COMMISSIONER OF INCOME-TAX Versus ATTOCK OIL COMPANY LTD.
MUHAMMAD AKRAM, J .‑This judgment will dispose of eleven connected petitions (P. T. R. Nos. 185 to 195 of 1973) (T. R. Nos. 170 to 175 and T. R. No. 1~9 to 183 of 1973) made under section 66(1) of the Income‑tax Act, 1922. In all these cases the Commissioner of Income‑tax, Rawalpindi Zone, Rawalpindi has applied to the High Court against M/s. Attock Oil Company Limited, Rawalpindi referring the following common question of law said to arise out of a consolidated order dated the 23rd of April, 1973, passed by the Income‑tax Appellate Tribunal (Pakistan), Lahore in connected Income‑tax Appeals Nos. 315 (PB) to 325(PB) of 1972‑13 respectively relating to the assessment years 1955‑56 to 1965‑66 :‑---
"Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that the educational expenses incurred by the assessee which were admittedly not admissible under the specific provision of section 10(2) (xiva) of the Act could be allowed under section 10(2)(xvi) although even under the later provision the expenses in question were not admissible not being wholly and exclusively incurred for the purposes of the business."
2. Briefly the facts are that the respondent (hereinafter called the assessee) is a public limited company carrying on business of prospecting, extracting and mining of oil etc: in Pakistan. At first on the 30th of September 1955, the Income‑tax Officer, Company Circle I, Rawalpindi completed the usual assessments against the Company under section 23(3) of the Income‑tax Act for all these assessment years in question. Afterwards it came to the notice of the Income‑tax Officer that certain expenses allowed to the company in connection with the education of the dependents of the employees had originally escaped proper scrutiny and were not admissible under section 10(2) (xiv‑a) of the Act. He, therefore, served notices in this behalf under section 34 of the Act on the assessee through their Chief Accountant for reopening the already completed assessments. In the course of the re‑assessment proceedings he served further notices on the assessee under sections 22(4) and 23(2) of the Act. In this manner he eventually completed the supplementary assessments in respect of the first two years under section 23(4) for the assessee's failure to furnish the required information and for the remaining assessment years in question he finalized the re‑assessments under section 23(3) of the Act. In all these cases he was of the opinion that the expenses incurred by the assessee on the education of the dependents of the employees by establishing a school in its premises and also on subsidizing two other schools in its operational fields could not be allowed as admissible deductions. He, therefore, added bade these amounts to the income of the respective assessment years in computation of the tax under section 34 of the Act in all these cases.
3. Those orders gave rise to eleven different appeals (I. T. A. Nos. 315 (PB) to 325) (PB) of 1972‑73). They were disposed of together by the Income‑tax Appellate Tribunal (Pakistan), Lahore by a consolidated order passed on the 23rd of April 1973. At the hearing before the Tribunal a number of legal objections were raised against the notices issued to the assessee under section 34 of the Act. It was also contended that these assessments framed on the 28th of June 1972, were time‑barred. Before the Tribunal an objection was also taken to the effect that in these cases notices required under section 23(2) were never issued to the assessee, and consequently in the opinion of the Tribunal all these re‑assessments, framed under section 23(3) or 23(4), could not be sustained. But at the same time the Tribunal formed the opinion that on the merits the income sought to be assessed through these supplementary actions was not assessable and the expenses incurred by the assessee on the education of its employees were held to be admissible deductions rightly allowed to the company. Therefore, instead of vacating the orders for fresh adjudication, the Tribunal deemed it proper to cancel them as without jurisdiction. In this view of the matter the Tribunal did not go into some of the other legal objections raised before it at the hearing.
4. In these circumstances we have confined our discussion only to the above question referred to the High Court. The assessee claimed deductions on account of educational expenses of the dependents of the employees incurred on payment of their fees and transportation charges. In the opinion of the Income‑tax Officer these expenses were not admissible deductions under section 10(2)(xiv‑a). He found that while these expenses were in fact incurred and subsidies to two schools in the field were given, but the recovery of fees from the students disentitled the assessee from claiming deductions under the proviso to clause (xiv‑a) of the subsection.
