IOS Notes by Deeksha
IOS Notes by Deeksha
IOS Notes by Deeksha
e. Absurdity to be avoided:
When intention to tax is clear it cannot be defeated by a mere defect in
phraseology. In S. R. Batra vs Tarun Batra it was held that, an
interpretation which leads to absurdity and chaos in society should be
avoided.
b. Charging Section:
It was held in CWT vs Karan Singh that charging section has to be
strictly construed with the help of other relevant provisions for finding
out the true nature and character of the taxing statute.
c. Procedural Provisions:
It was held in Fertilizer Corporation of India Ltd. Vs. State of Bihar,
so long as the substantive provision is satisfied the procedural one can
be liberally construed.
d. Incentives:
A provision granting incentives for promoting economic growth and
development should be literally construed.
e. Exemption Provision:
Though the exemption provisions are to be strictly construed benefit of
doubt if any must be given to the assessee.
f. Exception Clause:
Exception provision must be strictly construed.
g. Penalty Provision:
Penalty provision in taxing statute does not attract the rule of
presumption of mens rea.
h. Provisions on Limitation:
Provisions regulating limitation period should be given strict
construction.
Double Taxation:
In Jain Brothers vs. UOI, the SC held an express provision cannot be
held invalid on the ground that it resulted in double taxation.
Validation Act:
If a tax is declared by a court to have been illegally levied under invalid
provisions of an act, a validating act can remove the defects in the
principal act, so as to validate the tax.
Evasion of tax:
Tax evaders often do things which are prohibited by the statute under
the dour or cloak of a transaction which is not prohibited by the statute.
In such circumstances, the court can go behind the form of the sham
transaction and enforce the prohibition.
Welfare Legislations:
In case of social benefit oriented legislation i.e.., Social Welfare
Legislation, for example The Consumer Protection Act, 1986, its
provisions should be construed as broadly as possible in consumers
favour to obtain the purpose of the enactment. However it has to be
remembered that in doing so, no violence to the language is permitted
(Stare of Karnataka vs. Vishwabharathi House Building Corporation).
Penal Statutes:
Penal Statutes are statutes which provide punishments/ penalties for
the offences committed by the persons. Sec.2 of the Indian Penal Code
declares that every person shall be liable to punishment under the code
for every act or omission of which he shall be guilty within India. A
person who is in India, instigating the commission of an offence outside
India, is also liable to punishment under Indian Penal Code.
According Sir William Blackstone, “Crime is a violation of the public
rights and duties due to whole community, considered as a
community”.
Interpretation/ Construction of Penal Statutes:
Mens rea refers to the criminality of the act. It may mean different
things in relation to different types of crimes. In general actus reus and
mens rea mean the conduct of the accused and his state of mind at the
time of committing the crime. The Parliament applies this principle to a
statutory offence.
Deals with wrongs against an Deals with the wrongs against the
individual. State.
They deal with those matters They deal with those matters
which affect the individual only. which affect the whole community
A.Obliteration:
Except as to transactions past and closed, a statute after its repeal is as
completely obliterated as if it had never been enacted.
C.Revival:
Another result of repeal under Common Law Rule is to revive the law in force
at the commencement of the repealed statute. Thus if one statute is repealed
by a second which in turn by a third, the effect is to revive the first statute
unless a contrary intention is indicated in the third statute.
The above transfer of lands came under “Doubling of Estates”. The English
Parliament thought that Doubling of Estates must not be allowed to public
educational or religious institutions. So it enacted an Act called “The Statute
31 Henry VIII” to prevent such transaction. Based on the above Act, the
British Government unilaterally cancelled the leases.
Heydon who was the fourth party in the above transaction challenged the
above enactment of parliament as unconstitutional.
The HOL held that the above enactment namely The Statute 31 Henry VIII
was valid, as the object of the Parliament was to protect the properties of
educational, ecclesiastical and religious institutions. It also held that transfer
by leases creating Doubling of Estates is the mischief and against the true
meaning and object of the Act.
If there are two or more interpretations possible for the material words of a
statute, then for the sure and true interpretation, there are certain
considerations which are in the form of questions:
The Judge should always try to suppress the mischief and advance the
remedy.
Smith vs. Hughes
The fact of the case is that certain prostitutes attracted prospective customers
from the balconies and windows of their houses. The question to be decided
was whether soliciting “ in a street” and hence a street offence as provided
under Sec.1(1) of the Street Offences Act, 1959.
Applying the mischief rule, it was held that they were in fact, soliciting “ in a
street” and thus the place from where they were doing so was of no
consequence. The Act was intended to clean up the streets to enable people
to walk along the streets without being molested or solicited by prostitutes.