Neepco Tribal Employees Welfare Association v. Union of India
2005-06-22
AMITAVA ROY
body2005
DigiLaw.ai
A. ROY, J.— This batch of writ petitions raise a common question pertaining to the true purport of Section 10(26) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'). Contending that the benefit of exemption thereunder being extendable to the petitioners, consequential reliefs by way of annulment of the impugned orders and the related assessment proceedings has been prayed for. 2. By separate orders passed at the time of issuance of the Rule, this Court had granted interim protection staying the realization of the tax assessed denying the exemption. 3.1 have heard Mr. S.P. Sharma, learned counsel for the petitioners, Mr. U. Bhuyan, learned counsel for the Department and Mr. V. K. Jindal, Senior Advocate for the North Eastern Electrical Power Corporation Ltd. (hereinafter referred to as the 'NEEPCO'). 4. A brief narration of the individual facts is advisable. 5. The petitioner in WP (C) No. 200 (SH)/ 2002 is a registered association comprised of the members of the Scheduled tribes community serving in the departmental. According to it, the members thereof by virtue of then-status as members of the scheduled tribes under Article 366 (25) of the Constitution of India have been enjoying the benefit of tax exemption envisaged under Section 10 (26) of the Act while posted in the specified areas as mentioned thereunder. By the impugned communication dated 29.6.2001, the Income Officer (RDS), Ward-3, Shillong directed deduction of tax from the salary of the members of the petitioner association. Accordingly, the concerned authority of NEEPCO issued letters dated 20.7.2001 to the aggrieved members of the association requiring them to furnish Exemption Certificates from the Income Tax authorities with particulars for calculation and deduction of tax from their salaries. The departmental authorities having been approached for the Income Tax Exemption Certificates, by the impugned communication dated 7.8.2001 the concerned members of the association were informed, for reasons recorded therein, that they were not covered under Section 10(26) of the Act. 6. The petitioner in WP (C)No. 340 (SH)/ 2002, a member of the kachari community of Assam belonging to the recognized scheduled tribe of the State is aggrieved by the impugned notice dated 23.7.2002 issued under Section 142 of the Act by the Income Tax Officer, Ward-3, Shillong asking her to file the return of her income for the Assessment years 2001 -2002 and 2002-2003.
Her representations before the departmental authorities contending that she was entitled to the exemption under Section 10 (26) of the Act, having failed to evoke any response and she being again asked by the impugned communication dated 8.8.2002 to submit her income tax return, she is before this Court. 7. The petitioner in WP (C) No. 14(SH)/ 2004 who, at the relevant time was serving as a Deputy Manager in the Engineering & FQA Deptt. of Regional Head Quarters of the Power Grid Corporation of India Ltd. at Shillong belongs to Miri (Mishing) tribe, a recognized scheduled tribe of the State of Assam. She initially submitted an application to the Income Tax Officer, Ward-3, Shillong for issuing Tax Exemption Certificate under Section 10(26) of the Act. However, due to non issuance thereof, her employer started deducting tax at source from her salary every month for which she was compelled to file her return claiming therein the refund of tax deducted at source. She filed her first Return on 24.6.1999 at Shillong for the financial year ending 31.3.1999 and claimed a refund of Rs. 13,064/-. The Assessing Officer while refusing to make any refund passed the impugned assessment order dated 7.8.2000 under Section 154 of the Act and raised a demand of Rs. 8540/-. Being aggrieved, the petitioner took the matter in appeal to the Commissioner of Income Tax (Appeals) which, however, remained undisposed. Her grievance is that the employer had continued to deduct tax at source from her salary compelling her to file returns of her income for the assessment years i.e. 2000-2001,2001-2002 and 2002-2003 claiming refund. Lastly, the Income Tax Officer, Ward-3 by the impugned communication dated 28.3.2003 intimated the petitioner that she-was not entitled to any refund. 8. The petitioner in WP (C) No. 15(SH)/ 2004 at the relevant time was serving as Manager (Distribution Management Services) in the office of the Deputy General Manager (Finance), Power Grid Corporation of India Ltd., Shillong on being translated from Salakati in Kokrajhar District of Assam. He belongs to the Bodo Kachari community, a recognized scheduled tribe of the State of Assam. He too, on 4.2.2000 submitted an application to the Income Tax Officer, Ward-3, Shillong for exemption from payment of Income tax.
