If on the wordings of the notification benefitis not available, then the court would not grant benefit by stretching thewords of the notification or by adding words to the notification. To interpretthe exemption notification one should go by the clear, unambiguouswordings thereof. These principles were applied in Essar Steel IndiaLtd. & Anr. to deny benefit of Section 3(2)(vii)(a) of the 1958 Act, asthe condition of generating energy jointly with another undertaking wasnot fulfilled.

9.3 In case of Star Industries, it was held that the eligibilitycriteria laid down for exemption notification is required to be construedstrictly, and once it is found that applicant satisfies the same, the exemptionnotification should be construed liberally. Reference was made to thedecision Novopan India Ltd. vs. CCE and Customs, 1994 Supp (3)SCC 606 and the Constitution Bench decision in Hansraj Gordhandasvs. H.H. Dave, Assistant Collector of Central Excise Customs,Surat & Ors. (supra), which decisions have been noted and elucidated A

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Aby this Court in Dilip Kumar & Company. Therefore, in the context ofexemption notification there is no new room for intendment. Regardmust be to the clear meaning of the words. Claim to exemption is governedwholly by the language of the notification, which means by plain termsof the exemption clause. An assessee cannot claim benefit of exemption,on the principle that in case of ambiguity a taxing statue must be construedBin his favour, for an exception or exemption provision must be construedstrictly.

9.4 In the case of Giridhar G. Yadalam(supra), it is observed andheld that in taxing statute, it is the plain language of the provision thathas to be preferred where language is plain and is capable of one definiteCmeaning. It is further observed that the strict interpretation to theexemption provision is to be accorded. It is observed that the purposiveinterpretation can be given only when there is some ambiguity in thelanguage of the statutory provision or it leads to absurd results. Inparagraph 16, it is observed and held as under:-D“16. We have already pointed out that on the plain language ofthe provision in question, the benefit of the said clause would beapplicable only in respect of the building “which has beenconstructed”. The expression “has been constructed” obviouslycannot include within its sweep a building which is not fullyEconstructed or in the process of construction. The opening wordsof clause (ii) also become important in this behalf, where it isstated that “the land occupied by any building”. The land cannotbe treated to be occupied by a building where it is still underconstruction. If the contention of Mr Jain is accepted, an assesseewould become entitled to the benefit of the said clause, at thatFvery moment, the commencement of construction even withconstruction the moment one brick is laid. It would be too far-fetched, in such a situation, to say that the land stands occupiedby a building that has been constructed thereon. Even Mr Jainwas candid in accepting that when the construction of building isGstill going on and is not completed, literally speaking, it cannot besaid that the building “has been constructed”. It is for this reasonthat he wanted us to give the benefit of this provision even in suchcases by reading the expression to mean the same as “is beingconstructed”. His submission was that the moment constructionstarts the urban land is put to “productive use” and that entitlesHthe land from exemption of wealth tax. This argument of giving so-called purposive interpretation has to be rejected for more thanone reasons. These are:

(i) In taxing statute, it is the plain language of the provision thathas to be preferred where language is plain and is capable of onedefinite meaning.

(ii) Strict interpretation to the exemption provision is to be accorded,which is the case at hand.

(iii) The purposive interpretation can be given only when there issome ambiguity in the language of the statutory provision or itleads to absurd results. We do not find it to be so in the presentcase.”

9.5 In the case of Godrej & Boyce Mfg. Co. Ltd. (supra), it isobserved and held by this Court that where the words of the statute areclear and unambiguous, recourse cannot be had to principles ofinterpretation other than the literal view. It is further observed that it isthe bounden duty and obligation of the court to interpret the statute as itis. It is further observed that it is contrary to all rules of construction toread words into a statute which the legislature in its wisdom hasdeliberately not incorporated.

10. Applying the law laid down by this Court in the aforesaiddecisions to the facts of the case on hand, it is required to be consideredwhether post 01.09.2016 and on coming into force the 2016 Act, still, thewrit petitioners – charitable education institutions registered under thePublic Trusts Act and or the Societies Registration Act are entitled tothe exemption from payment of electricity duty?

11. For the aforesaid purpose, the charging sections/exemptionprovisions under the pre Act of 2016 and post Act of 2016 are requiredto be referred to. Section 3 of the Maharashtra Electricity Duty Act,1958, which was applicable prior to coming into force of the MaharashtraElectricity Duty Act, 2016, relevant for our purpose reads as under:- “3. (1) Subject to the provisions of sub-section (2), there shall belevied and paid to the State Government on the 1[consumptioncharges or the] units of energy consumed (excluding losses ofenergy sustained in transmission and transformation by a licenseebefore supply to a consumer), a duty (hereinafter referred to as”electricity duty”) at the rates specified in the Schedule to this Act.

