Courts Cannot Compensate For Defective Phrasing Of Legislatures By Adding Or Mending- Observes SC
A Supreme Court Bench of Justice MR Shah and Justice BV Nagarathna has stressed that the language employed in a statute is the determinative factor of legislative intent. It was further clarified that the legislature's intention is primarily to be gathered from the language used, which means that attention should be paid to what has been said and what has not been said. In light of the same, it was said that the courts cannot aid the legislatures' defective phrasing of an Act; they cannot add or mend, and by construction makeup deficiencies which are left there.
Counsel Aastha Mehta and Counsel Deepanwita Priyanka appeared for the State.
In this case, the Division Bench of the High Court had set aside the penalty and interest levied under Section 45(6) of the Gujarat Sales Tax Act, 1969. In response, the State of Gujarat approached the High Court.
The assessee was engaged in the business of executing indivisible works of undertaking contract of coal tar and enamel coating on pipes. He had opted for payment of lumpsum tax as provided under Section 55A of the Gujarat Sales Tax Act, 1969. The assessee deposited tax at the rate of 2% on sales involved in the execution of works by treating the same as a civil works contract as prescribed in a notification issued by the Government.
The Assessing Officer passed an order holding that the contract of coating of pipes is not a civil works contract and therefore, the composition amount is payable not at the rate of 2% as deposited by the respondent, but it falls under a Residuary Entry.
On hearing the parties and perusing the order passed by the High Court, the Supreme Court formed the short question to be whether while imposing/levying penalty and interest leviable under Section 45(6) and Section 47(4A) of the Act, 1969, mens rea on the part of the assessee is required to be considered.
Subsequently, the Court observed that "the word used in Section 45(6) is “shall be levied”. The dealer shall be liable to pay the penalty not exceeding one and onehalf times of the difference of the tax as mentioned in subsection (5) of Section 45 of the Act, 1969. The language used in Section 45 is precise, plain and unambiguous. The intention of the legislature is very clear and unambiguous that the moment any eventuality as mentioned in Section 45(5) occurs, the penalty shall be leviable as mentioned in subsection (6) of Section 45".
In furtherance of the same, the Court observed that "No other word like mens rea and/or satisfaction of the assessing officer and/or other language is used like in Section 11AC of the Central Excise Act. It is a well settled principle in law that the Court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. As per the settled position of law, the intention of the legislature is primarily to be gathered from the language used, which means that attention should be paid to what has been said as also to what has not been said. The courts cannot aid the legislatures' defective phrasing of an Act; they cannot add or mend, and by construction make up deficiencies which are left there".
In light of the same, the Court held that "on strict interpretation of Section 45 and Section 47 of the Act, 1969, the only conclusion would be that the penalty and interest leviable under Section 45 and 47(4A) of the Act, 1969 are statutory and mandatory and there is no discretion vested in the Commissioner/Assessing Officer to levy or not to levy the penalty and interest other than as mentioned in Section 45(6) and Section 47 of the Act, 1969".
Regarding the submission that the dealer shall not be liable to pay the tax at the rate of 12% and that it was incompetence on the part of the authority to prove the difference of more than 25% and that the concession was wrongly given by the Senior Advocate appearing on behalf of the assessee before the High Court, the Court held that "a conscious decision was taken by the learned Senior Advocate appearing on behalf of the dealer, who appeared before the High Court and therefore, he did not press the issue/question on the liability to pay the tax at the rate of 12% was wrongly given. It is to be noted that the respondent – dealer was represented through a very senior advocate before the High Court. Therefore, it cannot be said that the concession was wrongly given".
Resultantly, the appeal was allowed. No orders were passed as to costs.
Cause Title: State of Gujarat and Anr. vs M/s Saw Pipes Ltd. (known as Jindal Saw Ltd.)