He belongs to the Bodo Kachari community, a recognized scheduled tribe of the State of Assam. He too, on 4.2.2000 submitted an application to the Income Tax Officer, Ward-3, Shillong for exemption from payment of Income tax. He was eventually informed on 26.6.2000 that the matter had been referred in the Commissioner of Income Tax who had opined that the benefit of tax exemption was not available to him. The petitioner in the circumstances thus, filed his return of income claiming therein refund of the tax deducted at source. He submitted his return on 24.6.1999 for the period, ending 31.3.1999 and claimed a refund of Rs. 5522/-. No refund was made and instead, the Assessing officer passed the impugned assessment order dated 7.8.2000 under Section 154 of the Act raising an additional demand of Rs. 2846A. Being aggrieved, the petitioner filed an appeal before the Com-missioner, Income Tax (Appeals) which was dismissed on 19.8.2003. As the employer company continued to deduct tax at source from his salary, the petitioner being without any alternative submitted his returns for the subsequent assessment years 2000-2001, 2001-2002, 2002, 2003 claiming refund. The Income Tax officer, Ward-3, Shillong did not allow refund of the amounts claimed and Instead Issued the impugned notification on 4.4.2003 under Section 143 (1) of the Act intimating him that he was not entitled to any refund. 9. The Misc. Case No. 188 (SH)/2001 has been filed on behalf of the departmental for modification/cancellation of the order dated 29.8.2001 passed in WP (C) No. 200(SH)/2001 granting interim relief to the petitioner. 10. While asserting that the petitioners (including the members of the petitioner association in WP (C) No. 200 (SH)/2001) were not eligible for exemption granted under Section 10(26) of the Act, the departmental respondents have, in their written response pleaded that the benefit of the above provision of the Act is available only to the members of the scheduled tribes comprehended under Article 366 (25) of the Constitution of India of the areas as specified in Part-I and Part-n of the table appended to paragraph 20 of the Sixth Schedule to the Constitution and the areas covered by the notification Issued by the Governor of Assam under proviso to sub-paragraph 20 of Sixth schedule to the Constitution.
As the petitioners are not the members of the Scheduled tribes (s) of the Sixth Schedule area as above, they are not entitled to the benefit of exemption. They being the members of the Scheduled Tribes of the State of Assam within the Fifth Schedule of the Constitution of India, their claim is misconceived. The answering respondents have supported the Impugned communications and the assessment proceedings contending that the opinion of the departmental authorities. In individual cases relied upon by the petitioners are not binding in law and therefore cannot decisively conclude the issue in their favour, as claimed. 11. The learned counsel for the petitioners has argued that as the employees whose case is espoused in the instant proceedings are admittedly members of the Scheduled tribes residing in the areas as envisaged in Section 10(26) of the Act, they are apparently entitled to the exemption thereunder and therefore, the impugned decision to the contrary as manifested in the related communications/notifications is per se, illegal, unconstitutional, null and void. According to him, the word "residing" appearing in the above provision of the Act does not cannot a domicile of the persons concerned in the area specified therein and a member of the scheduled tribe within the meaning of Article 366(25) of the Constitution even if posted in such an area by way of incidence of service is entitled to the benefit of exemption. Mr. Sharma has asserted that having regard to the underlying purpose of the exemption, insistence on the requirement of permanent residence or stay of the concerned member of such schedule tribe would be opposed to the legislative objective. Drawing the attention of the Court to the interpretation of various departmental authorities, vis a vis, Section 10 (26) of the Act in the same lines, the learned counsel has argued that the respondents are estopped in law from taking a contrary view. Mr. Sharma placed reliance on a decision of the Apex Court in 103 ITR 82, Income Tax Officer, Shillong & Anr., Vs. N. Takin Roy Rymbai & of the Delhi High Court in 177 ITR 24, J. Lalhmingliana & Ors., Vs. Union of India & Ors. 12. In reply, Mr.
