STATE LEVEL COMMITTEE AND ANR.versusM/S. MORGARDSHAMMAR INDIA LTD.

              STATE LEVEL COMMITTEE AND ANR.                                    A
                                     v.
              M/S. MORGARDSHAMMAR INDIA LTD.

                          NOVEMBER 10, 1995
                                                                                B
         [B.P. JEEVAN REDDY AND S.B. MAJMUDAR, JJ.]

       U.P. Sales Tax Act-Section 4A Explanation (i)-Exemption from sales
tax of goods manufactured by a new unit-Definition of 'new unit' in E>.plana-
tion (i)-Disqualification if machinery used in th~ factory or workshop is
acquired for use in any other factory-No requirement to enquire whether that
                                                                                c
machinery were actually used in any other f act01y in India.

       The respondent unit applied for issuance of an eligibility certificate
U/s. 4-A of the U.P. Sales Tax Act on the ground that it had set up a new
unit. The appropriate authorities denied them the certificate holding that      D
part of the machinery used in setting up the respondent unit was 'acquired
for use in any other factory or workshop in India' and, therefore, the
respondent unit did not qualify as a 'new unit'. The writ petition filed by
the respondent was allowed by the High Court holding that unless the
machinery acquired for use in any other factory or workshop in India is
actually used in that other factory or workshop in India, the disqualifica-     E
tion provided by clause (a) in the Explanation is not attracted. The High
Court remitted the matter to the State Level Committee with a direction
to re-examine the material on record and to record a categorical finding
as to whether or not the machinery purchased by the petitioner from other
factory was actually used in that other factory. This appeal had been filed     F
against the judgment of the High Court.

       The respondent submitted that Section 4-A was devised to encourage
new industries, disqualification of an unit on the mere ground that part
of the machinery installed in the unit was acquired by another person for       G
setting up a unit, which in fact he never used, would not be consistent with
the object underlying the proYision, and therefore, Section 4-A must be
literally construed to further the object underlying it and in case of
ambiguity, the construction favouring the assessee should be adopted; that
the words 'acquired for use in any other factory or workshop in India' must
be read and understood as 'acquired for use in any other existing factory       H
                                     63
    64                    SUPREME COURT REPORTS [1995) SUPP. 5 S.C.R.

A   or workshop in India' and that the respondent unit had substantially
    complied with· the requirement of that clause in the definition inasmuch
    as the value of the machinery acquired from other unit was only about Rs.
    4.5 lakhs as against the value of the entire machinery at Rs. 25 lakhs.

          Allowing the appeal, this Court
B
          HELD: 1.L Under section 4-A of the U.P. Sales Tax Act, for claiming
    exemption from sales tax, it is a disqualification if the new factory or
    workshop uses machinery/accessories/components already used in any
    other factory or workshop in India. It is equally a disqualification if it uses
C   machinery/accessories/components which were acquired for use in any
    other factory or workshop in India. When the clause uses both the said
    expressions simultaneously, it would not be reasonable or proper to con-
    strue the words "acquired for use" as meaning the same thing as "already
    used". Such a construction would make the words "acquired for use" super-
    fluous and a surplusage. No such interpretation ought to be adopted by a
D   Court. The words "acquired for use" must be understood in their plain and
    ordinary meaning. It is enough that the machinery/accessories/components
    which are used in the factory or workshop (claiming the benefit of section
    4-A) are acquired for use in any other factory or workshop in India. It is
    not necessary to go further and enquire whether that machinery/acces-
    sories/components were actually used in any other factory or workshop in
E
    India. All the words used in the clause have to be given their due meaning.
    None of them can be treated as a surplusage. It is not also possible to ignore
    the words expressly employed in the said clause or to explain them away on
    notions of one's own reasonableness. (69-B-E; 70-B]

F          1.2. No unit has a right to claim exemption from tax as a matter of
    right. His right is only insofar as it is provided by section 4-A. While
    providing for exemption, the Legislature has hedged it with certain condi-
    tions. It is not open to the Court to ignore those conditions and extend the
    exemption. When the clause uses both the expressions "already used" and
G   "acquired for use" they cannot be construed as meaning one and the same
    thing by a process of interpretation. (70-E-F]

