VOLTAS LTD.versusSTATE OF GUJARAT

                         [2015] 5 S.C.R. 320


A                           VOLTASLTD.

                                  v.
                        STATE OF GUJARAT
B                  (Civil Appeal No. 2957 of 2007)

                           APRIL 8, 2015

             [H. L. DATTU, CJI, ARUN MISHRA AND
C                      AMITAVA ROY, JJ.]

          Gujarat Sa/es Tax Act, 1969 - s.55A - Notification
  dated 8. 10. 93 issued under- Entries 2 and 5- Composition
  rate of tax payable vis-a-vis Work Contract- For fabrication
D and installation of air-conditioning plants - Whether falls
  under Entry 2 and thereby taxable@ 15% or falls under Entry
  5 and thereby taxable @ 5% - Held: Assessee's works
  contract for fabrication and installation of water chilling plant
  would fall under Entry 5 and would be taxable @ 5% -
E Fabrication in terms of the work order in the instant case is
  distinctly independent, yet integral segment of the works
  contract contributing to the final physical form of the water
  chilling plant with the characteristics intended and hence, it
  cannot be construed to. be, synonymous to the installation
F thereof- The legislative intendment of s. 55A is to maintain
  a direct correlation between the composition rates of tax and
  the description of the corresponding work contract.
          Interpretation of Statutes - Interpretation of taxing
G statutes - Held: A taxing statute has to be interpreted from
  the plain and unambiguous expression used therein - There
  is no room for any intendment- Full effect must be given to
  every word used in the statute - No construction should be
H provided so as to render a part of it otiose or redundant - In
                                 320
         VOLTAS LTD. v. STATE OF GUJARAT                       321


case of any doubt, the construction beneficial to the subject A
is to be adopted.

       Evidence - Burden of Proof - Qua classification of
goods to detennine chargeability- Held: The burden in such
cases is on taxing authority.                              B

      Words and Phrases: 'Fabrication' and 'Manufacture' -
Meaning of, in the context of sales tax.

       Allowing the appeal, the Court
                                                                c
        HELD: 1. The competing entries requiring scrutiny
to ascertain the correct composition rate of tax payable
vis-a-vis the works contract involved are engrafted in the
Notification dated 8.10.1993 issued by the Government
                                                                0
of Gujarat in exercise of powers conferred by Section
55A of the Gujarat Sales Tax Act, 1969. A plain perusal
thereof would attest that thereby, in the circumstances
to be prescribed, a dealer can be left at his option to pay,
in lieu of the amount of tax payable, a lump sum by way         E
of composition, at the rate or rates as may be fixed by
the State Government, having regard to the incidence of
tax on the nature of the goods involved, in the execution
of total value of the works contract. Unmistakably,
therefore, the State Government while fixing the                F
composition rate of tax has to be mindful of the nature
of the works contract executed and by no means can be
oblivious thereof. Further, a composition rate of tax is in
lieu of the amount of levy otherwise payable by the dealer
under the Act. The scheme of composition as envisaged          G
by Section 55A, therefore, does not admit of any
synonymity with that of exemption as contemplated in
law. This pre-supposition of the High Court, as one of
the contributing factors, in concluding that the works          H
322         SUPREME COURT REPORTS                 [2015] 5 S.C.R.


A contract in question did fall within the framework of Entry
  No.2 of the Notification is apparently erroneous. [Para
      13] [335-E-H; 336-A-C]
             2. The work order in the present case, in clear
B     terms did enjoin that the design parameters pertaining
      to tonnage of refrigeration, final temperature of the water
      to be made available for the process of manufacturing
      pigments and the quantity of the chilled water essential
      therefore, were indispensable and were in addition to
C     the other specifications as offered by the appellant. The
      rigour of the insistence for the adherence to the design
      parameters, is patent also from the request of the
      customer requiring the appellant to provide it with the
      lay out detail, foundation drawing and other necessary
D     information essential for the erection of the water chilling
      plant. The exercise as a whole, as contemplated by the
      work order, thus was neither intended nor can be
      reduced to mere installation of the finally emerging
E     apparatus. The work order, noticeably did not refer to
      any readymade or instantly available devices, meeting
      the requirements of the customer, so much so to be only
      installed at its factory. Instead, the work order had been
      apparently tailor-made to the requirements, from which
F     no departure was intended or comprehended. It is in this
      perspective, that the word "fabrication" appearing in
      Entry No.5 of the Notification assumes a decisive
      significance. [Para 14) [336-D-H]