Mr. Sharma placed reliance on a decision of the Apex Court in 103 ITR 82, Income Tax Officer, Shillong & Anr., Vs. N. Takin Roy Rymbai & of the Delhi High Court in 177 ITR 24, J. Lalhmingliana & Ors., Vs. Union of India & Ors. 12. In reply, Mr. Bhuyan has urged that the purpose of providing exemption from taxes as contemplated in Section 10 (26) thereof, is to grant relaxation in the matter of payment of tax out of the Income of a member of the scheduled tribe belonging to the specified area as well as to provide an impetus to the economic growth of the region. The benefit under the said provision of the Act is accordable only to an indigenous member of the scheduled tribe of the area specified and not to any member of any scheduled tribe having a fleeting presence in the said area. According to him, therefore, for the applicability of Section 10(26) of the Act, the person concerned has to be a member of the scheduled tribe of the area specified with his permanent residence there and in the context of the basic object of such exemption, the word "residing" needs to be interpretated as "having domicile" or "having permanent residence" Mr. Bhuyan contended that as the members of the petitioner association in WP)C) No. 200 (SH)/ 2001 and other writ petitioners are not members of the scheduled tribes comprehended in Article 366 (25) of the Constitution of India for the area, having either their domicile or permanent residence there as specified in Section 10(26) of the Act, they are not entitled to the exemption granted thereby and therefore, the impugned decision of the revenue authorities is perfectly legal and valid. To buttress his arguments, Mr. Bhuyan placed reliance on the following decisions. (i) 68ITR 272, S.K. Dutta. Income Tax Officer, Salary-cum- S.I.B. Circle, Assam & Ors., Vs. Lawarence Singh Ingty, Treasury Officer, State of Nagaland; (ii) 92 ITR 425, Dr. Curzon G. Momin Vs. I.S. Phukan, 2nd Additional Income Tax Officer & Ors.; (iii) 103 ITR 82, Income Tax Officer, Shillong & Anr., Vs. N. Takin Roy Rymbai. (iv) 777 ITR 24, J. Lalhmingliana & Ors., Vs. Union of India & Ors. (v) AIR 1986 SC 2146 , M/s. Onkarlal Nandlal, Appellant Vs. State of Rajasthan &Anr., Respondents. 13. Mr.
Curzon G. Momin Vs. I.S. Phukan, 2nd Additional Income Tax Officer & Ors.; (iii) 103 ITR 82, Income Tax Officer, Shillong & Anr., Vs. N. Takin Roy Rymbai. (iv) 777 ITR 24, J. Lalhmingliana & Ors., Vs. Union of India & Ors. (v) AIR 1986 SC 2146 , M/s. Onkarlal Nandlal, Appellant Vs. State of Rajasthan &Anr., Respondents. 13. Mr. Jindal, learned Senior counsel for NEEPCO without offering any comment on the competing contentions, has submitted that in terms of the decision of the assessing authorities, the Corporation has been deducting the tax from the pay/salary of the petitioners at source. 14. I have lent a careful consideration to the arguments advanced. As the assertions centre around clause 26 of Section 10, 11 would be essential to first, examine the key features thereof. 15. A reading of the said clause presents the following attributes (a) The person concerned has to be a member of the scheduled tribe as defined in clause 25 of Article 366 of the Constitution of India; (b) He must reside in any area specified in Part-I or Part-II of the Table appended to paragraph 20 of the Sixth Schedule to the Constitution or in the other areas/region as mentioned therein. (c) The income must accrue or arise to him from any source in such area (s) or by way of dividend or interest on securities. 16. As the said provision of the Act provides for the exemption from exigibility of Income tax, the essential preconditions therefore as envisaged thereby logically will have to be compelled with to avail such benefit. 17. Article 366 (25) of the Constitution defines "Scheduled Tribes" as hereunder:- "Scheduled Tribes" means such tribes or tribal communities or parts of or groups within such tribal communities as are deemed under Article 342 to be Scheduled tribes for the purposes of this Constitution." 18. In view of the definition, as above, reference to Article 342 of the Constitution of India becomes imperative.
