1. SHAFIUR RAHMAN, J.--Leave to appeal was granted to the Central Board of Revenue, Islamabad to examine the question of law arising in respect of to assessees of income-tax viz. Their entitlement to claim benefit and exemption from tax under subsection (4) of section 15-BB of the Income Tax Act.
2. In one Civil Appeal (C . A . No. 51-K of 1973 arising out of petition for leave to appeal No. K-87 of 1973 relating to Constitutional Petition No.711 of 1969) the assesses is a leading manufacturer of cement in the country. Their industrial undertaking known as Zeal Pak Cement Factory Ltd. Started operations in 1956 at Hyderabad with to kilns installed in January and October 1956 In the year 1960 a third kiln was added and on its application for exemption from income-tax for income arising from this additional kiln under subsection (4) of section 15-BB of Income-tax Act the same was granted in February 1962. A fourth kiln was added by the assessees in 1963 for which necessary particulars were provided and a similar exemption was sought from the Central Board of Revenue under section 15-BB. In 1967 (12th of April 1967) the assessees was informed in the following terms.-- "From the report received through the Income Tax Department and from the correspondence it has been observed that the company is using existing machinery also in the unit for which tax holiday has been claimed and that machinery was already being used in the existing business. In view of the above position the case falls within the mischief of subsection (4) of section 15'-BB of the Income Tax Act and approval cannot be granted".
3. The assessee's representation to the Government was rejected on 7th of October, 1969. A constitutional petition was, therefore, instituted the same year challenging the refusal of exemption on numerous grounds to be taken note of later.
4. In the other appeal (Civil Appeal No.K-52 of 1973 arising out of Civil Petition No.88 of 1973 relating to the constitutional petition No.52 of 1967) the assessee was carrying on the business of manufacturing cotton yarn and cloth in Karachi. Upto the year 1961 it was manufacturing only carded yarn and cloth from carded yarn. During the period February, 1961 and December 1963 the assessee imported 22 doubling frames and 12 combing sets for the purpose of doubling the yarn and for producing finer varieties of cloth from combed yarn. The assessee made four applications to the Central Board of Revenue claiming exemption under section 15-BB subsection (4) in respect of income derived from doubling and combing processes. In respect of 22 doubling frames a qualified exemption was given and in respect of 12 combing sets exemption was altogether refused. The reason for this conditional exemption and the refusal of exemption for the combing sets appears from the following communication addressed to the assessee on 25th of February 1967:- "The company has been approved as an industrial undertaking in respect of its expansion unit comprising 22 doubling frame for the manufacture of doubled yarn (excluding expansion comprising 12 combing sets) under section 15-BB of the Income Tax Act and a notification is being published in the official Gazette. This approval is on the best of information supplied regarding the use of raw materials produced in Pakistan and is subject to compliance of other statutory conditions. The statutory period of exemption would be reduced by the period from the date of production to 30th June, 1964 as the company was using old building for the above unit and the condition relating to the use of new building has been deleted w.e.f. 1-7-1964.
5. The expansion comprising 12 combing sets has not been treated an independent and identifiable unit and that combed yarn is being produced on the machinery of the existing yarn manufacturing unit and the case, therefore, falls within the mischief of subsection (4) of section 15-BB of the Income Tax Act and it is regretted that' approval to that expansion cannot be allowed . . . "
6. The assessee represented to the Government but the representation was rejected.
7. This asseesee also filed a constitutional petition challenging such a treatment by the statutory authority.
8. In the to constitutional petitions the common grounds taken up were that the assessee satisfied all the jurisdictional requirements provided in subsection (4) of section 15-BB for the grant of exemption and that it had been wrongfully refused to them. It was further contended that while exercising its statutory powers the appellant had imported an extraneous consideration into the decision by coupling the word 'independently' to the expression "identifiable industrial unit" or "identifiable industrial process". This coupling has distorted the appreciation of the material placed before the statutory functionary and has resulted in misdirection.