G           3. The legislative intendment entrenched in
      Section 55A of the Act, to maintain a direct correlation
      between the composition rates of tax as the Notification
      would reveal and the description of the corresponding
      works contract is patent. The word "fabrication" had not
H
         VOLTAS LTD. v. STATE OF GUJARAT                      323


been applied in the works contract for installation of air-    A
conditioners and A.C. coolers contained in Entry No.2
of the Notification. The author of the said Notification,
however, did consciously include the expression
"fabrication" while describing the works contract
enumerated in Entry S thereof. Having regard to the            B
inseparable interdependence between the description
of a works contract and the corresponding composition
rate of tax, none of the inherent components of the
works to be executed, can either be ignored or                 C
disregarded for identifying the correct composition rate
of the levy under the Act. Any- other approach, could
tantamount to doing violence not only to the legislative
purpose conveyed by Section SSA, but also the
language of its yield i.e. the Notification seeking to         o
promote the statutory end. Viewed in that context, mere
omission of the expressions "air-conditioners" and "A.C.
coolers" in Entry No.S, would not be of any definitive
consequence. The words plant and machinery, applied
in Entry S, are otherwise compendious enough to                E
include air-conditioners and A.C. coolers, if the works
contract involved require fabrication as well as
installation thereof. [Para 1S] [337-A-F]

       4. The process of fabrication conceptually would F
involve a lay out for the ultimate device to be installed,
preceded by a design of the parameters prescribed,
configuration of the resultant components, and
integration thereof to structure the ultimate mechanism
or product. Installation thereof would be a subsequent G
step to finally position the plant, to complete the works
contract. As fabrication in terms of the work order in the
instant case, is a distinctly independent yet integral
segment of the works contract, contributing to the final H
324       SUPREME COURT REPORTS                [2015] 5 S.C.R.

A physical form of the water chilling plant with the
  characteristics intended, it cannot be construed to be,
  synonymous to the installation thereof. [Para 18) [338-
  A-C]

B     Aiyar's Advanced Law Lexicon (Vol.II}, 3rd Edition
      2005; The Oxford Dictionary- referred to.

         5. In the face of the design parameters insisted
  upon in the work order and consequential process of
c fabrication involved to cater thereto, the works contract
  involved squarely falls within the ambit of Entry No.5 of
  the Notification. The margin of difference in rates of tax
  as prescribed by the Act compared to those mentioned
  in the Notification ipso facto does not detract from this
D conclusion. This consideration per se cannot override
  the decisive characteristics of the works contract
  otherwise unequivocally spelt out by the work order.
  [Para 19) [338-G-H; 339-A]

E        6. "In a Taxing Act one has to look merely at what
  is clearly said. There is no room for any intendment. It is
  trite as well that in a case of reasonable doubt, the
  construction most beneficial to the subject is to be
  adopted. The underlying principle is that the meaning
F and intention of a statute must be collected from the plain
  and unambiguous expression used therein rather than
  from any notion that may be entertained by a Court which
  may appear to be just and expedient. [Para 20) [339-C-E]
G      Income Tax Officer, Tuticorin vs. T.S.Devinatha Nadar
       & Ors. (1968) 68 ITR 252; Commissioner of Income
       Tax-Ill vs. Calcutta Knitwears, Ludhiana (2014) 6 SCC
       444; Commissioner of Income Tax (Central)-/, New
      -Delhi vs. Vatika Township Pvt. Ltd. 2015 (1) SCC 1-
H
      relied on.
           VOLTAS LTD. v. STATE OF GUJARAT                   325


     Cape Brandy Syndicate v. Inland Revenue                  A
     Commnrs. (1921) 1 KB 64; Sussex Peerage case
     (1844) 11 C1 & Fin 85: 8 ER 1034(HL) - referred to.

         7. It is the cardinal principle of interpretation
     not to brush aside a word used in a statute or in a      B
     Notification issued under a statute and that full
     effect must be given to the every word of an
     instrument. No construction to a legislation ought
     to be provided so as to render a part of it otiose or
     redundant. [Paras 22 and 23) [340-E-G]]                  C

     Maharashtra University of Health Sciences & Ors. vs.
     Satchikitsa Prasarak Manda/ & Ors. 2010 (3)
     SCR 91 = (2010)3 SCC 786; South Central Railway
     Employees Co-operative Credit Society Employees          D
     Union, Secundrabad vs. The Registrar of Co-operative
                                      =
     Societies & Ors. 1998 (1) SCR 85 (1998) 2 SCC 580
     - relied on.

      8. Qua the issue of classification of goods to E
determine the chargeability thereof and the rates of levy
applicable, the burden of proof is on the taxing authority
to demonstrate that a particular class of goods or item
in question is taxable in the manner claimed by them and
mere assertion in that regard is of no avail. [Para 21) 340- F
CJ
     U.0.1. & Ors. vs. Garware Ny/ones Ltd. etc. 1996 (5)
                       =
     Suppl. SCR 629 (1996) 10 SCC 413; and HPL
     Chemicals Ltd. vs. Commissioner of Central Excise,      G
                                          =
     Chandigarh 2006 (1) Suppl. SCR 125 (2006) 5 SCC
     208 - relied on.