In view of the definition, as above, reference to Article 342 of the Constitution of India becomes imperative. Under the said provision of the Constitution, the President may with respect to any state or Union territory, after consultation with the Governor, if it relates to a State, may by public notification specify any tribe or tribal communities or parts of or groups within tribes or tribal communities, which for the purpose of the Constitution would be deemed to be Scheduled tribes in relation to that State or Union territory as the case may be. 19. Pursuant to the above constitutional provision, the President of India in exercise of powers thereunder has made the Constitution (Scheduled Tribes) Order, 1950 (hereinafter referred to as the 'Scheduled Tribes Order'). Clause 2 of the said Order reads as follows :- "The Tribes or tribal communities, or parts of, or groups within, tribes or tribal communities, specified in Part I to XIX of the Schedule to this Order shall, in relation to the States to which those Parts respectively relate, be deemed to be Scheduled Tribes so far as regards members thereof are residents in the localities specified in relation to them respectively in those Parts of that Schedule." 20. A bare reading of Article 342 of the Constitution of India and clause 2 of the Scheduled Tribes Order makes it obvious that the tribes or tribal communities specified under different Parts of the Schedule to the said Order, are in relation to the States to which those parts respectively relate, the Scheduled tribes so far as the members thereof are residents in the localities relatable to those parts of the schedule. In other words, the tribes or tribal communities or parts or groups within the said tribes or tribal communities are to be identified with the localities of which they are the residents and in relation to which such tribes or tribal communities are declared to be scheduled tribes within the meaning of Article 366 (25) of the Constitution of India. 21. While dwelling on the question as to whether a member of the scheduled tribe in relation to a particular State as specified in the Scheduled Tribes Order would carry with him the same status in another State, the Apex Court in Manichandra Shekhar Rao Petitioner Vs.
21. While dwelling on the question as to whether a member of the scheduled tribe in relation to a particular State as specified in the Scheduled Tribes Order would carry with him the same status in another State, the Apex Court in Manichandra Shekhar Rao Petitioner Vs. Dean, Seth G.S. Medical College & Ors., Respondents, (1990) 3 SCC 130 ., answering in the negative held that the expression 'for the purpose of this Constitution and 'in relation to that State' appearing in Articles 341 and 342 of the Constitution of India must be harmoniously construed so as to give each of them its full meaning and full effect so that one may nol annul the other. It ruled that the scheduled castes or Scheduled tribes of a State are entitled to the privilege and rights under the Constitution in that State, but when a member thereof migrates, he does not and cannot carry any special right or privilege attributed or granted to him in the original State. It was of the view that if such a member is not accorded the rights or privileges of the reserved category of his State in the migrated State, it does not interfere with his constitutional right of equality or a migration or of his carrying on trade or business or profession. This opinion of the Constitution Bench of the Supreme Court found reiteration in the decision of another Constitution Bench in Action Committee on issue of Caste Certificate to Scheduled Castes and Scheduled Tribes in the State of Maharashtra Vs. Union of India (1994) 5 SCC where it was held as under:- "What is important to notice is that/the castes or tribes have to be specified in relation to a given State or Union Territory. That means a given caste or tribe can be a Scheduled Caste or a Scheduled, Tribe in relation to the State or Union Territory for which it is specified." The Same view was taken in M. C.D. Vs. Veena, (2001) 6 SCC 571 holding that the considerations for specifying a particular caste in a particular group belonging to OBC depending on the nature and extent of disadvantages and social hardships suffered by that caste or group in one State may not exist or be relevant for another State to which such a person may visit by migration. 22.
