MEMBER-SECRETARY, ANDHRA PRADESH STATEBOARD FOR PREVENTION vs ANDHRA PRADESH RAYONS LTD. & ORS.

The Supreme Court held that the Water (Prevention and Control of Pollution) Cess Act, 1977 must be strictly construed, emphasizing that the classification of industries for tax purposes should be based solely on the explicit language of the statute. The Court ruled that Rayon Grade Pulp does not fall under the categories of chemical, textile, or paper industries as defined in Schedule I of the Act, thereby upholding the High Court's decision to quash the assessment against Andhra Pradesh Rayons Ltd. The judgment established that the predominant purpose and process of an industry must be considered, rather than ancillary processes.