     9. The Notification in the instant case being
apparently statutory in nature is akin to subordinate        H
326      SUPREME COURT REPORTS                   [2015] 5 S.C.R.


A legislation, to actualize and advance the legislative intent
  engrafted in Section 55A. It not only owes its existence
  to the Act but would also be amenable to the cardinal
  principles of interpretation. [Para 23] [340-H; 341-A]

B        10. Any endeavour to drag the works contract
  involved within the framework of Entry No.2 would be
  repugnant to the basic principles of interpretation of
  statutes and of subordinate legislation like the statutory
  Notification under Section 55A of the Act. To exclude the
C work of fabrication from the works contract as per the
  work order, would render it (works contract) truncated
  to a form, not intended by the customer. This would
  strike as well, at the root of the mandate of correlation of
  a works contract and the corresponding composition
0
  rate of tax as envisaged by Section 55A of the Act and
  the Notification issued thereunder. [Para 24] [341-B-C]

         11. Therefore, the appellant's works contract for
  fabrication and installation of water chilling plant would
E fall under Entry 5 of the Schedule to the Notification dated
  18.10.1993 issued under Section 55A of the Act and
  would be taxable at the rate of 5% as prescribed thereby.
  [Para 26] [341-F]
F     Sanden Vikas (India) Ltd. V. Collector of Central Excise,
      New Delhi (2003) 4 SCC 699:2003 (2) SCR 608 - held
      inapplicable.

                      Case Law Reference
G
        2003 (2) SCR 608         held inapplicable      Para 10
        (1968) 68 ITR 252        relied on              Para 20
        (2014) 6 sec 444         relied on              Para 20
        201s (1) sec 1           relied on              Para 20
H       (1921) 1 KB 64           referred to .          Para 20
         VOLTAS LTD. v. STATE OF GUJARAT                         327


     (1844) 11 C1 & Fin 85:        referred to      Para 20       A
     8 ER 1034(HL)
     1996 (5) Suppl. SCR 629       relied on        Para 21
     2006 (1) Suppl. SCR 125       relied on        Para 21
     2010 (3) SCR 91               relied on        Para 22
     1998 (1) SCR 85               relied on        Para 22       B
     CIVILAPPELLATE JURISDICTION: Civil Appeal No.
2957of2007

       From the Judgment and Order dated 04.09.2006 of the
High Court of Gujarat atAhmedabad in Sales-Tax Reference
                                                                 c
No. 1 of 2004 with Special Civil Application No. 12508 of 2002

      Arvind P. Datar, Pratap Venugopal, Surekha Raman,
Supriya Jain (for K. J. John & Co.), for the Appellant.
                                                                 D
        Madhvi Diwan, Jesal, Puja Singh (for Hemantika Wahi),
for the Respondent.

       The Judgment of the Court was delivered by
                                                                  E
        AMITAVA ROY, J. 1. The oft encountered debate on
the extent of tax liability based on the classification of the
determinants of a levy in law seeks judicial scrutiny in tha
attendant factual conspectus. The appellant being aggrieved
by the determination made by the High Court of Gujarat on the F
issue common to a reference under Section 69 of the Sales
Tax Act, 1969 (for short hereinafter referred as to as the "Act")
being Sales Tax Reference No.1/2004 and its appeal, i.e.
Special Civil Application No. 12508/2002, against it, seeks
redress against the judgment and order dated 4.09.2006 to G
that effect.

       2. We have heard the learned counsel for the parties.

       3. The indispensable skeletal facts introduce the H
328          SUPREME COURT REPORTS               [2015] 5 S.C.R.


A appellant, Mis. Voltas Ltd. as a company incorporated under
    the Companies Act, 1956 engaged amongst others in the
    business of execution of jobs design, supply and installation
    of air-conditioning plants construed to be indivisible works
    contracts. It is a registered dealer under the Act. By a
B communication dated 22.10.1993 of M/s. Anupam Colours and
  . Chemicals Industries, Bombay, an order was placed with it for
   water chilling plant at its factory at Vapi. The basic design
   parameters were enumerated in the work order as hereunder:

C "1.Tonnage of Refrigeration                           11 TR

      2. Final temperature or chilled                   5 to 6°C
      water to be made available
      for our process.
D
      3.Quantity of chilled water                       12,000
      liters( 5 to 6° C) required for our                liters"
      process in about 10 hours.

