INTERPRETATION OF AMBIGUITY OF AN EXEMPTION NOTIFICATION REFERENCE ANSWERED BY SUPREME COURT- CONSTITUTION BENCH
IN MATTER OF
COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI V. M/S. DILIP KUMAR AND COMPANY & ORS.
CIVIL APPEAL NO. 3227 OF 2007 – THE SUPREME COURT OF INDIA
This decision was given with reference to a crucial issue as to “where an ambiguity exists, who will get the benefit, the assessee/subject or the revenue?”
This decision is pertaining only to a situation “where there is an ambiguity in an exemption notification or exemption clause”.
The Constitution Bench held that such situation warrants that the benefit to be accorded to the Revenue alone.
The Doctrine of strict interpretation will be also applied if there is any ambiguity itself exists in a taxation provision and in such a case the beneficiary will the assesse alone.
For instance, if there is an ambiguity in the subject of tax i.e. who are the persons liable to pay tax, and whether the revenue has established conditions before raising and justifying a demand.
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