Tax/Taxation:

Exemption Notification – Interpretation of – In case of ambiguity in such Notification, whether the benefit of ambiguity would go to assessee or Revenue – Held: Exemption Notification should be interpreted strictly – The burden to prove the applicability of the exemption Notification would be on the assessee – In case of ambiguity, benefit of such ambiguity would go to Revenue and not to assessee - *Sun Export case wherein it was held that benefit of ambiguity would go to assessee is overruled.

Taxing statute and Exemption Notification – Interpretation of – Held: There is distinction in interpreting a charging provision of a taxation statute and in the interpretation of exemption Notification – Any ambiguity in charging provision inures to the benefit of the assessee, but any ambiguity in the exemption clause or exemption Notification would go in favour of Revenue.

Interpretation of Statutes:

General principles of interpretation – Purpose of interpretation – Tools of interpretation – Discussed.

Interpretation of fiscal statutes – Held: While interpreting fiscal statutes court has to apply strict rule of interpretation.

‘Plain meaning rule’ of interpretation – Held: When language in the statute is plain and unambiguous, Court has to seal and understand the plain language as such, and there is no scope of interpretation.

‘Strict interpretation’ and ‘Literal interpretation’ – Distinction between – Held: All cases of literal interpretation would involve strict rule of interpretation, but strict rule may not necessarily involve the former, especially in the area of taxation – Thus strict interpretation does not encompass strict literalism into its fold.

Interpretation of taxing statute – Rule of interpretation – Held: Every taxing statute including charging, computation and exemption clause (at the threshold stage) should be interpreted strictly.

Contextual or purposive interpretation – Of taxing statutes – Held: In a taxation statute there is no room for any intendment – In taxation statutes contextual or purposive interpretation cannot be applied – Nor any resort be made to look to other supporting material – Equity has no place in interpreting a tax statute.