E Other specifications pertaining to the water chilling plant were
  advised to be in conformity with the assessee's offer, as
  referred to therein. The work order insisted on the requirement
  of chilled water to be used directly for its process of
  manufacturing pigments with the assertion that sufficient
F precautions be taken to ensure that chilled water at 5 to 6
  degree centigrade is available for such process. The letter
  emphasized as well that the assessee would provide the
  customer with the lay-out details, foundation drawing and other
  necessary information required for the erection of the plant.
G The essential segments of the works contracts involved, as
  would be eventually relevant for the adjudicative exercise
  underway, were thus specified with distinct details in the work
  order.
H
                 VOLTAS LTD. v. STATE OF GUJARAT                   329
                         [AMITAVA ROY, J.]

       4. The Act which is a legislation to consolidate and A
amend the law relating to the levy of tax on the sale or purchase
of goods in the State of Gujarat has set out in Part-A of
Schedule II-A thereof, the rates of the impost on the sale of
goods involved in the execution of the works contracts, the
relevant excerpt whereof is quoted as under:                      B
 ISi.NO.-T ~on ci00fk5 contract : Enb)t NJ. in F~g.dcr
 I           '                            Sched.de-   rate citax
 i           I                            llAofthe
 f-- - J - -         - -- - Pd                                     c
   1.   i lrstalaion  of ar-   01                     18%
 1
         I condtiorers           ard AC.
 't          coolers ard fer repci rs i
             1


 I           ti-erect.
             1



 ! 2.      i Funiture ard flXti..res ! 104            8%
           I partitiO'ls incll.dirg rontracts I ·                   D
           .                                  I
 i         i fer intericr cEcorciion ard !
 ;         ! repars trereci                   !
 I 3.        Fcbricciion aid installatiC1l ; 120      8%
 ,           of lifts or ele.tators or :
 I           escalators aid for repars
 I           ti-erect                         ,
                                                                    E
 I 4.      I Fooncction aid nstanatiO'l . 39          8%
 I           of part aid rra::hirery ard i
             1

 I       1   repars trereci                   ;
 r 5---~-r Corstn.dion of bcx:liElS al i 128(5)       4%
           i dlassis ci M>ter Vetiicles '                           F
           I
             including trree v.trelers
      ____ !_and_ft>r ~~rs ~f __ __
 ; 6.      i Ship      bl.ildng incll.dirg 186        4%
           : construcliO'l ci bages,
           ! Ferries Tugs Travv1ers or
                                                                   G
         1   Drecgers and for repars :
           'trereci

    5. Section 55-A of the Act dwells on the scheme of
composition of tax whereunder a dealer as referred to therein
                                                                   H
330       SUPREME COURT REPORTS                    [201S] S S.C.R.


A and in the circumstances and subject to such conditions as
  may be prescribed, is left with the option to pay in lieu of the
  amount of taX-leviable from him under Section 7 or 8 in respect
  of any period, a lump sum by way of composition at the rate/
  rates, as may be fixed by the State Government by notification
B in the Official Gazette, having regard to the incidence of tax on
  the nature of the goods involved in the execution of total value
  of the works contract. Apt it would be to quote Section SSA as
  well for ready reference:
c     "SECTION SSA. COMPOSITION OF TAX.

      (1) The Commissioner may, in such circumstances and
      subject to such conditions as may be prescribed, permit
      every dealer referred to in sub-clause (f) of clause (10)
D     of section 2 to pay at his option in lieu of the amount of
      iax (including additional tax) leviable from him under
      section 7, (or 8) in respect of any period, a lump sum by
      way of composition at the rate or rates as may be fixed
      by the State Government by Notification in the Official
E     Gazette having regard to the incidence of tax on the nature
      of the goods involved in the execution of total value of the
      works contract.

       (2) The provisions of sections [13,S1 and SS] shall not
F      apply to a dealer who opts for composition of tax under
       sub-section (1).]"
  Pursuant to this provision, and as empowered thereby, the
  Government of Gujarat vide the notification dated 18.10.1993
G (for short hereinafter referred to as the Notification) did fix the
  rate of composition payable by such dealer (s) in lieu of the
  amount of tax otherwise leviable un~er the Act and as
  contemplated in the said statutory provisiQn. As the stand-o~
H centers around the rate of composition so.fixed, essential jt
          VOLTAS LTD. v. STATE OF GUJARAT                              331
                  [AMITAVA ROY, J.]

would be to set out the table of relevant entries to be A
immediately adverted to:
 181".No.--j oE!SCfii:>tion ciY.Orks oontract -    [ Rate of . . i
 !        I                                        1 CoITlX>Sltion I

 ; 1.     i Works ccntract for civil werks like    ! 2%
                                                                        B
          j constructiai of b.Jilclings, bricges or I
          I roads, ard fer repairs thereci            i
 I 2.     'Installation ofair-caidtionersand ; 15%
 '        I AC. Coolers                               i
     3.   ; FLmiture aid fixtures, Partitiais         I
                                                        5%              c
            including cortrcds for irterior
            decaation                                              i
 14.        Fabrication ard installation of lifts er i 10%         i
                                                                   I
            elevators or escalators                   I            I
                                                                   I