          1.3. A p~ovision providing for an exemption or an exception, as the
    case may be, has to be construed strictly. Whenever the Legislature wanted
    to refer to an existing factory or workshop, it has said so specifically. In
H   such a case it is not possible to read the words "acquired for use in any
                 STATEv. MORGARDSHAMMARINDIALTD.                         65

other factory or workshop in India" to mean "acquired for use in any other A
existing factory or workshop in India". There is no reason to add any words
to those employed in the clause. It cannot also be said that such addition
ofword(s) is necessary to avoid an absurdity. The clause uses all the three
words - machinery, accessories or components. The use of the word "or"
indicates that use of either of them, which are already used or acquired for B
use in any other factory or workshop in India, would disqualify the factory
or workshop from being called a "new unit" within the meaning of section
4-A. The clause does not say or indicate in any manner that only where the
entire machinery installed in the unit (claiming to the new unit) has already
been used or was acquired for use in any other factory or workshop in India,
that the disqualification contained therein gets attracted. In the face of the C
clear language of the clause, it is not possible to entertain the submission
of substantial compliance. [70-G-H; 74-H; 75-A-D]

    Amit Plastic Industry, Ghaziabad v. Divisional Level Committee,
Meemt, (1994) UPTC 121, referred.
                                                                              D
      Mangalore Chemicals and Fe1tilizers Limited v. Deputy Commissioner
of Commercial Taxes, [1992) Supp. 1 SCC 21 and Novopan India Ltd.,
Hyde.rabad v. Collector of Central Excise and Customs, Hyderabad, [1994)
Suppl. 3 SCC 606, relied on.
                                                                              E
      Collector of Central Excise, Bombay v. M/s. Parle Exports (P) Ltd.,
[1989] 1 SCR 354, partly overruled.

      Hindustan Aluminium Corporation Ltd. v. State of U.P., [1982) 1 SCR
129, distinguished.
                                                                              F
        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9968 of
1995.

     From the Judgment and Order dated 21.9.94 of the Allahabad High
Court in C.M.W.P. No. 984 of 1991.
                                                                              G
        D.V. Sehgal and R.B. Misra for the Appellant.

        S.K. Dhaon and Sunil Kumar Jain for the Respondent.

        The Judgment of the Court was delivered by                            H
    66                    SUPREME COURT REPORTS [1995] SUPP. 5 S.C.R.

A         B.P. JEEVAN REDDY, J. Leave granted.




B
           The only question arising in this appeal, preferred against the judg-
    ment of the Allahabad High Cou~t, is whether the respondent- unit
    qualifies as a "new unit" within the meaning of Explanation (i) to sub-sec-
    tion (2) of section 4-A of the U.P. Sales Tax Act. The ground upon which
                                                                                     ..
    the Divisional Level Committee declined to recognise it as a new unit is
    that a part of the machinery acquired by it for setting up its factory was
    purchased from Mis. Modi Steels who had purchased the said machinery
    earlier for their own use. A review application filed by the respondent was
    rejected by the State Level Committee. The writ petition filed by the
c   respondent has, however, been allowed by the High Court holding that in
    case M/s. Modi Steels had not put the said machinery to any use as
    contended by the respondent, the respondent-unit cannot be denied the
    eligibility certificate under section 4-A. The Bench purported to follow an
    earlier decision of the High Court in Amit Plastic Industly, Ghaziabad v.
D   Divisional Level Committee, Meemt, (1994) UPTC 121. The High Court has
    set aside the orders impugned in the writ petition and remitted the matter
    to the State Level Committee with a direction to re-examine the material
    on record and to record a categorical finding as tO whether or not the
    machinery purchased by the petitioner from M/s. Modi Steels was actually
    used in any other factory or workshop in India. If it is found that the said
E   machinery was not actually used in any factory or workshop before its
    installation in the respondent- unit, the High Court opined, the respondent-
    unit would be entitled to be treated as a new unit for the purpose of section
    4-A.