5. The case of the assessee before the Tribunal in this behalf was that sometime in 1955 there were agitations among the employees about the education of their children as at times they had to work in distant fields of operations of the company. As a result of this agitation, ultimately a compromise was arrived at between the employees and the company whereby one school was established in the assessee's premises to cater for the requirements of the children of the employees and their dependents. The company also subsidized two other schools situated in its operational fields, which were run by the local bodies. The main purpose of this arrangement was to allow peaceful conditions to prevail among the assessee's employees to enable them to devote their whole hearted attention to the work of the company. At the initial stage only transportation expenses were borne by the company and it was decided that nothing should be charged from the employees by way of fees etc. But subsequently some misuse of those concessions was noticed and, therefore, nominal fees were fixed. It was only in that connection that these expenses in question were incurred.
6. The Income‑tax Officer disallowed these expenses under the proviso to clause (xiv‑a) of subsection (2) of section 10 of the Act on the ground that the company was charging fees from the students for the services rendered. But in appeal the Tribunal was of the opinion that these expenses related directly to the carrying on of the company's business successfully as postings and transfers of the employees were becoming difficult and would have caused set back to its work if due educational facilities were not provided to the employees and their dependents. It was as a matter of business expediency that those above arrangements were made by the assessee for the education of the children and dependents of its employees and that too as a measure of compromise. The Tribunal, therefore, considered these expenses admissible under section 10(2) (xvi), which in its opinion was a more beneficial provision applicable to the facts and circumstances of the case. The Tribunal observed that :‑---
"On the basis of the facts admitted we are, however of the opinion that these expenses are legitimate business expenses incurred by the appellant‑Company to promote efficient running of its business.
Dissatisfied employees, for some reason or the other, could not contribute to the well‑being of the business itself. In our view these expenses are, therefore, covered by the section 10(2)(xvi) and even they are, for the sake of arguments covered by the provisions of section 10(2) (xiv‑a) there is no reason why the advantage of more beneficial provisions be refused to the appellant. Such an action would be against the cardinal principles of interpretation of statutes. If the appellant's case is covered as in our opinion it is by a more beneficial provision there is no reason why the same should be struck down only because it is not covered by a specific provision. By applying the tests laid down under section 10(2) (xvi) we find that the expenditure is neither capital nor personal in the nature and was incurred wholly and exclusively for the purpose of carrying on the appellant's business efficiently and smoothly and, therefore, we see no justification for its disallowance. In our view, therefore, the expenses should be admitted as legitimate deductions under section 10(2)(xvi)."
On these findings the Tribunal accepted the eleven appeals filed by the assessee by a consolidated order.
7. The Commissioner of Income‑tax has, therefore, filed these separate applications referring a common question of law reproduced above, arising out of the consolidated order passed by the Tribunal. In support of these references the learned counsel for the petitioner vehemently argued before us that the expenses laid out or incurred on educational institutions could be allowed as admissible expenditure in a case strictly covered by clause (xlv‑a) of subsection (2) of section 10 of the Act and not otherwise. There is this special provision meant for the purpose. But in this connection the assessee was admittedly charging fee from the students. As such under the proviso to clause (xiv‑a) of subsection (2) of section 10 the respondent was not entitled to any relief for the expenditure incurred on the education of the children and dependents of its employees. In developing his argument the learned counsel went on to add that the assessee in order to seek the relief claimed by him must bring his case strictly within the scope and ambit of the special provision meant for the purpose. In case for any reason its case is not found to be covered by that specific clause then it cannot fall back on and seek the same relief indirectly under a general and residuary clause under section 10(2)(xvi) of the Act. To support his contention in this behalf he relied on the maxim "generalibus specialia derogent" (special excludes the general). But in repelling this contention the learned counsel for the respondent‑assesses argued before us that various clauses under subsection (2) of section 10 of the Act are enumerative of the expenditures admissible for deduction from the income. profits and gains of an assesses. The clauses are cumulative and not exclusive of each other. They are enumerative of different categories, each a class in itself. They are in the nature of distinct and separate reliefs that may be allowed to an assessee in the computation of his profits and gains. None of these is general or a residuary clause. Each one of these clauses is a special clause in the sense, that independently of each other, they provide for the circumstances under which the assessee can be allowed the relief under each and every one of them. Moreover according to the learned counsel for the respondent the maxim "ge eralibus specialia derogant", on which the Department has relied in support of its contention, is not one of universal application and is not attracted in interpretation of subsection (2) of section 10 of the Income‑tax Act.