9. The learned Judges while disposing of these petitions and allowing them held that in fact the Central Board of Revenue had in appreciating the facts of the case of the assessees applied an extraneous test not supportable by the law inasmuch as it had considered the requirement of subsection (4) of section 15-BB to be not only that the industrial units should be identifiable or the industrial process should be identifiable but also that the unit or the process should be independent and self-contained. Such was not the requirement of statute nor could it be because in the case of expansion of undertaking the un-expanded complement of the undertaking had to provide a basis, a support or at as an adjunct to the expanded unit. If it is taken to be quite divorced and fully independent of the pre-expanded unit then it will have its own identity and existence as a new undertaking and in any case qualify under subsection (1) of section 15-BB.
10. It was also held by the learned Judges in the High Court that when the third kiln was added to the cement factory it was recognised as an expansion and given the exemption but on the same facts identical in all respects the exemption was refused on the addition of fourth kiln. This was discriminatory, arbitrary and against their own official dealings with the assessee.
11. The additional grounds urged on behalf of the appellant with regard to the identity of goods produced from the expanded unit and the difficulty of maintaining separate accounts, were also taken note of and found to be untenable.
12. The qualified exemption for the doubling frames was also held to be without lawful authority for the use of old building to house it was held not to deprive it of the exemption otherwise deserved. The learned Chief Justice recorded a separate opinion in the matter concurring but examining at length whether in such a situation a direction could issue to the Central Board of Revenue to grant the exemption when the law required it to be satisfied and it was only after its satisfaction that such an exemption could be granted. The learned Chief Justice examined at great length the various requirements of the law on the subject and held that the power conferred on the Central Board of Revenue was coupled with a duty to grant the exemption where the requirements of law were satisfied. As in this case all the objections that the Board of Revenue had to the grant of exemption had been disclosed examined and found to be untenable, the exemption was earned by the assessee.
13. The learned counsel for the Central Board of Revenue has conceded as against the Zeal Pak Cement Factory that in view of the exemption granted when the third kiln was added a different treatment could not be extended on the addition of the fourth kiln unless the compulsions of law left no choice in the matter. He to felt that the compulsion of law was not so in the case Zeal Cement Factory and he was unable to support the treatment given to the assessee.
14. As regards the other appeal, the learned counsel for the appellant has not for a moment interpreted the law without the prefix 'independently' as was done by the Central board of Revenue.
15. The law does not place any such qualification or condition and ex facie the Central Board of Revenue by adding that word was bringing an altogether extraneous concept for testing the eligibility of the applicant or the assessee. In spite of frequent changes in the law on the subject, at times giving the appearance of making it incongruous the requirement of subsection (4) seems to be clear and pointed. The weakness of the case of the appellant, lies in the fact that its conclusions, or point of view, cannot be supported, sustained or advanced otherwise than by adding an altogether different word to the; language of the statute. That word is independent, nowhere to bed found to the statute.
16. It is sought to be prefixed to the expressions used in the statute viz. "identifiable industrial unit" or "identifiable industrial process". On no principle of interpretation or statutory construction can it be approved or defended where the language of the statute) unmistakably points to the meaning, presents no difficulty in understanding injection of a word of one's own choice would clearly amount to impermissible inter-meddling with legislative intent and purpose. "Nothing" said Lord Denman C.J. In Everard v. Ploppleton (5 Q B 181) "is more unfortunate than a disturbance of the plain language of the Legislature by an attempt to use equivalent terms". Our effort has been to locate any observation in the report of the Deputy Director of Inspections (Taxation) which may provide the basis for the technical view taken, or that an express requirement of the legislation remained unsatisfied by the respondent. The to deficiencies pointed out are that the identifiable unit is not independent, and it comes to the same thing saying that for its functioning it depends on the already existing complements in the form of machinery and building.
17. We are, therefore, satisfied that the view taken by the High Court .Is in accord with law. These appeals are, therefore, dismissed with costs.