STATE OF U.P. AND ORS.versusM/S. MAHINDRA AND MAHINDRA LTD.

                     (2011) 5 S.C.R. 509


                 STATE OF U.P. AND ORS.                              A
                               v.
          M/S. MAHINDRA AND MAHINDRA LTD.
               (Civil Appeal No. 3405 of 2011)
                               IN
        Special Leave Petition (C) No. 2190 of 2008                  B
                        APRIL 20, 2011

           [DR. MUKUNDAKAM SHARMA AND
                  ANIL R. DAVE, JJ.)

     Jurisdiction: Jurisdiction of courts to issue a mandate to
legislate an Act and to make subordinate legislation in a
particular manner - Scope of - Assessment order - Safes
tax exemption not granted to respondent - Challenged - High
Court held that the wordings of central excise notification be       D
read into .the sales tax notification issued by the State
Government - Held: The exclusive domain of legislation is
with the legislature - Subordinate legislations are framed by
the executive - The judiciary has been vested with the power
to interpret the said legislations and to give effect to them - It   E
is a/ways appropriate for each of the organs to function within
its domain - It is inappropriate for the courts to issue a
mandate to legislate an Act and to make subordinate
legislation in a particular manner - In the instant case, High
Court had directed the subordinate legislation to substitute         F
wordings in a particular manner, thereby assuming to itself the
role of a supervisory authority, which is not a power vested in
the High Court - Exemption clauses should be strictly
interpreted - Since High Court exceeded its jurisdiction in
passing the said order and in issuing the directions for
inserting certain additional words into notification of exemption    G
issued by the Uttar Pradesh Government, the judgment by the
High Court and a/so by the Tribunal are set aside - Matter
remitted to the First Appellate Court for consideration afresh

                               509                                   H
    510      SUPREME COURT REPORTS                [2011] 5 S.C.R.


A - Sales tax - Interpretation of statutes - Administrative law -
    Doctrines/Principles of separation of powers - Legislation.

       Bhai Jaspal Singh and another v. Assistant
  Commissioner ofCommercial Taxes and others (2011) 1
B SCC 39; Commissioner of Central Excise, New Delhi v. Hari
  Chand Shri Gopal and others (2011) 1 SCC 236; Novopan
  India Ltd. Hyderabad v. Collector of Central Excise and
  Customs, Hyderabad 1994 Supp (3) SCC 606 - relied on.

      Supreme Court Employees' Welfare Association v.
C Union of India and another (1989) 4 sec 187; Bal Ram Bali
  and another v. Union of India (2007) 6 SCC 805; Municipal
  Committee, Patiala v. Model Town Residents Association
  and others (2007) 8 SCC 669; Mis. Narinder Chand Hem Raj
  and others v. Lt. Governor, Administrator, Union Territory,
D Himachal Pradesh and others (1971) 2 SCC 747 - referred
  to.

                         Case Law Reference:
          (1989) 4 sec 187          referred to        Para 8
E
          (2007) 6 sec sos          referred to        Para 8
          (2007) 8 sec 669          referred to        Para 8
          (1971) 2 sec 747          referred to        Para 8
F         (2011) 1 sec 39           relied on          Para 10

          (2011 > 1 sec 236         relied on          Para 10
          1994 Supp (3) sec 606 relied on              Para 10

G       CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    3405 of 2011.

         From the Judgment & Order dated 12.12.2006 of the High
    Court of Judicature at Allahabad, Lucknow Bench Lucknow in
    Writ Petition No. 1760 of 1992.
H
STATE OF U.P. v. MAHINDRA AND MAHINDRA LTD. 511


   Kavin Gulati, S.K. Dwivedi, Shail Kumar Dwivedi, Manoj             A
Kumar Dwivedi, Gunnam Venkateswara Rao for the Appellants.

     Dhruv Agarwal, Praveen Kumar for the Respondent.

    The following order of the Court was delivered
                                                                      8
                             ORDER

     1. Leave granted.

      2. We have heard learned counsel appearing for the
parties in this appeal, which is filed challenging the legality of    C
the judgment and order passed by the Allahabad High Court
in a writ petition filed by the respondent, praying for issuance
of a writ of mandamus to read in the exemption notification, the
words "Tractor Engine specifying Cubic Capacity (CC) of the
Tractor Engine not exceeding 1800 CC. The Government of               D
India had issued notification on 16th April, 1985, making an
amendment in the notification of the Government of India in
respect of the table annexed to the notification, inserting by way
of substitution the words "Tractors of Draw-Bar Horse Power
not exceeding 25". Another notification was subsequently issued       E
by the Government of India on 17th July, 1985, substituting the
words "Draw-Bar" with the words "Power Take-off Horse". Be
it stated here that all such notifications relate to the payment of
excise duty.
                                                                      F
     3. The Government of Uttar Pradesh, however, for the
purpose of levy of sales tax issued a notification on 12th
September, 1986, in which it was stated that under Section 4
of the Uttar Pradesh Sales Tax Act, 1948, Tractors with Power
Take-off Horse Power not exceeding 25 would stand exempted
from payment of tax under the Sales Tax Act, subject, however,        G
to the condition that the said tractors are exempted from
payment of Central Excise Duty.