8. We have carefully weighed these arguments addressed before us at the hearing. Subsection (1) of section 10 of the Income‑tax Act lays down that the tax shall be payable by an assessee under the bead "Profits and gains of business, profession or vocation" in respect of the profits or gains of any business, profession or vocation carried on by him. In that connection subsection (2), however, provides for the mode of computation of profits or gains assessable to tax. It lays down that such gains or profits shall be computed after making the following allowances, namely those separately enumerated in clauses (i) to (xviii)'underneath it. In this case before us we are merely concerned with clauses (xiv‑a) and (xvi) of subsection (2) of section 10. Under clause (xiv‑a) in computing the profits and gains of business it is permissible to deduct‑----- ''any expenditure (not being in the nature of capital expenditure) laid out or expended on any educational institution or hospital established for the benefit of employees, their families and dependents or on the training of industrial workers;
Provided that no deduction under this clause shall be allowed where any charge is made for the service rendered by such institution or hospital."
The above proviso to this clause expressly lays down that no deduction under it shall be allowed where any charge is made for the services rendered by such institution or hospital. The case of the respondent before us in nutshell is that even if the benefit of this clause is not allowed to the company, the deduction for the expenditure in question incurred by the assessee was, nonetheless, admissible under clause (xvi) of subsection (2) of section 10. Under this clause in computing the profits or gains admissible deduction is allowed for‑--- "any expenditure (not being in the nature of‑ capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purposes of such business, profession or vocation."
According to the findings recorded by the Tribunal in appeal the expenses in question were legitimate business expenses incurred by the assessee‑Company to promote efficient running of its business. They were incurred wholly and exclusively for the purpose of carrying on its business efficiently and smoothly. It was a more beneficial clause and there was no justification for disallowing its advantage to the assessee.
9. The expenditure in question was actually incurred by the assessee in connection with the education of the children and dependents of its employees. But it was not allowed as an admissible deduction under clause (xiv--a) of the subsection (2) of section 0 of the Act. Was it then open to the Tribunal to fall back on the allegedly more beneficial provision contained in clause (xvi) for allowing a deduction of the same expenditure in another form? The answer to this question really depends on the true construction of section 10(2) and the scheme of the various clauses enumerated there under. Are these clauses cumulative and conjunctive or alternative and mutually exclusive in their scope and effect? Candidly speaking the answer to the question is not free from difficulty. At the hearing before us our attention was not drawn to any decided case directly dealing with the interpretation of clause (xiv‑a) in its relation to clause (xvi) of subsection (2) of section 10 of the Act. But some of the decided cases from the Indo-Pakistan Sub‑Continent were cited before us by both the parties in aid of Interpretation of those provisions in their own favour.
10. In the Commissioner of Income‑tax v. Haji Jamal Nur Mahomed & ,Co. (A I R 1925 Bom. 251) the facts were that the assessee‑firm invited capital advanced for its business and it was agreed that instead of interest on the advances the creditor shall be entitled to a share in the profit. The Court was of the opinion that the advances made by the creditor were in the nature of capital borrowed for the purposes of the business and under section 10(2)(iii) allowance could be made for the amount of interest paid on the capital borrowed and not for any share in the profits earned by the assessee. In that case the Court repelled the suggestion advanced on behalf of the assessee to the effect that even if clause (iii) was not applicable still the deduction would be admissible as expenditure incurred solely for the purpose of earning profits within (he meaning of clause (ix) corresponding to our clause (xvi) of subsection (2) of section 10 of the Act. In that connection the Court observed that :‑--
"It would be rather an anomalous result if under cl. (iii) which is directly applicable to capital borrowed for the purposes of the business, an allowance cannot be made, still it should be capable of being made under cl. (ix). There is considerable force in the argument urged on behalf of the Crown that in this case, if an allowance cannot be made under cl. (iii), it cannot be made at all."