p          The respondent-unit had applied for issuance of an eligibility certifi-
    cate under section 4-A of the Act on the ground that it has set up a new
    unit for manufacturing rolling mill guide system equipment. It had acquired
    machinery worth about Rs. 25 lakhs, out of which machinery worth Rs.
    4,59,575 was acquired from M/s. Modi Steels under Bill No.244 dated April
    27, 1984. Admittedly, the said machinery was acquired by M/s. Modi Steels
G   for setting up an unit of its own but it is stated that it abandoned that idea
    later and sold the machinery to the respondent. The question is whether
    the respondent-unit cannot claim to be a "new unit" within the meaning of
    Explanation (i) to sub-section (2) of section 4-A on account of the fact that
    part of the machinery acquired by it was acquired for use in any other
H   factory or workshop in India.
     SfATE v. MORGARDSHAMMARINDIA LID. [B.P. JEEVAN REDDY, J.)             67

       Section 4-A provides for exemption from sales tax of goods manufac-       A
 tured by a new unit during the first five-year period, subject to the terms
 and conditions specified therein. Explanation (i), with which alone we are
 concerned herein, reads as follows :

         "Explanation. - For the purposes of this section,-
                                                                                 B
         (i) 'new unit' means a factory or workshop whether set up by a
         dealer already having an industrial unit manufacturing the same
         goods at any other place in the State or an industrial unit, manufac-
         turing any other goods on, or adjacent to, the site of an existing
         factory or workshop; but does not include :                             c
               (a) any factory or workshop using machinery, accessories or
               components already used or acquired for use in any other
               factory or workshop in India,

               (b) any factory or workshop established on, or adjacent to        D
               the site of an existing factory or workshop manufacturing the
               same goods, or

               ( c) any addition to or extension of an existing factory or
               workshop,"                                                        E
       An analysis of the definition yields the following features :

 (a) if a dealer is already having an industrial unit manufacturing particular
 goods and if he sets up another industrial unit manufacturing the same
 goods at any other place in the State, it would be a new unit. In other         F
 words, if a dealer establishes a new factory or workshop on or adjacent to
 his existing factory or workshop, and if the new factory or workshop is
 meant for manufacturing the very same goods as are manufactured in the
 existing factory or workshop, the newly established factory or workshop
 would not be a "new unit" within the meaning of the Explanation.
                                                                                 G
  (b) If, however, the new industrial unit is meant for manufacturing goods
· different from the goods manufactured in the existing factory or workshop,
  the new industrial unit (factory or workshop) can be located on the same
  premises or adjacent to the premises of the existing factory or workshop;
  it would be a "new unit" for the purposes of Explanation.                      H
    68                    SUPREME COURT REPORTS (199SJ SUPP. 5 S.C.R.

A   (c) If, however, any such new factory or workshop uses machinery, acces-
    sories or components "already used or acquired for use in any other factory
    or workshop in India", it does not and cannot qualify as a "new unit".

    (d) Any factory or workshop established on or adjacent to the site of an
    existing factory or workshop manufacturing same goods as are being
B   manufactured in the existing factory or workshop cannot be called a "new
    unit" for the purposes of the Explanation.

    (e) Any addition to or extension of an existing factory or workshop cannot
    and does not qualify as a new -unit.
c         The definition of "new unit" in Explanation (i) thus comprises of two
    clauses (mentioned as (a) and (b) above) to which three exceptions (men-
    tioned as (c), (d) and (e) above) are appended.