Veena, (2001) 6 SCC 571 holding that the considerations for specifying a particular caste in a particular group belonging to OBC depending on the nature and extent of disadvantages and social hardships suffered by that caste or group in one State may not exist or be relevant for another State to which such a person may visit by migration. 22. The Apex Court in U.P. Public Service Commission Allahabad, Appellant Vs. Sanjay Kumar Singh, Respondent (2003) 7 SCC 657 on sl survey of the above law rejected a similar claim advanced on behalf of the respondent therein claiming reservation in the State of U.P. on the ground that he belonged to a member of Scheduled tribe in the State of Nagaland. 23. The pronounced judicial opinion, therefore, is that a particular tribe notified to be a Schedule Tribe in relation to a State or a Union Territory in the Schedule Tribe order would not automatically be treated to be a Schedule Tribe in any other State or Union Territory unless it is declared to be so as well in the latter State. It accords fully with the definition of Schedule Tribe under Article 366 (25) of the Constitution read with Article 342 thereof and clause 2 of the Schedule Tribe Order. 24. In other words a notified Schedule Tribe is clearly identifiable with a corresponding State or Union Territory for which it is declared to be so. An element of particularity in the identification of the Tribe vis-a-vis the State or the Union Territory concerned is discernible. It is only if the Tribe is also recognized and declared to be a Schedule Tribe for any other State or any Union Territory that it can be accepted to be so and consequentially a member thereof would be extended the preferential benefits under the Constitution or any other law thereunder. Acceptance of a Schedule Tribe notified to be so for a particular State or a Union Territory to be also a Schedule Tribe for any other State or Union Territory without any declaration therefore would be fundamentally antithetical to the edict of Article 342, 366 (25) and the Schedule Tribe Order. The petitioners in the instant case have not produced any material to establish that the Tribes, to which they belong have been notified to be the Schedule Tribe of the State of Meghalaya within which their places of posting are located.
The petitioners in the instant case have not produced any material to establish that the Tribes, to which they belong have been notified to be the Schedule Tribe of the State of Meghalaya within which their places of posting are located. There is, however, no dispute that their places of posting are in the area specified in Section 10(26) of the Act. In the above view of the matter, the petitioners cannot be construed to be members of a Schedule Tribe or Tribes as defined clause 366 (25) of the Constitution of India vis-a-vis the area mentioned in Section 10(26) of the Act. 25. It is necessary at this stage to trace the incorporation of Section 10(26) of the Act. The Indian Income Tax Act, 1922, did not contain any provision exempting members of the Schedule Tribes from the levy of Income Tax. Such a provision was introduced for the first time by the Finance Act, 1955, in the said Act. The original provision after its amendment and regularisation by Section 3 of the Finance Act, 1958 assumed the form of Section 4(3)(XXI) which is extracted herein below. "Section 4(3)(xxi) Any income of a member of a Scheduled Tribe as defined in clause (25) of Article 366 of the Constitution, residing in any area specified in Part A or Part B of the Table appended to paragraph 20 of the Sixth Schedule to the Constitution or in the Union Territories of Manipur and Tripura, provided such member is not in the service of Government." 26. This clause was reenacted in the Income fax Act, 1961, as Section 10(26). State of Nagaland was added to the areas specified in Section 10(26) by the State of Nagaland (Adaptation of Laws of Union Subjects) Order, 1965, so that the tribal people of the said State could also be extended the benefit of exemption. The words "who is not in the service of the Government" appearing in Section 10 (26) of the Act at the inception, were deleted by the Taxation Laws (Amendment) Act, 42 of the 1970 following the decision of the Apex Court in S. K. Dutta, Income Tax Officer Vs. Lawrence Singh Ingti, 68ITR 272. The provision underwent further amendments inter alia through the Northeastern Areas (Re-organization) Adaptation of Laws on Union Subject Order, 1974, and eventually emerged in the following form.