11. In Subodhchandra Popatlal v. Commissioner of Income‑tax/Excess Profits Tax, Bombay North (.(1953) 24 I T R 566) it was held that where an expenditure falls under section 10(2)(x) of the Indian Income‑tax Act, 1922 (which corresponds to Section 10(2)(x) of our Act in Pakistan), in the sense that it is an expenditure in the nature of bonus or commission paid to an employee for the services rendered, then its validity can only be determined by the test laid down in it and not the test laid down in section 10(2)(xv) (corresponding to our clause (xvi). In that connection Chagla, C. J. of the Bombay High Court in his leading judgment remarked that;---
"Section 10(2(x) deals with a special case where a sum is paid to an employee over and above his salary as bonus or commission for services rendered. Section 10(2)(xv) deals with a case where an expenditure is laid out or expended wholly or exclusively for the purpose of business, and according to well established canons of construction when a statute deals with a special case it is not permissible to contend that the special case would also fall under the general provision in the statute. Section 10(2)(xv) deals with an those cases of expenditure laid out or expended wholly or exclusively for the purpose of business which do not fall under any other subsection of section 10(2)(xv). When an expenditure falls under section 10(2)(x) in the sense that it is an expenditure in the nature of bonus or commission paid to an employee for services rendered, then its validity can only be determined by the test laid down in section 10(2)(x) and not the test laid down in section 10(2)(xv)."
''This case was followed with approval by the High Court of Madras in N M. Rayloo lyer & Sons v. C. I. T./Excess Profits Tax, Madras ((1954) 261 T R 265). In that case also a question as to the application of clauses (x) and (xv) of subsection (2) of section 10 of the Income‑tax Act, 1922 was agitated and the Court observed that :‑
"As there is a specific provision in the Income‑tax Act, circumscribing, the limits under which a commission or bonus paid to an employee is to be allowed as a deduction, that specific provision in our opinion,. must prevail, and resort cannot in those circumstances be had to, section 10(2)(xv) of the Income‑tax Act. This is also the view taken by the Bombay High Court in Subodhchandra Popatlal v. Commissioner of Income‑tax. It is an accepted canon of construction of statutes that a specific provision always prevails and excludes a general provision. This aspect of the case, however, was not kept in mind by the Income‑tax authorities and the Appellate Tribunal in considering the claim for deduction put forward by the assessee. The departmental authorities and the Appellate Tribunal dealt with the claims as falling within the purview of section 10(2)(xv) of the Income‑tax Act."
In both these cases reliance was placed on the well known rule of constructions of statutes embodies in the maxim "generalibus specialia derogant" (the general excludes the special).
12. On the other hand the learned counsel for the respondent relied on Rathan Singh v. The Commissioner of Income‑tax to the Government of Madras (A I R 1926 Mad. 462) to contend that the clauses under subsection (2) of section 10 of the Act must be treated as disjunctive and cumulative and not construed as alternative and exclusive. Each one of them represents a separate head of relief that can be allowed to the assessee cumulatively. In that case the: facts were that assessee had a fleet of cars which he used to ply on hire. He bought an old car not to use it as a car but to resolve it into component elements and use the parts for casual repairs to his existing fleet of cars. He claimed deduction for the cost of this old car purchased by him for then purpose of his business. The High Court examined clauses (v), (vi) and (ix) (corresponding to clauses (v), (vi) and (xvi) of our Act) of subsection (2) of section 10 of the Indian Income‑tax Act. In that connection the Court observed that clause (v) allowed a deduction in respect of current repairs. Under clause (vi) deduction could be allowed in respect of depreciation. It was argued that the assessee having had the benefit of large deduction in respect of depreciation, under clause (vi), he could not get the same deduction, over again in another form by having recourse to clause (v). But this contention was repelled by the Court. In that connection the Court observed;------
"In our opinion, if the Legislature meant the various reliefs by way of' deductions specified in section 10 of the Act to be alternative ands exclusive they could very easily have said so and in our opinion if any deduction claimed falls within the express words of any one of the subsections it is not open to Government to say that it is really covered by the general provisions of subsection (vi)."