     5.     Eal::>rication ard installation of 12lait 15%               D
                                                                   I
            and mochinerv                                          I

                                                                   I
 I   6.     Constrt.dion of bodes ai chassis            3%
          : of meter vetlicles includng three
 I        ! wheelers

 J   7.     Ship b.Jildi~, inclu::ling constrt.dion 2%             '
                                                                   I    E
            of oorges, ferries tugs, trawers or
          : drecbers                                               I
     a      Works caitracts other than these 112%
                                                      I
                                                                   I
                                                                   I
            mentiaied al::>ove                                     I

                                                                 F
       6. The recorded facts demonstrate that the appellant
being under the impression qua the works contract ordered
vide letter dated 22.10.1983 of Mis. Anupam Colour and
Chemicals that it would attract the rate of composition
prescribed against Entry No.5 hereinabove i.e. fabrication and G
installation of plant and machinery and not 15% against Entry
No.2 i.e. installation of air-conditioners and AC coolers or 12%
against Entry No.8 i.e. works contracts other than those
mentioned, filed an application before the Deputy
Commissioner of Sales Tax (Legal), Gujarat under Section 62 H
332       SUPREME COURT REPORTS                    [2015] 5 S.C.R.

A of the Act and insisted that the works contract involved came
    within the purview of Entry No.5 attracting the composition rate
    of tax at 5% only. The said revenue authority by its order dated
    16.10.1996 however rejected the plea of the appellant and
    instead held that the works contract was covered by Entry No.2
B as the assessee had to air-condition the plant to be erected
    by it. The margin of difference in the composition rates
    compared to the rates of tax for the identical works contract
    as catalogued in the Schedule to the Act did also weigh with
C the revenue authority in arriving at this conclusion.
          7. The appellant-assessee being dissatisfied did appeal
    against this finding before the Gujarat Sales Tax Tribunal,
   Ahmedabad (for short hereinafter referred to as the "Tribunal")
    which was registered as Appeal No. 16/1996. In course of the
o . regular assessment for the Assessment Year 1993-94, the
    concerned Sales Tax Officer, pursuant to the decision rendered
    by the Deputy Commissioner of Sales Tax on 16.10.1996,
   assessed the appellant by applying the composite rate of 15%
   for the works contract involved.
E
         8. The appellant thus preferred an appeal against this
  assessment order before the Assistant Commissioner of Sales
  Tax, Ahmedabad and having failed before this forum did take
  the issue before the Tribunal in Second Appeal No.97/2001.
F These two appeals were also dismissed by the Tribunal vide
  its judgment and order dated 2.12.2002 whereafter the
  appellant invoked the writ jurisdiction of Gujarat High Court
  registered as Special Civil Application No. 12508/2002 which
  to reiterate, have been, by the impugned decision, disposed
G of along with Sales Tax Reference No.1/2004 laid by the Tribunal
  before it under Section 69 of the Act referring the following
  question of law:

      "Whether on the facts and in the circumstances of the
H     case, the Tribunal was right in law in holding that the
          VOLTAS LTD. v. STATE OF GUJARAT                            333
                  [AMITAVA ROY, J.]

   appellant's works contract for fabrication and installation        A
   of air-conditioning plants falls under Entry 2 and,
   therefore, taxable at the rate of 15% and not under Entry
   5 under which it is taxable at the rate ·of 5% of the
   Schedule to the notification dated 18.10.93 issued under
   Section 55A of the Gujarat Sales Act, 1969?"                       B

        9. The High Court has answered the question referred
in the affirmative thus sustaining the determination made by
the revenue authorities/fora and the learned Tribunal declaring
that the appellant's works contract for fabrication and for C
installation of air-conditioning plant did fall under Entry 2 of the
Notification and was taxable at the composition rate of 15%.

        10. As the decision of the High Court assailed herein
would disclose, in its view, the air-conditioning systems are        D
classified according to their construction and operating
characteristics and that it would be incorrect to differentiate
between a central air-conditioning system and a room air-
conditioner on the basis that the installation of air-conditioning
plant requires preparation of plant whereas no such exercise         E
is to be undertaken in case of installation of window air-
conditioner etc. This is more so as the basic components
applied in the manufacture of a air-conditioning plant, room
air-conditioner or split air-conditioner are almost similar with     F
difference in size and are not drastically different. The
appellant's plea that in central air-conditioning system,
fabrication has to be undertaken requiring preparation of plant
etc. and that thus the central air-conditioning system has to be
treated differently from a room air-conditioner or window air-       G
conditioner etc. was not accepted because, according to the
High Court, even in a room air-conditioner or window air-
conditioner or split air-conditioner or AC cooler, elevation and
lay out of the area requiring conditioning, has to be taken into
consideration. The appellant's contention that Entry 5 dealt with    H
334         SUPREME COURT REPORTS                    [2015] 5S.C.R.