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A(2) (a) Electricity duty shall not be leviable on the 3[consumptioncharges or the] units of energy consumed,—

(i) by the Government of Maharashtra (save in respect ofpremises used for residential purposes); (ia) by or in a respect of any municipal corporation,municipality, municipal committee, town committee, notifiedarea committee, Cantonment Board, Zilla Parishad or villagepanchyat constituted under any law for the time being inforce in the State, for the purpose of, or in respect of [5][ aschool or college imparting education or training in academicor technical subjects, a hospital, nursing home, dispensary,clinic, public street lighting, public water works and systemof public sewers or drains (save in respect of premises usedfor residential purposes); B

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(ib) by any licensee for purposes directly connected withconstruction, maintenance or operation of any generating,transmitting and distributing system of the licensee; D

(ii) by a tramway company, save in respect of premises usedfor residential and office purposes;

(iii) by or in respect of any statutory University and institutionsrun by the statutory University for the purpose of or in respectof education, research and training (save in respect of premisesused for residential purposes); E

(iiia) by or in respect of charitable institution registered underthe Bombay Public Trusts Act, 1950, for the purpose of, orin respect of, school or college imparting education ortraining in academic or technical subjects (save in respectof premises used for residential purposes);”

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That thereafter the Maharashtra Electricity Duty Act, 2016 hasbeen enacted, which has come into effect from 08.08.2016. Section 3 ofGthe 2016 Act, relevant for our purpose reads as under:-

“3. (1) Subject to the provisions of sub-section (2), there shall belevied and paid to the State Government, on the consumptioncharges or the units of energy consumed, a duty (hereinafterreferred to as “Electricity Duty”) at the rates classified as per theTariff Schedule of the Commission, from time to time, on the basis H

THE STATE OF MAHARASHTRA v. SHRI VILE PARLE KELVANIMANDAL [M. R. SHAH, J.]

of use of the premises by the consumer on whose name energy issupplied by the licensee, or a consumer who is consuming energyproduced from an independent source other than that supplied bythe licensee, for his own use as specified in the Schedules, whichare based on the following classifications :––

(a) the consumption charges where energy is supplied by thelicensee; Explanation.–– For the purpose of this sub-section, “use of thepremises by the consumer on whose name energy is supplied”means the basis of purpose for which the consumer in whosename supply has been released and measured by the meterinstalled at point of supply by the licensee, on which theconsumption charges are billed as per the tariff, however, inhuge industrial parks, commercial premises or malls whereelectricity is supplied at single point or as bulk consumers andfurther it is re-distributed as one of the utility service providedby the owner of the premises to the end users occupying thearea on lease or rent or otherwise, whose purpose of use ofelectricity at the user’s end may vary categorically; (b) units of energy consumed by a person and energy producedthrough the–

(i) Captive generation;

(ii) Co-generation;

(iii) Standby generation;

(iv) Renewable Energy; or

(v) Independent Power Producer (IPP);

(c) units of energy consumed which are not covered underclauses (a) and (b), that is, open access or other sources.

(2) Electricity duty shall not be levied on the consumption chargesor energy consumed,––

(i) by the State Government excluding the public undertakings;

(ii) by the Central Government excluding the publicundertakings;

(iii) for the purposes of, or in respect of a school or college orinstitution imparting education or training, student’s, hostels, A

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hospitals, nursing homes, dispensaries, clinics, public streetslighting, public water works, sewerage systems, public gardensincluding zoos, public museums, administrative offices formingwhole or, as the case may be, a part of system run by any localbodies constituted under any law for the time being in force inthe State of Maharashtra; A

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(iv) by the Government hostels;

(v) by any licensee, or by any other person engaged in thebusiness of supplying electricity to the public under theElectricity Act, for the purposes directly connected withCconstruction, maintenance, operation of any transmitting anddistributing system, including the losses incurred therein;”

11.1 As per Section 16 of the 2016 Act, on coming into force the2016 Act, the Maharashtra Electricity Duty Act, 1958 stood repealedsubject to the eventualities mentioned in Section 16 of the 2016 Act.DNone of the eventuality mentioned in proviso to Section 16 shall beattracted and/or applicable to the facts of the case on hand in view ofthe specific provisions providing for exemption from payment of theelectricity duty as per sub-section (2) of Section 3 of the 2016 Act.Therefore, for the purpose of exemption from payment of electricityduty on and after 01.09.2016, sub-section (2) of Section 3 of the 2016EAct shall have to be applied and shall be applicable.

11.2 As per sub-section (2) of Section 3 of the 1958 Act, theelectricity duty was not leviable on the consumption charges or the unitsof energy consumed…………..by or in respect of charitable institutionregistered under the Bombay Public Trusts Act, 1950, for the purposeFof, or in respect of, school or college imparting education or training inacademic or technical subjects (save in respect of premises used forresidential purposes) [Section 3(2)(iiia)]. Therefore, under the 1958 Act,the electricity duty was not leviable on the consumption charges or theunits of energy consumed by or in respect of charitable institutions forGthe purpose; in respect of school or college imparting education or trainingin academic or technical subjects. Even as per Section 3(2)(ia), electricityduty shall not be leviable on the consumption charges or the units ofenergy consumed by or in a respect of any municipal corporation,municipality, municipal committee, town committee, notified areacommittee, Cantonment Board, Zilla Parishad or village panchyatHconstituted under any law for the time being in force in the State, for the purpose of, or in respect of a school or college imparting education ortraining in academic or technical subjects, a hospital, nursing home,dispensary, clinic, public street lighting, public water works and systemof public sewers or drains (save in respect of premises used for residentialpurposes.