But the actual decision in the case did not rest on these observations. That apart, the Court relied on clause (Ix) which speaks in general terms of any expenditure (not being of in the nature of capital expenditure) incurred solely for the purpose of earning profits or gains. In the opinion of the Court the cost of old car for the sole purpose of using its bits and pasta for carrying repairs was admissible under clause (ix). In that connection the .Court remarked that :‑
"In this case we feel that the Legislature has done that which is so often done in Indian Acts and that enumerating too much and trying to cover every possible case, they have per incuriam given more than one deduction. But until and unless the Act is amended, we think that separate heads of reliefs must be treated as disjunctive and cumulative and hold that the deductions claimed, except as regards the first three items, fall within the express words of section 10(2) (xi)
The Court continued to further observe that;---
"We do not think it would be right to hold that what I may call the omnibus clause cl. (vi) can be construed as extinguishing the right to deductions which are specifically outlined and defined in other subsections of the Act."
These observations were made on the assumption that clause (vi) was in the nature of a general and an omnibus clause as compared to clause (ix) which was more specific. But we doubt if this assumption was in keeping with the entire scheme of subsection (2) of section 10 of the Act.
13. Before us the learned counsel for the respondent has strongly relied on the reported case of the Allahabad High Court in J. K. Woollen Manufatures Private Ltd. v. Commissioner of Income‑tax, U. P. ((1963) 48 I T R 346). In that case the assessee who had taken a textile mill on lease appointed a person as its power of attorney agent and this person in turn appointed his own son, who was only an undergraduate and who had no special engineering or business qualification, as general manager on a salary of Rs. 1,000 a month and other allowances and a commission of 25 per cent. on the net profits if such profits exceeded Rs. 1,00,000. The assessee claimed an allowance of a sum of Rs. 75,465 which it had paid as commission to the General Manager, but the Appellate Tribunal agreeing with the Appellate Assistant Commissioner held, on the above and other circumstances of the case, that the entire sum of Rs. 75,465 could not be regarded as having been wholly and exclusively laid out or expended for the purposes of the business and allowed only one‑half of this amount. The Court held that even if the amount was not allowable under section 10(2)(x) as sum paid to an employee as bonus or commission, it might still be admissible under section 10(2)(xv) of the Indian Income‑tax Act. In coming to this conclusion, the Court was not inclined to hold that the former was a special and the latter a general provision. The two provisions lay down different test and constituted different categories and not merely one a special category and the other general category. On this reasoning therefore, the Court expressly dissented from the view propounded in Subodhchandra Popatlal v. Commissioner of Income‑tax/Excess Profit Tax, Bombay North decided by the Bombay High Court. The Court observed that;----
"In this connection reference may once again be made to the ruling of the Bombay High Court in Subodhchandra Popatlal v. Commissioner of Income‑tax 24 I T R 566. In that decision it was laid down that section 10(2)(x) dealt with a special case and section 10(2)(xv) (prior to its amendment) was a general provision and according to, well established canons of construction when a statute dealt with a special case it was not permissible to contend that the special case would also fall in the general provision in the statute. Accordingly, it was held that when an expenditure fell under section 10(2)(x) then its validity could be determined only by the tests laid down under section 10(2)(x) and not by tests laid down in section 10(2)(xv). With great respect it is not possible to agree entirely with the view that whereas section 10(2)(x) dealt with a special case section 10(2)(xv) was a general provision. One may agree that section 10(2)(x) was specific to this extent that it dealt with bonus or commission alone and section 10(2)(xv) dealt with all classes of business expenditure including bonus or commission which are also business expenditure. If the matter had rested there it would have been possible to say that section 10(2)(x), the specific provision, excluded the operation of section 10(2)(xv), the general provision. What seems to have been overlooked in the Bombay decision is the fact that the two provisions lay down different tests and by reason of those tests the two provisions might very well constitute different categories and not merely the one a special category and the other a general category. This may be explained by pointing out that if an amount of commission paid to an employee does not satisfy the tests laid down under section 10(2)(x) it might still fall for consideration under section 1C(2)(xv) and may be allowable if it satisfied the test of having been laid out or expended wholly and exclusively for the purpose of the assessee's business. It may also be pointed out that a portion of the commission may be allowable under section 10(2)(x) if the finding is that that portion is reasonable having regard to the conditions laid down there and so far as the balance is concerned it may also be allowable if it satisfies the conditions in section 10(2)(xv)."