     4. A show cause notice was issued to the respondent from
                                                                      H
    512      SUPREME COURT REPORTS                   [2011) 5 S.C.R.


A the Office of the Assistant Commissioner (Assessment)-1 Sales
  Tax, Lucknow, stating therein that at the time of survey made,
  and as per the literature made available it was found that the,
  horse power of the tractors of the respondent had been
  disclosed as 30 Horse Power. In the aforesaid show cause
B notice it was stated that in view of the facts mentioned in the
  said notice, the respondent may submit a reply as to why the
  return filed by the respondent would not be rejected and a
  provisional assessment order for the period in question may
  not be completed under Rule 41 (5) of the Rules.
c      5. Pursuant to the aforesaid show cause notice issued, a
  detailed reply was filed by the respondent. The Assessment
  Officer considered the entire records and, thereafter, by his
  order dated 21st March, 1992, passed an assessment order
  on the basis of the contents of the notification dated 12th
D September, 1986, denying exemption from payment of sales
  tax to the tractors of the respondent.

       6. After the aforesaid assessment order was passed, the
  respondent filed a writ petition before the Allahabad High Court
E with the following reliefs:

          "1. A Writ of certiorari or any other suitable Writ, Order of
          direction be issued to modify or amend, the notification so
          as to bring in conformity with the Central Government and
          conformity in respect of measuring strength or engine by
F         all manufacturer as contained in Annexure-1 to this Writ
          Petition.

          2. A Writ of mandamus directing the Opposite Party No.2
          to clearly state -in the said notification the basis of
G         exemption being cubic capacity of the Tractor Engine not
          exceeding 1800 CC for exemption for Sales Tax in place
          of 25 P.T.O.H.P., and directing the Opposite Party No.2
          to exempt the petitioners, tractor engine and specify the
          C.C. (Cubic Capacity) of the Tractor engine not exceeding
H         1800 C.C. And bring it at Par with Circular No.89/87/CE
STATE OF U.P. v. MAHINDRA AND MAHINDRA LTD. 513


    dated 01.03.1987 issued by Central Government to clear      A
    the anomaly and ambiguity in both the circulars, which
    creates discrimination among manufacturer of Fuel
    Efficient engines and rest ones, and refrain the Opposite
    Party No.2 to desist from recovering disputed Sales Tax
    of Rs.2,34,00,965.400 from April' 91 to Feb. 92 created     8
    by Annexure II dated 21.03.1991, and stay operation
    thereof."

      7. Interestingly, in the said writ petition there was no
challenge to the assessment order passed. Be that as it may, C
the Division Bench of the Allahabad High Court proceeded to
hear the aforesaid writ petition and by a detailed order passed
held that since the Central Government has by notification dated
28th February, 1987, replaced the word 25 PTOHP by the word
1800 CC and thereby exempted the tractor having capacity not
exceeding 1800 from Excise Duty, the same wordings, namely, D
Tractors with Power Take-off Horse Power not exceeding 25
should also be read as Tractors not exceeding 1800 CC, which
would stand exempted from levy of Sales Tax. The aforesaid
findings recorded by the High Court are under challenge in this
appeal.                                                          E

     8. The first contention of the counsel appearing for the
appellant is that there is no power vested on the High Court to
issue such a direction to the Executive to re-frame the
subordinate legislation, and that therefore the High Court F
exceeded its jurisdiction by issuing such directions in a field
where the High Court cannot and should not tread. In support
of the said contention, the counsel has relied upon the decision
of this Court in Supreme Court Employees' Welfare
Association v. Union of India and another (1989) 4 SCC ~87, G
Bal Ram Bali and another v. Union of India (2007) 6 SCC 805
and Municipal Committee, Patiala v. Model Town Residents
Association and others (2007) 8 SCC 669 as also the deci.sion
in Mis. Narinder Chand Hem Raj and others v. Lt. Governor,
Administrator, Union Territory, Himachal Pradesh and others H
    514       SUPREME COURT REPORTS                   [2011] 5 S.C.R.


A   (1971) 2 SCC 747. Wherein this Hon'ble court held as follows:

          "The power to impose tax is undoubtedly a legislative
          power. That power can be exercised by the legislature
          directly or subject to certain conditions, the legislature may
B         delegate that power to some other authority. But the
          exercise of that power whether by the legislature or by its
          delegate is an exercise of a legislative power. The fact that
          the power was delegated to the executive does not convert
          that power into an executive or administrative power. No
          court can issue a mandate to a legislature to enact a
c         particular law. Similarly no court can direct a subordinate
          legislative body to enact or not to enact a law which it may
          be competent to enact. [945 F-G] Article 265 of the
          Constitution lays down that no tax can be levied and
          collected except by authority of law. Hence the levy of a
D         tax can only be done by the authority of law and not by any
          executive order. Unless the executive is specifically
          empowered by law to give any exemption, it cannot say
          that it will not enforce the law as against a particular
          person. No Court can give a direction to a Government to
E         refrain from enforcing a provision of law".