Lawrence Singh Ingti, 68ITR 272. The provision underwent further amendments inter alia through the Northeastern Areas (Re-organization) Adaptation of Laws on Union Subject Order, 1974, and eventually emerged in the following form. "10(6): In case of a member of a Scheduled Tribe as defined in clause (25) of Article 366 of the Constitution, residing in any area specified in Part I or Part II of the Table appended to paragraph 20 of the Sixth Schedule to the Constitution or in the States of Arunachal Pradesh, Manipur, Mizoram, Nagaland and Tripura origin the areas covered by notification No. TAD/ R/35/50/109 dated the 23rd February, 1951, issued by the Governor of Assam under the proviso to sub-paragraph (3) of the said paragraph 20 as it stood immediately before the commencement of the North-Eastern Areas (Recognization) Act, 1971, (81 of 1971) or in the Ladakh region of the State of Jammu and Kashmir, any income which accrues or arises to him, (a) from any source in the areas or States aforesaid, or by way of dividend or interest on securities." 27. The prominent features of the above provision of the Act have already been noticed and the eligibility criteria as prescribed thereby have to be essentially satisfied to entitle a member of the Schedule Tribe comprehended therein to be sanctioned the benefit of exemption. 28. The authorities cited at the bar may now be referred to. The question which arose for consideration of the Apex Court in S.K. Dutta, I.T. Officer, (supra) was whether the exclusion of government servants from the purview of exemption granted by Section 4(3) (XXI) of the I.T. Act, 1922 and later by Section 10 (26) of the Income Tax Act, 1961, was violative of Article 14 of the Constitution of India. The respondent there belonged to the Mikir Scheduled Tribe and was a permanent inhabitant of the United Khasi -Jaintia Hills District, an autonomous district included in Part A of the Table appended to paragraph 20 of the Sixth Schedule of the Constitution of India. He was a Government servant and in view of the exclusionary clause in the then existing provision of the Act was not entitled to the benefit of exemption.
He was a Government servant and in view of the exclusionary clause in the then existing provision of the Act was not entitled to the benefit of exemption. The Apex Court held that the exemption under Section 4(3)(xxi) of the Income Tax Act, 1922 and Section 10 (26) of the Income Tax Act, 1961, was intended to be provided to the members of certain Scheduled Tribes and, therefore, some of the members of that tribe could not be denied the benefit thereof unless they could be considered as belonging to another well defined class for the purpose of Income Tax. It observed that there was no distinction between the income earned by a Government servant and that earned by persons serving in a Company or by a private individual and, therefore, the differentiation borne by the provision was discriminatory. Consequently as alluded herein above, the words, "who is not in service of the Government" were deleted from Section 10(26) of the Act by the Taxation Laws (Amendment) Act, 1970, Act 42 of 1970. 29. In Income Tax Officer, Shillong and Anr. Vs. N. Takin Roy Rymbai, (Supra), the respondent who belonged to the Jaintia Scheduled Tribe and was a permanent resident of United Khasi Jaintia Hills Autonomous District under the 6th schedule of the Constitution within the State of Meghalaya was denied the benefit of Section 10(26) of the Act as at the relevant time his place of posting was not within the area described in paragraph 20 of the 6th Schedule. The consequential assessment orders were impugned by him under Article 226 of the Constitution of India before this Court challenging the vires of sub-clause (a) of Section 10(26) of the Act. This Court upheld the challenge and quashed the impugned notices and the orders of assessment. The Apex Court after a detailed survey of the evolution of Section 10(26) of the Act and on an indepth analysis of the essential attributes of the said statutory provision allowed the appeal of the revenue.