The learned author of the Law and Practice of Income‑tax by Sir Jatnshedji B. 'Kanga, 1969 Edition (page 410, foot‑note 1), has adversely commented on this case and submitted that these observations were incorrect. In this connection it may also be stated that in India clause (xv) (corresponding to clause (xvi) in Pakistan) was amended by the Income‑tax (Amendment) Act, 1953 by the addition into it of the words "not being an allowance of the nature described in any of the clauses (xi) to (xiv) inclusive." In our opinion this amendment introduced in the Indian Income‑tax was merely clarificatory in nature. We say so with respect and notwithstanding the observations made to the .contrary in case of J. K. Woollen Manufactures Private Limited. We may as well suggest here that perhaps a similar amendment, if introduced ;into our Act in force in Pakistan, will set at rest this controversy for the future.
14. In attempting to find a satisfactory answer to the question before us it is necessary to examine the scheme of the entire subsection (2) of section 10 of the Act. It lays down that for the purpose of income‑tax the profits or gains of a business shall be computed after taking due' allowance for the expenditure incurred under clauses (i) to (xviii) enumerated thereunder. Broadly speaking in computing the taxable income deductions from the profits and gains of a business are admissible inter alia for any expenditure on account of the business: any rent paid for the premises and its repairs interest on the borrowed capital; insurance premises; current repairs; depreciation allowed; sums paid on account of land revenue, rates and taxes; bonus or commission paid to employees; bad and doubtful debts; any sum laid out or expended on scientific research, educa tional institutions and hospitals established for the benefit of the employees and their families; any expenditure laid out or expended wholly and ex clusively for the purpose of the business, etc. These expenditures enumerat ed in subsection (2) of section 10 are admissible subject to the conditions laid down in the respective clauses. In our opinion these clauses constitute particular heads of account under which deductions are admissible from the profits and gains of a business and for matter of that each of these forms a separate and a distinct head of account for the purpose of the computa tion of taxable income of an assessee. Excepting clause (xvi), the remaining clauses are sufficiently specific and restrictive in laying down the limits within which the deductions are permissible. On the other hand the import of clause (xvi) is of general nature. It allows for any expenditure laid out or expended wholly and exclusively for the business. It is a general and a residuary clause as compared to its preceding clauses which are specially designed to allow for certain specified deductions within the limits prescribed by them. The Supreme Court of Pakistan in the Commissioner of Income‑tax, East Pakistan, Dacca v. Messrs The Engineers Ltd, Dacca (P L D 1967 S C 524) was of the opinion that clause (xvi) was residuary in nature. In the interest of harmonious construction of these clauses it is necessary to apply the rule "generalia specialibus non derogant" (the general excludes the special). Any other construction would mean that the general and a more com prehensive clause (xvi) will not only be over‑lapping but also destructive of most of the other clauses and the limitations laid in them. This can be best illustrated on reference to the instant case before us. In this case the expenses incurred by the respondent‑Company on educational institutions for the education of the children and dependents of its employees were considered to be inadmissible under the first proviso to clause (xiv‑a) because of the fact that. it was charging certain fees from them and the same expenditure cannot be allowed in another form by recourse to clause (xvi). Any other interpretation would, in the final analysis, render most of these clauses almost nugatory and redundant in the presence of this omnibus clause (xvi). We have, therefore, preferred to rely on a harmonious construction of all these clauses without doing least violence to any one of them.