           The ground upon which the respondent-unit has been denied the
D   eligibility certificate under section 4-A by the appropriate authorities is that.
    part of the machinery used in setting up the respondent-unit was "acquired
    for use in any other factory or workshop in India" and, therefore, the
    respondent-unit does not qualify as a "new unit". According to the
    authorities, it is enough that the machinery or part of the machinery
    installed in the new factory or workshop is "acquired for use in any other
E   factory or workshop in India". It is immaterial, they say, whether such
    machinery was actually used or not in any other factory or workshop in
    India. Clause (a) does not contemplate an enquiry of the nature ordered
    by the High Court, they say. On the other hand, the contention of the
    respondent-unit, which has been upheld by the High Court is that unless
F   the machinery acquired for for use in any other factory or workshop in
    India is actually used in that other factory or workshop in India, the
    disqualification provided by clause (a) in the Explanation is not attracted.

         Section 4-A is an elaborate one. It contains several features and
  provides for several situations, with all of which we are not concerned
G herein. It is enough for the present purpose to note that a new unit starting
  production on or after first day of October, 1982 is entitled to exemption
  from sales tax provided the unit satisfies the requirements and conditions
  prescribed by the section. Inter alia it must furnish to the asses'Sing
  authority an eligibility certificate granted by the prescribed of-
H ficer/authority in accordance with the procedure specified. Explanation (i)
     SfATE v. MORGARDSHAMMAR INDIA LTD. [B.P. JEEVAN REDDY, J.J           69

to sub-section (2) defines the expression "new unit", which definition has A
already been set out by us hereinabove. One of the grounds upon which a
new factory or workshop is disqualified from being called a "new unit" is if
such factory or workshop uses "machinery, accessories or components
already used or acquired for use in any other factory or workshop in India."
It is relevant to notice that the clause uses both the expressions "already B
used" and "acquired for use" in any other factory or workshop in India.
Surely both the expressions cannot mean one and the same thing. It is a
disqualification if the new factory or workshop uses machinery/acces-
sories/components already used in any other factory or workshop in India.
it is equally a disqualification if it uses machinery/accessories/components
which were acquired for use in any other factory or workshop in India. C
When the clause uses both the said expressions simultaneously, it would
not be reasonable or proper to construe the words "acquired for use" as
meaning the same thing as "already used". Such a construction would make
the words "acquired for use" superfluous and a surplusage. No such inter-
pretation ought to be adopted by a Court. The words "acquired for use" D
must be understood in their plain and ordinary meaning. It is enough that
the machinery/accessories/components which are used in the factory or
workshop (claiming the benefit of section 4-A) are a<:quired for use in any
other factory or a workshop in India. It is not necessary to go further and
enquire whether that machinery/accessories/components were actually
used in any other factory or workshop in India.                              E

      In this case, admittedly, a part of the machinery installed in the
respondent's unit was acquired by M/s. Modi Steels for use in the factory
or workshop proposed to be set up by them. According to the certificate
issued by M/s. Modi Steels, their project did not materialise because it was    F
found to be not viable. For that reason, they say, the machinery purchased
by them for the said purpose was lying in packed and un-used condition
and was sold to the respondent. Thus, on their own showing, the
respondent's case is directly hit by clause (a) in the Explanation and is not
entitled to the exemption provided by section 4-A.
                                                                                G
       It is submitted by Sri S.K. Dhaon, learned counsel for the respondent,
that the aforesaid interpretation would not be a reasonable one and would
not be consistent with the object underlying section 4-A. It is submitted
that section4-A is devised to encourage new industries. Disqualifying an
unit from the benefit of the section on the mere ground that part of the H
    70                    SUPREME COURT REPORTS [1995) SUPP. 5 S.C.R.