A all kinds of fabrication and installation of all kinds of plant and
  machinery and that there was no reason to exclude the
  installation of air-conditioning plant therefrom was negatived.
  The High Court was of the view that the composition scheme
  ought to be regarded as an exemption reprieve and thus
B needed to be construed strictly. Reliance was placed on the
  decision of this Court in Sanden Vikas (India) Ltd. \/. Collector
  of Central Excise, New Delhi (2003) 4 SCC 699 which held
  with reference to a particular entry in an exemption notification
C under the Central Excise Tariff Act, 1985 that the air-conditioner
  kit of a car did fall within the meaning of air-conditioners. It
  rejected the proposition that in common parlance air-
  cond itioner, room air-conditioner, window air-conditioner, A. C.
  cooler, air-conditioning plant etc. were differently known and
o thus installation of air-conditioning plant would fall within Entry
  No.5.

              11. Mr. Datar, the learned senior counsel for the
      appellant has assertively urged that having regard to the
E     inalienable and essential constituents of the works contract
      as per the work order, fabrication as well as the installation of
      the water chilling plant were distinctly different items of works
      and thus the appellant was taxable at the composition rate of
      5% against Entry No.5 of the Notification. Referring to the
F     work order dated 22.10.1993 in particular, the learned senior
      counsel has maintained that the water chilling plant of the
      customer was to be configured in conformity with the design
      parameters referred to therein and not on readymade
      specifications on the election or discretion of the appellant-
G     assessee. According to Mr. Datar the design parameters
      prescribed by the customer, to cater to its requirement amongst
      others of the temperature of the chilled water and the volume
      thereof to be used for its process of manufacturing pigment
H     did assuredly involve design and fabrication of the essential
      composition of the system which by no means could be
         VOLTAS LTD. v. STATE OF GUJARAT                       335
                 [AMITAVA ROY, J.]

equated with the installation thereof simplicitor as the end A
device. That the customer was persistently particular on the
adherence to its prescribed design parameters as is apparent
from the work order, demonstrates that the works contract, in
any view of the matter, cannot be drawn within the contours of
Entry2 of the Notification, he urged.                          B

        12. As against this, Ms. Madhvi Diwan, the learned
counsel for the Revenue has argued that as the supply of the
water chilling plant as per the works contract involved for all
practicable purposes does not envisage any process of C
fabrication, the appellant is liable to be taxed at the
composition rate of 15% . .According to her, the basic and
functional components of the water chilling plant being identical
to that of an air-conditioning plant, the appellant's plea of D
application of 5% composite rate prescribed against Entry
No.5 of the Notification is wholly misplaced and thus no
interference with the impugned judgment and order is called
for. Reliance was placed on the decision of this Court ir.
Sanden Vikas (India) supra.                                       E

        13. The rival assertions have received our due
consideration. The competing entries requiring scrutiny to
ascertain the correct composition rate of tax payable vis-a-vis
the works contract involved are engrafted admittedly in the F
Notification issued by the Government of Gujarat in exercise
of powers conferred by Section 55A of the Act. Logically thus,
the interpretation necessitated by the rival orientations ought
to be in furtherance of the underlying objective of the said
provision. A plain perusal thereof would attest that thereby, in G
the circumstances to be prescribed, a dealer can be left at his
option to pay in lieu of the amount of tax payable, a lump sum
by way of composition, at the rate or rates as may be fixed by
the State Government having regard to the incidence of tax on
the nature of the goods involved in the execution of total value H
336        SUPREME COURT REPORTS                     [2015) 5 S.C.R.

A of the works contract. Unmistakably, therefore, the State
  Government while fixing the composition rate of tax has to be
  mindful of the nature of the works contract executed and by no
  means can be oblivious thereof. Further, a composition rate
  of tax is in lieu of the amount of levy otherwise payable by the
B dealer under the Act. The scheme of composition as
  envisaged by Section SSA therefore in our comprehension
  does not admit of any synonymity with that of exemption as
  contemplated in law. This pre-supposition of the High Court
C as one of the contributing factors in concluding that the works
  contract in question did fall within the framework of Entry No.2
  of the Notification is apparently erroneous.