         9. In Supreme Court Employees' Welfare Association v.
    Union of India and another (supra), in paragraph 51, this Court
    stated as follows:
F
          "51. There can be no doubt that no court can direct a
          legislature to enact a particular law. Similarly, when an
          executive authority exercises a legislative power by way
          of subordinate legislation pursuant to the delegated
          authority of a legislature, such executive authority cannot
G         be asked to enact a law which he has been empowered
          to do under the delegated legislative authority.

      1 O. Within our Constitution, we have specifically
  demarcated the ambit of power and the boundaries of the three
H organs of the Society by laying down the principles of
STATE OF U.P. v. MAHINDRA AND MAHINDRA LTD. 515


separation of powers, which is being adhered to for carrying A
out democratic functioning of the country. So far as the
legislation is concerned, the exclusive domain is with the
legislature. Subordinate legislations are framed by the
executive by exercising the delegated power conferred by the
Statue, which is rule making power. The judiciary has been B
vested with the power to interpret the aforesaid legislations and
to give effect to them since the parameters of the jurisdiction
of both the organs are earmarked. Therefore, it is always
appropriate for each of the organs to function within its domain.
It is inappropriate for the courts to issue a mandate to iegislate c
an Act and also to make a subordinate legislation in a particular
manner. In this particular case, the High Court has directed the
subordinate legislation to substitute wordings in a particular
manner, thereby assuming to itself the role of a supervisory
authority, which according to us, not a power vested in the High D
Court. It is also by now settled law that so far exemption clauses
are concerned, there should be strict interpretation of the same
as has been held by this Court repeatedly. Suffice will be to
refer to very recent decisions of this Court_ in Bhai Jaspal Singh
and another v. Assistant Commissioner of cbmmercial Taxes
and others (2011) 1 sec 39 and Commis~ioner of Central - E
Excise, New Delhi v. Hari Chand Shri Gopal and others
(2011) 1 sec 236. We would also extract a passage from the
decision of the Supreme Court in Novopan India Ltd.
 Hyderabad Vs. Collector of Central £xcise and Customs,
Hyderabad, reported at 1994 Supp (3) SCC at page 606, F
wherein this Court has held that:

     "16 .......... 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      G
     in a taxing statute, there is no room for any intendment,
     that regard must be had to the clear 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."                                                       H
    516     SUPREME COURT REPORTS                  [2011] 5 S.C.R.


A       11. During the course of the arguments, it was also brought
  to our notice that subsequent to the order of assessment, an
  appeal was filed, which came to be dismissed, subsequent to
  which a second appeal was filed before the Tribunal, which
  allowed the appeal giving effect to the orders of the High Court.
B Since, in our considered opinion, the High Court exceeded its
  jurisdiction in passing the aforesaid orders and in issuing the
  directions for inserting certain additional words into notification
  of exemption issued by the Uttar Pradesh Government, we set
  aside the impugned judgment and order passed by the High
c Court and also the order passed by the Tribunal. As the Tribunal
   had given effect to the order of the High Court, the order of the
  Tribunal is hereby set aside. Even otherwise Courts can always
  take notice of the subsequent events and developments that
   had taken place subsequent to the filing of the writ petition or
  filing of the special leave petition and it is also within the
0
  jurisdiction of this Court to pass consequential orders to give
  effect to the remedies available to the parties. Considering
  these facts and circumstances from the aforesaid angle, we
  after setting aside the order passed by the High Court and also
   by the Tribunal as also by the First Appellate Court, remit back
E the matter to the First Appellate Court to consider the matter
   de novo taking into consideration the notification as existing
   and which was issued on 12th September, 1986, and decided
  the matter without making any addition/alternation thereto.

F       12. However, counsel appearing for the respondent has
  submitted before us that it would be possible for the respondent
  to prove and establish that the tractor manufactured by the
  respondent is below 25 PTOHP. If certain exemption is
  available on the factual aspect, such benefit must be provided
G to an assessee but that is possible only when the respondent
  is able to prove and establish with cogent and reliable
  materials that he is entitled to the benefit of the exemption
  notification. Therefore, we allow the parties to lead additional
  evidence before the appellate authority, which shall be allowed
H to be filed within four weeks from their date of appearance and,
STATE OF U.P. v. MAHINDRA AND MAHINDRA LTD. 517


thereafter, the appellate authority shall proceed to decide the    A
matter de novo in the light of the records available and also in
the light of the exemption notification.

     13. This appeal stands allowed to the aforesaid extent as
indicated and leave the parties to bear their own costs. The       8
parties shall appear before the appellate authority on 2nd May,
2011, for obtaining further dates in the appeal. We also request
the appellate authority to take up the matter and dispose of the
same as expeditiously as possible, preferably within a period
of three months from the date of receipt of the additional
evidence, if produced by the parties.

D.G.                                          Appeal allowed. ·