A machinery installed in the unit was acquired by another person for setting
  up a unit, wl:ich in fact he never did, would not be consistent with the
  object underlying the section, says Shri Dhaon. We are unable to see any
  unreasonableness in the interpretation placed by us. All the words used in
  the clause have to be given their due meaning. None of them can be treated
  as a surplusage. It is not also possible to ignore the words expressly
B employed in the said clause or to explain them away on notions of one's
  own reasonableness. Indeed, there appears to be good reason behind the
  use of both the said expression in the clause. The Legislature, it is obvious,
  wanted to avoid an enquiry into the factual issue of actual user where the
  machinery (which expressions means machinery, accessories or com-
c ponents) is acquired for use in any other factory or workshop in India.
  Once it is shown that such machinery was acquired for use in any other
  factory or workshop in India, the Legislature presumes user - a case of
  conclusive presumption. The idea was to shut out enquiries of the type now
  ordered by the High Court. One person may say that though the machinery
D was acquired by him, he never installed it or used it; another may say that
  he only installed the machinery but did not use or operate it; a third person
  may say that the machinery was used only for trial run but not on a regular
  basis and so on and so forth. The authorities in charge of issuing eligibility
  certificate would thus be caught in endless factual disputes. The idea was
  to lessen the room for f~ctual controversies. It must be remembered that
E no unit has a right to claim exemption from tax as a matter of right. His
  right is only insofar as it is provided by section 4-A. While providing for
  exemption, the Legislature has hedged it with certain conditions. It is not
  open to the Court to ignore those conditions and extend the exemption.
  We must repeat that when the clause uses both the expressions "already
F used" and "acquired for use", they cannot be construed as meaning one and
  the same thing by a process of interpretation.

         It is suggested by the learned counsel for the respondent that section
    4-A must be literally construed to further the object underlying it. In case
  of any ambiguity, it is submitted, the construction favouring the assessee
G should be adopted. We cannot agree. Section 4-A provides for exemption
  from tax. It is rep~atedly held by this Court that a provision providing for
  an exemption or -an exception, as the case may be, has to be construed
  strictly. In Mangalore Chemicals and Fe1tilizers Limited v. Deputy Commis-
  sioner of Commercial Taxes, [1992) Supp. 1 SCC 21 which case dealt with
H an exemption notification, M.N. Venkatachaliah, J. (as the learned Chief
     SfATE v. MORGARDSHAMMAR INDIA LTD. [B.P. JEEVAN REDDY, J.)              71

Justice then was) and S.C. Agarwal, J. stated the principle in the following      A
words:

        "Shri Narasimhamurty again relied on certain observations in CCE
        v. Parle Exports (P) Ltd., [1989] 1SCC345: 1989 SCC (Tax) 84 in
        support of strict construction of a provision concerning exemp-
        tions. There is support of judicial opinion to the view that exemp- B
        tions from taxation have a tendency to increase the burden on the
        other unexempted class of tax payers and should be construed
        against the subject in case of ambiguity. It is an equally well known
        principle that a person who claims an exemption has to establish
        his case. Indeed, in the very case of Parle Exports (P) Ltd. relied C
        upon by Shri Narasimhamurty, it was observed : (SCC p. 357, para
        17)

              'While interpreting an exemption clause, liberal interpreta·
              tion should be imparted to the language thereof, provided no
              violence is done to the language employed. It must, however, D
              be borne in mind that absurd results of construction should
              be avoided.'

        The choice between a strict and a liberal construction arises only
        in case of doubt in regard to the intention of the legislature            E
        manifest on the statutory language. Indeed, the need to resort to
        any interpretative process arises only where the meaning is not
        manifest on the plain words of the statute. If the words are plain
        and clear and directly convey the meaning, there is no need for
        any interpretation. It appears to us the true rule of construction
        of a provision as to exemption is the one stated by this Court in          F
        Union of India v. Wood Papers Ltd., [1990) 4 SCC 256: 1990 SCC
        (Tax) 422 : (SCC p.260, para 4).

              'Truly speaking liberal and strict construction of an exemp-
              tion provision are to be invoked at different stages of inter-
              preting it. When the question is whether a subject falls in the G
              notification or in the exemption clause then it being in nature
              of exception is to be construed strictly and against the subject
              but once ambiguity or doubt about applicability is lifted and
              the subject falls in the notification then full play should be
              given to it and it calls for a wider and liberal construction ... .'" H
     72                   SUPREME COURT REPORTS (1995) SUPP. 5 S.C.R.