15. Maxwell on his Interpretation of Statutes (Eleventh Edition) on page 168 in enunciating the rule "generalia specialibus non derogant" observed that :‑--
"A general later law does not abrogate an earlier special one by mere implication. Ueneralia specialibus non derogant, or, in other words) `where there are general words in a later Act capable of reasonable and sensible application without extending them to subjects specially dealt with by earlier legislation, you are not to hold that earlier and special legislation indirectly repealed, altered, or derogated from merely by force of such general words, without any indication of a particular intention to do so.' In such cases it is presumed to have only general cases in view, and not particular cases which have been already otherwise provided for by the special Act. Having already given its attention to the particular subject and provided for it, the Legislature is reasonably presumed not to intend to alter that special provision by a subsequent general enactment unless that intention be manifested in explicit language."
The ratio would equally apply to the interpretation of the various parts of the same statute. In this connection Craies on Statute Law (Sixth Edition) at page 221 observed that :‑---
"The rule is, that whenever there is a particular enactment and a general enactment in the same statute and the latter, taken in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and the general enactment must be taken to affect only the other parts of the statute to which it may properly apply. `For instance' said the same Judge in De Winton v. Brecon (1959) 28 L J Ch. 598), `if there is an authority in an Act of Parliament to a corporation to sell a particular piece of land, and there is also a general clause at the end that nothing in the Act contained shall authorise the corporation to sell any land and would not control the particular enactment, but the particular enactment would take effect notwithstanding that it was not clearly expressed and distinct and the insertion of the exception in the general clause would be supplied. If the Court finds a positive inconsistency and repugnancy, it may be difficult to deal with it, but so far as it can, it must give effect to the whole of the Act of Parliament'."
In this connection the Supreme Court of Pakistan in the matter of reference by the President of Pakistan under Article 162 of the Constitution of Islamic Republic of Pakistan P L D 1957 S C (Pak.) 217 at page 247 also relied on this maxim "generalla specialibus non derogant" (general words or provisions do not affect special words or provisions) that is, "if there be a conflict between a general provision and a particular or specific provision, the latter must override the former."
16. But in this connection on behalf of the respondent reliance was placed on Shidrao Narayanrao Gumaste Patil v. Municipality of Athni (A I R 1943 Bom. 21). In that case in interpreting section 60 of the Bombay District Municipal Act, 1961 the Court remaked :‑
"The rule expressio unlus eat exclusio alterius has to be applied with great caution, for, it is not of universal application and it cannot be applied unless the statute by its language shows that all things different in genus and description from those which are enumerated are intended to be excluded."
There can be no quarrel with the proposition and this rule of interpretation must not be applied indiscriminately. In this connection in the Commissioner of Income‑tax, East Pakistan, Dacca v. Messrs The Engineers Ltd., Dacca (P L D 1967 S C 524) the Supreme Court observed that was a well‑established rule of construction of statutes, although on the facts in that case the Court held that the scope of clause (xvi) of subsection (2) of section 10 of the Income‑tax Act, which was of residuary nature was thus wholly different from the sums included in clauses (xii), (xiv) and (xv). There being no similarity of subject- matter between clauses (xii), (xiv), (xv) and (xvi) of section 10(2) the rule generalibus specialla derogant was clearly not attracted.
17. As a result of the above discussion we are of the opinion that on the facts and in the circumstances of this case the Tribunal was not justified in holding that the educational expenses in question incurred by the assesse ‑could be allowed under section 10(2)(xvi) even though they were inadmissible under section 10(2)(xiv‑a) of the Act. Therefore, our answer to the above question referred to the High Court is returned in the negative. The respondent shall bear the costs of these petitions.
K. B. A. Reference answered.