Introduction

The case of Indian Oil Corporation Limited v. Union Of India And Others adjudicated by the Allahabad High Court on December 8, 2020, marks a significant decision concerning the applicability of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 to certain excisable goods. The petitioner, Indian Oil Corporation Limited, sought relief under this scheme for the tax dues related to Superior Kerosene Oil (SKO), which the respondents excluded based on its classification under the Central Excise Tariff Act, 1944.

Summary of the Judgment

The petitioner filed a writ petition challenging the refusal to accept its declaration under the Sabka Vishwas Scheme for SKO. The core issue revolved around whether SKO, as listed in the Fourth Schedule of the Central Excise Tariff Act, 1944, is considered an excisable good eligible for relief under the scheme. The Allahabad High Court, presided over by Justice Surya Prakash Kesarwani, dismissed the petition, upholding the respondents' decision to exclude SKO from the scheme based on statutory provisions.

Analysis

Precedents Cited

The Judgment references several key precedents that shaped the court's decision:

• K.C. Sachdeva v. State, 1976 Cri LJ 1208: This case defined "Petroleum" to include "Kerosene," establishing a foundational understanding of excisable goods.
• Indian Oil Corporation Limited v. Commissioner of Central Excise Vadodara, (2010) 12 SCC 750: The Supreme Court clarified the classification of "Kerosene" under the Central Excise Tariff Act, reinforcing its excisable status.
• Union of India v. Nitdip Textile Processors Pvt. Ltd., (2011) 273 ELT 321 (SC): (2012) 1 SCC 226: This Supreme Court case treated the Sabka Vishwas Scheme as a complete code, emphasizing its statutory and comprehensive nature.

These precedents collectively underscored the legal definitions and statutory interpretations essential for determining the excisable status of SKO and its eligibility under the Sabka Vishwas Scheme.

Legal Reasoning

The court's legal reasoning was anchored in the following key areas:

• Statutory Definitions: The court meticulously examined Sections 2(d) and 2(f)(ii) of the Central Excise Act, 1944, which define "excisable goods" and "manufacture," respectively. It concluded that SKO remains an excisable good despite the absence of a notified duty rate.
• Constitutional Amendments: Referencing the Constitution (One Hundred and First Amendment) Act, 2016, the court highlighted that the amendment did not repeal the Central Excise Act concerning goods included in Entry 84 of the Union List, which encompasses SKO.
• Sabka Vishwas Scheme Provisions: Section 125(1)(h) explicitly excludes excisable goods listed in the Fourth Schedule of the Central Excise Act from availing scheme benefits. The court interpreted this as a clear legislative intent to exclude SKO from the scheme.
• Additional Notes to the Fourth Schedule: The presence of "......" against SKO in the duty rate column was interpreted not as an exclusion from excisable goods but merely indicating a non-applicable duty rate.

By integrating these elements, the court reaffirmed that SKO's classification under the Central Excise Tariff Act inherently disqualifies it from the Sabka Vishwas Scheme.

Impact

This Judgment has far-reaching implications:

• Clarification on Excisable Goods: It provides a clear interpretation of what constitutes excisable goods under the Central Excise Act, especially post the GST implementation.
• Eligibility for Sabka Vishwas Scheme: The ruling delineates the boundaries of eligibility, ensuring that only non-excisable goods benefit from the scheme, thereby preventing misuse.
• Tax Compliance and Litigation: Companies engaged in the manufacture and supply of excisable goods like SKO are now unequivocally aware of their ineligibility for certain relief schemes, promoting better compliance and reducing litigation related to tax disputes.
• Future Legislative Clarity: The decision underscores the importance of precise legislative drafting, encouraging future amendments to clearly define the scope of relief schemes.

Complex Concepts Simplified

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019

A government initiative aimed at resolving long-pending tax disputes by offering significant discounts on tax arrears. However, it excludes certain categories, such as excisable goods listed in the Central Excise Tariff Act's Fourth Schedule.

Excisable Goods

Products that are subject to central excise duty under the Central Excise Act, 1944. SKO is categorized as an excisable good, meaning it falls under specific taxation rules.

Fourth Schedule to the Central Excise Tariff Act, 1944

A detailed list enumerating goods liable to central excise duty. Inclusion in this schedule typically subjects goods to taxation unless explicitly exempted.

Constitution (One Hundred and First Amendment) Act, 2016

An amendment that introduced the Goods and Services Tax (GST) framework, altering the taxation landscape by subsuming various indirect taxes, including central excise duties, except for specific goods like those under Entry 84 of the Union List.

Conclusion

The Allahabad High Court's ruling in Indian Oil Corporation Limited v. Union Of India And Others underscores the meticulous adherence to statutory definitions and legislative intent in tax law interpretations. By affirming that Superior Kerosene Oil remains an excisable good and thus ineligible for the Sabka Vishwas Scheme, the court reinforces the boundaries of tax relief programs. This decision not only provides clarity to corporations engaged in manufacturing excisable goods but also ensures the integrity and intended application of governmental tax schemes.

Ultimately, this judgment serves as a pivotal reference for future cases involving tax disputes and eligibility for government-initiated relief schemes, highlighting the necessity of aligning corporate actions with defined legal frameworks.