A          Following the said decision and after referring to certain English
     decisions expressing divergent opinions, a three-Judge Bench of this Court,
     of which one of us (B.P. Jeevan Reddy, J.) was a member, held in Novopan
     India Ltd., Hyderabad v. Collector of Central Excise and Customs,
     Hyderabad, [1994) Suppl. 3 SCC 606 thus :
B
             "16. We are, however, of the opinion that, on principle, the decision
             of this Court in Mangalore Chemicals - and in Union of ltidia v.
             Wood Papers referred to therein - represents the correct view of
             law. The principle that in case of ambiguity, a taxing statute should
             be construed in favour of the assessee-assuming that the said
c            principle is good and sound--does not apply to the construction
             of an exception or an exempting provision; they have to be con-
             strued strictly. A person invoking an exception or an exemption
             provision to relieve him of the tax liability must establish clearly
             that he is covered by the said provision. In case of doubt or
             ambiguity, benefit of it must go to the State. This is for the reason
 D
             explained in Mangalore Chemicals and other decisions, viz., each
             such exception/exemption increases the tax burden on other mem-
             bers of the community correspondingly. Once, of course, the
             provision is found applicable to him, full effect must be given to
             it. As observed by a Constitution Bench of this Court in Hansraj
:E           Gordhandas v. H.H. Dave, [1969) 2 SCR 253 : AIR (1970) SC 755
             that such a notification has to be interpreted in the light of the
             words employed by it and not on any other basis. This was so held
             in the context of the principle that in a taxing statute, there is no
             room for any intendment, that regard must be had to the clear
 F           meaning of the words and that the matter should be governed
             wholly by the language of the notification, i.e., by the plain terms
             of the exemption."

           The learned counsel for the respondent, however, relied upon the
     decision in Collector of Central Excise, Bombay v. Mis. Parle Exports (P)
 G   Ltd., [1989] 1 SCR 345 rendered by a Bench of this Court comprising
     Sabyasachi Mukharji and S. Ranganathan, JJ. The observations in Paras 17
     and 18 are particularly relied upon by the learned counsel :

             "17. How then should the Courts proceed? The expressions in the
 H           scheduled and in the notification for exemption should be under-
STATE v. MORGARDSHAMMAR INDIA LTD. [B.P. JEEVAN REDDY, J.]            . 73


   stood by the language employed therein bearing in mind the A
   context in which the expressions occur. The words used in the
   provision, imposing taxes or granting exemption should be under-
   stood in the same way in which these are understood in ordinary
   parlance in the area in which the law is in force or by the people
   who ordinarily deal with them. It is, however, necessary to bear in B
   mind certain principles. The notification in this case was issued
   under R. 8 of the Central Excise Rules and should be read along
   with the Act. The notification must be read as a whole in the
   context of the other relevant provisions. When a notification is
   issued in accordance with power conferred by the statute, it has
   statutory force and validity and, therefore, the exemption under C
   the notification is, as if it were contained in the Act itself. See in
   this connection the observations of this Court in Olient Weaving
   Mills (P) Ltd. v. Union of India, [1962) Supp 3 SCR 481 : AIR
   (1963) SC 98. See also Kailash Nath v. State of U.P., AIR 1957 SC
   790. The principle is well settled that when two views of a notifica- D
   tion are possible, it should be construed in favour of the subject
    as notification is part of a fiscal enactment. But in this connection,
   it is well to remember the observations of the Judicial Committee
   in Caroline M. Amiytage v. Fredelic Wilkinson, (1878) 3 AC 355
   at p. 370 that it is only, however, in the event of there being a real
   difficulty in ascertaining the meaning of a particular enactment that E
   the question of strictness or of liberality of construction arises. The
   Judicial Committee reiterated in the said decision at page 369 of
   the report that in a taxing Act provisions establishing an exception
   to the general rule of taxation are to be construed strictly against
    those who invoke its benefit. While interpreting an exemption F
    clause, liberal interpretation should be imparted to the language
    thereof, provided no violence is done to the language employed.
    It must, however, be borne in mind that absurd results of construc-
    tion should be avoided.