This Court upheld the challenge and quashed the impugned notices and the orders of assessment. The Apex Court after a detailed survey of the evolution of Section 10(26) of the Act and on an indepth analysis of the essential attributes of the said statutory provision allowed the appeal of the revenue. On the aspect of the legality of classification for the purpose of exemption between the income of a member of a Scheduled Tribe accruing or arising from an area, State or Union Territory specified in Section 10(26) of the Act, and an income from a source outside such area, the Apex Court by noticing Section 5 of the Act, held that chargeability of income was dependent on the locality of the accrual or receipt thereof. Referring to various provisions of the Act exempting certain sources of income from tax while subjecting others thereto, the Apex Court concluded that the classification introduced by Section 10(26) of the Act conforms to the legislative pattern of the statute and was based on intelligible differentia. It ruled that the objective behind such differentiation between the two sources of income was not only to benefit the members of the scheduled tribe residing in the specified areas but also to upgrade economically, the said areas. The classification was, therefore, upheld. 30. The facts in Dr. Curzon G. Momin, (supra), carried the same grievance. The petitioner who belonged to Garo community, a Scheduled Tribe defined in Article 366 (25) of the Constitution of India and a permanent inhabitant of Garo Hills District which is an area specified in Part A of the table appended to paragraph 20 to the 6th Schedule to the Constitution, at the relevant time was posted as Resident Medical Officer at Guwahati under an autonomous institution receiving grant in aid from the Government of Assam. The petitioner, claimed exemption from payment of tax under Section 10 (26) of the Act. Being denied, he challenged the action of the revenue authorities and also questioned the validity of the said provision of the Act. This Court before which the grievance was brought declined to interfere on the ground that the petitioner's claim was not within the purview of Section 10(26) of the Act as his income did not accrue or arise within the area mentioned in the said clause.
This Court before which the grievance was brought declined to interfere on the ground that the petitioner's claim was not within the purview of Section 10(26) of the Act as his income did not accrue or arise within the area mentioned in the said clause. It was held that the incorporation of the exemption clause was in the interest of the scheduled tribe as well as of the area in which the member thereof resides and by exempting his income accruing or arising in such area not only the members of the tribe are assisted but also the interest of the area is furthered. Holding that the members of the scheduled tribes earning income accruing in the tribal area as specified are a well defined class and that there is a reasonable nexus for exempting this class from the other members of the scheduled tribe deriving income from a place or area outside the specified areas, this Court concluded that the classification was founded on an intelligible different having arational nexus with the object sought to be achieved by the exemption clause. The same question arose before the Delhi High Court in J. Lalhmingliana & Ors. Union of India & Ors., (supra), where the petitioners, who were members of the scheduled tribes as defined under Article 366(25) of the Constitution of India, and in government service, though permanent residents of the area specified in Section 10(26) of the Act, were posted outside thereof. Their lordships of Delhi High Court taking note of the decision of the Apex Court in N. Takin Roy Rymbai, (supra), negated the contention raised on their behalf that the purpose of Section 10(26) of the Act being to benefit a tribe, a person belonging thereto is entitled to the exemption whether he was physically residing in the specified locality or not. 31. The unequivocal judicial dicta that is decipherable from the above authorities supports the view that the underlying objective of the exemption visualized by Section 10(26) of the Act is not only to benefit the members of the scheduled tribe of the area (s) specified therein, but also to advance thereby the economic growth thereto to which the exempted members belong. The insistence, therefore, is for the accrual of the income from any source in such area(s) consequently requiring the physical presence of the member there at. The expression "residing" therefore, deserves its due interpretation.
The insistence, therefore, is for the accrual of the income from any source in such area(s) consequently requiring the physical presence of the member there at. The expression "residing" therefore, deserves its due interpretation. Does it denote permanent residence or an intention of domicile or whether even a temporary presence in the specified area would be in consonance with the letter and spirit of the provision? 32. Blacks law dictionary defines 'reside' as lives, dwell, abide, sajourn, stay remain, lodge. Though the word "residing" read in isolation therefore may not necessarily imply an act of permanent residence, the same has to be construed in the context in which it appears as well as the legislative intent conveyed thereby. The meaning to be accorded to the expression has to be necessarily in tune with the views expressed in N. Takin Roy Rymbai. In Dr. Curzon J. Momin (supra) that the underlying the purpose of exemption is not only in the interest of the members of the scheduled tribe of the area but also of the locality in which they reside and the situs of source of their income rests. As noticed in the above decision the chargeability of income is dependent upon the locality of accrual or receipt thereof and the scheme and pattern of the Act acknowledges relevance of territorial nexus with the assessable income. As economic advancement of the area is made consequential on the benefit of exemption granted to the members of the Scheduled Tribe(s) thereof, a passing presence of the person concerned in such area(s) would be incompatible with the legislative objective, for the desired contribution by such a member of the scheduled tribe for the economic growth of the specified area, his continuous presence is indispensable. The economic prosperity of the area, being inextricably linked with the individual empowerment of the residing member of the scheduled tribe(s), any transient stay in the specified area would not sub serve the purpose comprehended through the exemption. It is a trite principle of statutory interpretation that a construction that effectuates the object of a legislation has to be preferred to the one which defeats it. In my view, therefore, the word "residing" connotes permanent residence of the members of the scheduled tribe (s) visualized in Section 10(26) of the Act in the areas specified therein. Had the legislature thought otherwise, the provision would have been accordingly worded. 33.
