STATE OF RAJASTHAN & Ors. v. MIS. BASANT AGROTECH (INDIA) LTD

Judgment

17 S.C.R. 395 STATE OF RAJASTHAN AND OTHERS v. MIS. BASANT AGROTECH (INDIA) LTD. (Civil Appeal No.10867 of 2013) DECEMBER 6, 2013 [ANIL R. DAVE AND DIPAK MISRA, JJ.] A B Administrative Law - Subordinate/delegated legislation - Whether can be given retrospective effect - Held: Legislature can make a law retrospectively or prospectively C subject to justifiability and acceptability within the constitutional parameters - A subordinate legislation can be given retrospective effect if a power in its behalf is contained in the principal Act - In the present case, Notification could not have been given retrospective operation, because such D an interpretation does not flow from the $tatute i.e. s. 16 of Rajasthan Finance Act, 2008 - The words "from time to time" used in s. 16 have a· futuristic tenor - It does not engulf the spectrum .of retrospectivity or retroactivity in its ambit and sweep - period prior to the date of its publication is transgression of the statutory postulate - Rajasthan Finance Act, 2008- s. 16. therefore, the Notification so far as it covered the E Interpretation of Statutes: Construction of a statutory provision - If any implied F power is construed from the language used in the statute, there has to be a holistic reading of the statute, but not a fragmented one. Interpretation of Fiscal legislation/taxing statutes - G Fundamental principles for - Discussed. Words and Phrases - Expression 'From time to time' - Connotation of - Discussed. 395 H 396 SUPREME COURT REPORTS (2013] 17 S.C.R. A The respondents - the mining lease-holders for extraction of major minerals, filed writ petitions before High Court challenging the Constitutional validity of Chapter VII of Rajasthan Finance Act, 2008, which provides for levy of cess on mineral rights. The lease- s holders were required to pay environment and health cess imposed u/s. 16 of the Act. In addition Notification dated 23.1.2009 issued by State Government was also challenged, whereby the Notification dated 25.2.2002 was amended. It was C challenged on the ground that the Notification sought to levy environment and health •cess with retrospective effect i.e. w.e.f. 1.4.2008 and the Notification was illegal and bad in l~w to thE! extent it was given retrospective effect. D The High Court held that the levy by the State Government was within its legislative competence and hence not unconstitutional. However, the High Court held the Notification dated 23.1.2009 was ultra vires and the E same could no_t have retrospective effect. Hence the present appeals by the State. The scope of the present appeals was limited to the question whether the order of High Court declaring the Notification to the effect that it cannot have retrospective effect is valid or justified. F The appellant-State contended that wherever statutory power is conferred, there is no limitation with regard to exercise of that power and the same can be exercised from time to time; and that administrative power as well as quasi-legislative power can be exercised G any. number of times, in view of the principle embodied u/s. 21 of General Clauses Act. Dismissing the appeal, the Court HELD: 1.1. In construing fiscal statutes and in H STATE OF RAJASTHAN v. BASANT AGROTECH (INDIA) LTD. 397 determining the liability of a subject to tax, one must have A regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. If the Revenue satisfies the Court that the case falls strictly within the provision of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to -probe into the intentions of the legislature and by considering what was the substance of the matter. The rule of construction of a charging section is that before c taxing any person, it must be shown that he falls within the ambit of the charging section by clear words used in the section. No one can be taxed by implication. A charging section has to be construed strictly. [Paras 14 and 17] [409-C-E; 411-C] B D AS. Fernandez vs. The State of Kera/a AIR 1957 SC 657: 1957 SCR 837; Bank of Chettinad vs. Income-tax Commr. AIR 1940 PC 183; Commissioner of Sa/ex-tax, IJ.P. vs. Modi Sugar Mills Ltd. AIR 1961 SC 1047: 1961 SCR 189; Commissioner of Income-tax, Madras vs. Kasturi and Sons E Ltd. AIR 1999 SC 1275: 1999 (1) SCR 1207; Commissioner of Wealth Tax, Gujarat-Ill, Ahmedabad vs. Ellis Bridge Gymkhana AIR 1998 SC 120: 1997 ( 4) Suppl. SCR 626 - relied on. Partington vs. The Attorney" General (1869) 4 H L 100 F (8) - referred to.

2.1. A legislature can make a law retrospectively or prospectively subject to justifiability and acceptability within the constitutional parameters. A subordinate G legislation can be given retrospective effect if a power in this behalf is contained in the principal Act. if the power has been conferred under the main Act by the legislature, the State Government or the delegated authority can H 398 SUPREME COURT REPORTS [2013] 17 S.C.R. A issue a notification within the said parameters. [Paras 22 and 26] [412-F; 414-D] 8 Mahabir Vegetable Oils (P) Ltd. and Anr. vs. State of Haryana and Ors. (2006) 3 SCC 620: 2006 (2) SCR 1172; MRF Ltd. Kottayam vs. Asstt. Commissioner (Assessment) Sales Tax and Ors. (2006) 8 SCC 702: 2006 (6) Suppl. SCR 417; M. M. Nagalingam Nadar Sons vs. State of Kera/a (1993) 91 STC 61 (Ker); Vice-Chancellor, M.O. University, Rohtak vs. Jahan Singh (2007) 5 SCC 77: 2007 (3) SCR 676; Ahmedabad Urban pevelopment Authority vs. C Sharadkumar Jayantikumar Pasawalla and Ors. AIR 1992 SC 2038: 1992 (3) SCR 328 - relied on. A. Thangal Kunju Musaliar vs. M. Venkatachalam Potti, Authorised Official and Income-Tax Officer and Anr. AIR 1956 D SC 246: 1955 SCR 1196; O.G. Gose and Co. (Agents) Pvt. Ltd. vs. State of Kera/a and Anr. (1980) 2 SCC 410: 1980 (1) SCR 804 - distinguished.

2.2. In the present case, the words used in Section 16 of Rajasthan Finance Act, 2008 are "from time to time". E The State Government can fix the rate on any of the minerals from period to period with the conditions prescribed therein, namely, no limitation is imposed by the Parliament by law relating to mineral development. The rate fixed can be varied, changed or modified from time to time. Because of the use of the words "time to time" a notification can not be issued imposing a rate of tax with retrospective effect or apply the notification retrospectively. A notification can only be issued, prospectively, because the legislature has deliberately G used the words "from time to time" [Para 36] [421-E-H; F 422-A]