   18. In Hindustan Aluminium Corporation Ltd. v. State of Uttar              G
   Pradesh, [1982) 1 SCR 129 : AIR (1981) SC 1649 this Court
   emphasised that the notification should not only be confined to its
   grammatical or ordinary parlance but it should also be construed
   in the light of the con.text. This Court reiterated t_hat the expression
   shou~d be construed m a manner in which similar expressions have           H
    74                    SUPREME COURT REPORTS [1995] SUPP. 5 S.C.R.

A            been employed by those who framed relevant notification. The
             Court emphasised the need to derive the intent from a contextual
             scheme."

         We agree with the above statement of law except insofar as it states
   that where two views of the exemption notification are possible, it should
B be construed in favour of the subject since it is contrary to the decisions
   afore-mentioned including the three-Judge Bench decision in Novopan
   India Limited. It may be noted that this decision was referred to in
 . Mangalore Chemicals and Fe1tilizers and yet a slightly different principle
   enunciated. So far as decision in Hindustan Aluminium Corporation
c  (referred to in P01ie Exp01t), rendered by a Bench comprising Tulzapurkar
   and R.S. Pathak, JJ., is concerned, it only holds that the expression "metal"
   occurring in a notification issued under U.P. Sales Tax Act should be under-
   stood in its primary sense, i.e., in the form in which it is marketable as a
   primary commodity. The learned Judges held that the subsequent forms
D evolved from the primary form constituted distinct commodities
   marketable as such and must be regarded as new commercial commodities
   and not included within the four corners of the notification. This decision
   cannot therefor be understood as supporting the proposition enunciated in
   Parle Exp01ts with which we have disagreed. Be that as it may, the occasion
   for applying the said proposition arises only where there is "real difficulty,
E in ascertaining the meaning of a particular enactment" (statement in Parle
   Exp01ts). In the case before us, there is neither any ambiguity in the
   language nor does the clause in question present a real difficulty in
   ascertaining its meaning.

F        Sri Dhaon, learned counsel for the respondent, then contended that
  the words "acquired for use in any other factory or workshop in India" must
  be read and understood as "acquired for use in any other existing factory
  or workshop in India". The learned counsel says that it should be so read
  to give effect to the idea underlying the said clause. We are unable to agree.
  The very definition contained in Explanation (i) uses both the expressions
G "factory or workshop" and "existing factory or workshop" at more than one
  place which fact would be evident from a bare perusal of the said defini-
  tion. Wherever the Legislature wanted to refer to an existing factory or
  workshop, it has said so specifically. In such a case it is not possible to read
  the words "acquired for use is any other factory or workshop in India" to
H mean "acquired for use in any other existing factory or worksfiop in India".
            STATE v. MORGARDSHAMMAR INDIA LTD. (B.P. JEEVAN REDDY, J.)        75

     We see no reason to add any words to those employed in the clause. It A
     cannot also be said that such addition of word(s) is necessary to avoid an
     absurdity.

           Lastly, Sri Dhaon submitted that the respondent-unit has substantial-
     ly complied with the requirement of the said clause in the definition
     inasmuch as the value of the machinery acquired from M/s. Modi Steels is B
     only about Rs. 4.5 lakhs as against the value of the entire machinery at Rs.
     25 lakhs. In our opinion, there is no room for such a contention in view of

..   the specific language of clause (a). The clause uses all the three words -
     machinery, accessories or components. The use of the word "or" indicates
     that use of either of them, which are already used or acquired for use in C
     any other factory of workshop in India, would disqualify the factory or
     workshop from being called a "new unit" within the meaning of section 4-A.
     The clause does not say or indicate in any manner that only where the
     entire machinery installed in the unit (claiming to the new unit) has already
     been used or was acquired for use in any other factory or workshop in
     India, that the disqualification contained therein gets attracted. In the face D
     of the clear language of the clause, it is not possible to entertain the
     submission of substantial compliance urged by Sri Dhaon.

          For the above reasons, the appeal is allowed and the judgment of the
     High Court is set aside. The writ petition filed by the respondent in the     E
     High Court is dismissed. No costs.

     R.A.                                                      Appeal Allowed.