In my view, therefore, the word "residing" connotes permanent residence of the members of the scheduled tribe (s) visualized in Section 10(26) of the Act in the areas specified therein. Had the legislature thought otherwise, the provision would have been accordingly worded. 33. The Apex Court in State ofJharkhand & Ors. Vs. Ambay Cement & Anr., (2005) 1 SCC 368 , had held that an exception or exemption provision in a taxing statute has to be construed strictly and that the conditions prescribed for grants thereof have to be scrupulously adhered to. 34. While dealing with the principles of interpretation of statutes in deciphering the true meaning of a word used in an enactment, the Apex Court in Workman Vs. Management of AIR 1958 SC 353 , held that in case of a doubt about the meaning of a word, it has to be understood in a sense in which it best harmonises with the subject of enactment and the object which the legislature has in view. The meaning is found not so much in a strictly grammatical or etymological property of language nor even in its popular use as in the subject or in the occasion in which it is used and the object to be attained. 35. The law on this aspect of statutory interpretation was authoritatively laid down by the Apex Court in Deputy Chief Controller of Imports & Exports, New Delhi, Vs. K. T. Kosalrom and Ors., AIR 1971 SC 1283 , in the following words :- "In our opinion dictionary meanings, however, helpful in understanding the general sense of the words, cannot control where the scheme of the statute or the instrument considered as a whole clearly conveys a somewhat different shade of meaning. It is not always a safe way to construe a statute or a contract by dividing it by a process of etymological dissection and after separating words from their context to give each word some particular definition given by lexicographers and then to reconstruct the instrument upon the basis of those definitions. What particular meaning should be attached to words and phrases in a given instrument is usually to be gathered from the context, the nature of the subject matter the purpose or the intention of the author and the effect of giving to them one or the other permissible meaning on the object to be achieved." 36.
What particular meaning should be attached to words and phrases in a given instrument is usually to be gathered from the context, the nature of the subject matter the purpose or the intention of the author and the effect of giving to them one or the other permissible meaning on the object to be achieved." 36. The above view in a summarized version found reiteration in the decision of the Apex Court in Rai Vimal Krishna and others versus State of Bihar and others (2003) 6 SCC 401 , where it was held that it is an elementary principle of interpretation that the words in statutory provision take their colour from the context and object keeping pace with the time when the words is being constured. 37. Having regard to the underlying legislative intendment in incorporating the exemption provision in the form of Section 10(26) of the Act and the interpretation which Section 10(26) of the Act has received in the hands of the Apex Court as well as of this Court in the earlier decisions as well as the judicially evolved principles bearing on the relevant aspect of statutory interpretation, I am of the considered view that a person to be qualified for the exemption contemplated in the above provision of the Act has to be essentially a member of a scheduled tribe notified under the scheduled Tribe Order to be so for the area(s), must be a permanent resident thereof and his income has to accrue from any source located therein. It is only if the above three conditions coexist that the benefit envisaged under the above provision of the Act would be available. The interpretation provided to Section 10(26) of the Act by departmental and other authorities to the contrary as is sought to be relied upon on behalf of the petitioners, in view of the judicial determination made in N. Takim Roy Rymbai, (supra), Dr. Curzon, J. Momin, (supra), as well as above is inconsequential and is of no assistance to the petitioners. The petitioners therefore cannot be adjudged to be eligible for the exemption under Section 10(26) of the Act. In the wake of the above, I do not find any merit in the petitions, which are accordingly dismissed. No costs.