            14. As adverted to hereinabove, the work order in clear
    terms did enjoin that the design parameters pertaining to
D   tonnage of refrigeration, final temperature of the water to be
    made available for the process of manufacturing pigments and
    the· quantity of the chilled water essential therefor were
    indispensable and were in addition to the other specifications
E   as offered by the appellant. The rigour of the insistence for the
    adherence to the design parameters is patent also from the
    request of the customer requiring the appellant to provide it
    with the lay out detail, foundation drawing and other necessary
    information essential for the erection of the water chilling plant.
F   ThE~ exercise as a whole as contemplated by the work order
    thus was neither intended nor can be reduced to mere
    installation of the finally emerging apparatus. The work order
    noticeably did not refer to any readymade or instantly available
    devices, meeting the requirements of the customer so much
G   so to be only installed at its factory. Instead, the work order
    had been apparently tailor-made to the requirements from
    which no departure was intended or comprehended. It is in
    this perspective that the word "fabrication" appearing in Entry
H   No.5 of the Notification assumes a decisive significance.
          VOLTAS LTD. v. STATE OF GUJARAT                             337
                  [AMITAVA ROY, J.]

         15. The legislative intendment entrenched in Section          A
55A of the Act to maintain a direct correlation between the
composition rates of tax as the Notification would reveal and
the description of the corresponding works contract is patent.
Understandably, the word "fabrication" had not been applied
in the works contract for installation of air-conditioners and A.C.    B
coolers contained in Entry No.2 of the Notification. The author
of the said Notification, however, did consciously include the
expression "fabrication" while describing the works contract
enumerated in Entry 5 thereof. Having regard to the                    C
inseparable interdependence between the description of a
works contract and the corresponding composition rate of tax,
none of the inherent components of the works to be executed
can either be ignored or disregarded for identifying the correct
composition rate of the levy under the Act. Any other approach         D
could tantamount to doing violence not only to the legislative
purpose conveyed by Section 55A but also the language of its
yield i.e. the Notification seeking to promote the statutory end.
Viewed in that context, mere omission of the expressions "air-
conditioners" and "A.C. coolers" in Entry No.5 would not be of         E
any definitive consequence. The words plant and machinery
applied in Entry 5 are otherwise compendious enough to
include air-conditioners andA.C. coolers, ifthe works contract
involved require fabrication as well as installation thereof.
                                                                       F
      16. The word "fabrication" as defined in the Aiyan's
Advanced Law Lexicon (Vol.II), 3'd Edition 2005 is "to
manufacture".
      17. The Oxford Dictionary defines the word "fabrication" G
to mean to construct or manufacture an industrial product.

       18. The word "manufacture" as per the Aiyan's
Advanced Law Lexicon (Vol.I I) in its plainest form and shorn of
other details is the process of transforming or fashioning of H
338        SUPREME COURT REPORTS                     [2015] 5 S.C.R.


A raw materials into a change of form for use. The process of
   fabrication therefore conceptually would involve a lay out for
   the ultimate device to be installed, preceded by a design of
   the parameters prescribed, configuration of the resultant
   components, and integration thereof to structure the ultimate
B mechanism or product. Installation thereof would be a
   subsequent step to finally position the plant to complete the
   works contract. As fabrication in terms of the work order in the
 · instant case is a distinctly independent yet integral segment
C of the works contract contributing to the final physical form of
   the water chilling plant with the characteristics intended, it
   cannot be construed to be, synonymous to the installation
   thereof.
             19. The High Court, as the impugned judgment would
D   exhibit, had confined itself wholly to the components of various
    air-conditioning devices available and the range of the use
    thereof and in our estimate had missed the significant aspect
    of "fabrication" integrally involved in the works contract to supply
E   the water chilling plant with the design parameters stipulated
    by the customer. The High Court did adopt a general approach
    vis-a-vis the air-conditioning devices commercially available
    in different forms dehors the singular factual aspects of the
    work order constituting the works contract. The High Court,
F   thus, in our view, by overlooking the component of fabrication
    in the works contract opined that the same was within the
    purview of Entry No.2 and not Entry No.5. The description of
    the works contract, to reiterate, being of determinative bearing
    for ascertaining the composition rate of tax, we are of the
G   unhesitant opinion, in the face of the design parameters
    insisted upon in the work order and consequential process of
    fabrication involved to cater thereto, that the works contract
    involved squarely falls within the ambit of Entry No.5 of the
H   Notification. The margin of difference in rates of tax as
    prescribed by the Act compared to those mentioned in the
         VOLTAS LTD. v. STATE OF GUJARAT                       339
                 [AMITAVA ROY, J.)

Notification ipso facto does not detract from this conclusion. A
This consideration per se cannot override the decisive
characteristics of the works contract otherwise unequivocally
spelt out by the work order.