11.3 However, there are material changes under the 2016 Act.As per Section 3(2) of the 2016 Act, even the public undertakings areliable to pay the electricity duty. As per Section 3(2)(iii), electricity dutyis not leviable on the consumption charges or energy consumed, for thepurposes of, or in respect of a school or college or institution impartingeducation or training, student’s, hostels, hospitals, nursing homes,dispensaries, clinics, public streets lighting, public water works, seweragesystems, public gardens including zoos, public museums, administrativeoffices forming whole or, as the case may be, a part of system run byany local bodies constituted under any law for the time being in force inthe State of Maharashtra. Therefore, Section 3(2)(iiia), which was therein 1958 Act, is now conspicuously and deliberately absent in Section3(2) of the 2016 Act.

11.4 On true interpretation of Section 3(2)(iii), under 2016 Act,electricity duty on the consumption of charges or energy consumed forthe purposes of, or in respect of a school or college or institution impartingeducation or training, student’s, hostels………….run by any local bodiesshall alone be exempted from levy of electricity duty and the StateGovernment and Central Government are also specifically excluded frompayment of electricity duty. However, the public sector undertakings arenot exempted from payment of electricity Act. Therefore, under Section3(2) of the 2016 Act, the charitable institutions running the educationalinstitutions are not exempted from payment of electricity duty, which assuch was specifically exempted under Section 3(2)(iiia) of the 1958 Act.The language and words used in Section 3(2) are plain and simple andare capable of only one definite meaning that there is no exemptionprovided under the 2016 Act from levy of electricity duty so far as thecharitable education institutions are concerned. As observed herein above,where the words are clear and unambiguous, recourse cannot be had toprinciples of interpretation other than the literal view. As observedhereinabove, the exemption provision need to be interpreted literally andwhen the language used in exemption provision is simple, clear andunambiguous, the same has to be applied rigorously, strictly and literally.

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AUnder the 2016 Act, charitable education institutions running the schoolsor colleges are specifically excluded from the exemption clause/exemption provision – Section 3(2).

12. If the submissions on behalf of the original writ petitioners isaccepted that as per Section 3(2)(iii), with respect to all the schools/Bcolleges or institutions, imparting education or training, the electricityduty is not leviable, in that case it would lead to absurd result. In thatcase, even the private hospitals, nursing homes, dispensaries and clinics,who are profit making entities shall also claim the exemption from levyof electricity duty. The intention of the legislature as per Section 3(2) ofthe 2016 Act, is very clear and unambiguous that the electricity dutyCshall not be leviable on the consumption charges or energy consumed (i)by the State Government excluding the public sector undertakings; (ii)by the Central Government excluding public sector undertakings and(iii) ……. run by the local bodies constituted under any law for the timebeing in force in the State of Maharashtra. Other than the StateDGovernment, Central Government and the local bodies and theGovernment hostels, no exemption from payment of electricity duty hasbeen provided.

13. In view of the above findings recorded hereinabove, there isno question of applying the doctrine of Last Antecedents as canvassedEby Shri Naphade, learned Senior Advocate, appearing on behalf of theoriginal writ petitioners.

14. In that view of the above the original writ petitioners – charitableeducation institutions registered under the provisions of the SocietiesRegistration Act and/or under the Maharashtra Public Trusts Act, areFnot entitled to any exemption from levy/payment of the electricity dutyon or after 08.08.2016 i.e. from the date on which the MaharashtraElectricity Duty Act, 2016 came into effect. Therefore, the High Courthas committed a grave error in setting aside the levy of electricity dutylevied on the original writ petitioners – respondents No.1 to 10 herein.The impugned judgment and order passed by the High Court isGunsustainable both, on law and on facts and the same deserves to bedismissed.

In view of the above and for the reasons stated above, the presentAppeal Succeeds. The impugned judgment and order dated 28.02.2019passed by the High Court in W.P. No.2961 of 2018, is hereby quashedHand set aside and it is held that the original writ petitioners – respondents THE STATE OF MAHARASHTRA v. SHRI VILE PARLE KELVANIMANDAL [M. R. SHAH, J.]

No.1 to 10 herein – charitable education institutions registered under theSocieties Registration Act and the Maharashtra Public Trusts Act, arenot exempt from levy/payment of electricity duty levied on the consumptioncharges or the energy consumed even with respect to the propertiesused by such charitable education institutions for the purpose of or inrespect of the school/college imparting education or training in academicor technical subjects. The present Appeal is accordingly allowed. Thereshall be no order as to costs.

Devika Gujral

Appeal allowed.

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