        20. The primary canon of interpretation of a taxing B
statute hallowed by time is underlined by the classic statement
of ROWLATI,J. in Cape Brandy Syndicate v. Inland Revenue
Commnrs. (1921) 1 KB 64 at p. 71 as extracted hereunder:

  "In a Taxing Act one has to look merely at what is clearly    c
  said. There is no room for any intendment. There is no
  equity about a tax. There is no presumption as to a tax.
  Nothing is to be read in, nothing is to be implied. One
  can only look fairly at the language used."
                                                                D
It is trite as well that in a case of reasonable doubt, the
construction most beneficial to the subject is to be adopted.
The underlying principle is that the meaning and intention of a
statute must be collected from the plain and unambiguous
expression used therein rather than from any notion that may E
be entertained by a Court which may appear to be it just and
expedient. Even prior in point of time, TINDAL, CJ in Sussex
Peerage case (1844) 11 C1 & Fin 85: 8 ER 1034(HL) had
propounded thus:
                                                                F
         "If the-words of the statute are in themselves precise
    and unambiguous, then no more can be necessary than
    to expound those words in their natural and ordinary
    sense. The words themselves do alone in such cases
    best declare the intent of the law-giver."                  G

These views have with time resonated in various judicial
pronouncements with unambiguous approval of this Court as
well amongst others in Income Tax Officer, Tuticorin vs.
T.S.Devinatha Nadar & Ors. (1968)68 /TR 252 and very H
340       SUPREME COURT REPORTS                    (2015] 5 S.C.R.


A recently in Commissioner of Income Tax-Ill vs. Calcutta
  Knitwears, Ludhiana (2014) 6 SCC 444 and Commissioner
  of Income Tax (Central)-/, New Delhi vs. Vatika Township Pvt.
  Ltd. 2015 (1) SCC 1. A plethora of decisions in this regard,
  available though, we do not wish to burden the instant narration
B therewith.

          21. Qua the issue of classification of goods to determine
  the chargeability thereof and the rates of levy applicable, it is
  no longer res-integra that the burden of proof is on the taxing
C authority to demonstrate that a particular class of goods or
  item in question is taxable in the manner claimed by them and
  that mere assertion in that regard is of no avail as has been
  enunciated by this Court in U. 0.1. & Ors. vs. Garware Ny/ones
  Ltd.etc. (1996) 10 sec 413 and relied upon with approval in
0
  HPL Chemicals Ltd. vs. Commissioner of Central Excise,
  Chandigarh (2006) 5 SCC 208.

          22. Equally, fundamental is the principle of statutory
  interpretation that no construction to a legislation ought to be
E provided so as to render a part of it otiose or redundant as
  held inter alia by this Court in Maharashtra University of Health
  Sciences & Ors. vs. Satchikitsa Prasarak Manda/ & Ors.
  (2010)3 sec 786.
F        23. That it is the cardinal principle of interpretation not
  to brush aside a word used in a statute or in a Notification
  issued under a statute and that full effect must be given to the
  every word of an instrument had been underscored by this
G Court in The South Central Railway Employees Co-operative
  Credit Society Employees Union, Secundrabad vs. The
  Registrar of Co-operative Societies & Ors. reported in (1998)
  2 SCC 580. The Notificafion in the instant case being
  apparently statutory in nature is akin to subordinate legislation
H to actualize and advance the legislative intent engrafted in
  Section 55A. It not only owes its existence to the Act but would
           VOLTAS LTD. v. STATE OF GUJARAT                              341
                   [AMITAVA ROY, J.]

also be amenable to the cardinal principles of interpretation A
adverted to herein above.

       24. In the overall legal and factual perspectives as
obtained herein, any endeavour to drag the works contract
involved within the framework of Entry No.2 would be repugnant B
to the basic principles of interpretation of statutes and
subordinate legislations like the statutory Notification under
Section 55A of the Act. To exclude the work of fabrication from
the works contract as per the work order would render it (works
contract) truncated to a form not intended by the customer. C
This would strike as well at the root of the mandate of
correlation of a works contract and the corresponding
composition rate of tax as envisaged by Section 55A of the
Act and the Notification issued thereunder.
                                                                         D
        25. The decision of this Court in Sanden Vikas (India)
Ltd.(supra) is of no avail to the revenue vis-a-vis the issue falling
for scrutiny herein.

         26. In the face of the determinations made herein E
 above, the inescapable conclusion is thatthe appellant's works
 contract for fabrication and installation of water chilling plant
 at the factory of Anupam Colours and Chemicals at Vapi would
·fall under Entry 5 of the Schedule to the Notification dated
 18.10.1993 issued under Section 55A of the Act and would F
 be taxable at the rate of 5% as prescribed thereby. The
 impugned decision dated 4.9.2006 of the High Court of Gujarat
 atAhmedabad in Sales Tax Reference No.1/2004 and Special
 Civil Appeal No.12508/2002 and other determinations as are G
 contrary to the views expressed herein are hereby set aside.

        27. The Civil Appeal is allowed.
Kalpana K. Tripathy                                   Appeal allowed.
                                                                        'H