| COURT: | Supreme Court |
| CORAM: | A.K. Sikri J., Rohinton Fali Nariman J. |
| SECTION(S): | 119 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | binding effect, interpretation of statutes |
| COUNSEL: | - |
| DATE: | October 6, 2015 (Date of pronouncement) |
| DATE: | November 23, 2015 (Date of publication) |
| AY: | - |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| CBDT & Govt are bound by their own interpretation of a statutory provision. Principle of "contemporanea expositio" explained. The word "or" can be interpreted as "and" if the former leads to unintelligible and absurd results | |
The Supreme Court was concerned with whether or not the manufacturer/exporter is entitled to rebate of the excise duty paid both on the inputs and on the manufactured product, when excise duty is paid on a manufactured product and also on the inputs which have gone into manufacturing the product and such manufactured product is exported? HELD in that context by the Court:
(i) It is to be borne in mind that it is the Central Government which has framed the Rules as well as issued the notifications. If the Central Government itself is of the opinion that the rebate is to be allowed on both the forms of excise duties the government is bound thereby and the rule in-question has to interpreted in accord with this understanding of the rule maker itself. Law in this respect is well settled and, therefore, it is not necessary to burden this judgment by quoting from various decisions. Our purpose would be served by referring to one such decision in the case of R & B Falcon (A) Pty Ltd. v. Commissioner of Income Tax (2008) 12 SCC 466 wherein interpretation given by the Central Board of Direct Taxes (CBDT) to a particular provision was held binding on the tax authorities.
(ii) We are also of the opinion that another principle of interpretation of statutes, namely, principle of contemporanea expositio also becomes applicable which is manifest from the act of the Government in issuing two notifications giving effect to Rule 18. This principle was explained by the Court in Desh Bandhu Gupta and Co. and others v. Delhi Stock Exchange Association Ltd.2 in the following manner: It is a well-settled principle of construction that courts in construing a statute will give much weight to the interpretation put upon it, at the time of its enactment and since, by those whose duty it has been to construe, execute and apply it. I do not suggest for a moment that such interpretation has by any means a controlling effect upon the Courts; such interpretation may, if occasion arises have to be disregarded for cogent and persuasive reasons and in a clear case of error, a Court would without hesitation refuse to follow such construction.
(iii) Interpretation of word ‘OR’ occurring in Rule 18: We are conscious of the principle that the word ‘or’ is normally disjunctive and ‘and’ is normally conjunctive (See Union of India v. Kamlabhai Harjiwandas Parekh and others3). However, there may be circumstances where these words are to be read as vice-versa to give effect to manifest intention of the Legislature as disclosed from the context. Of course, these two words normally ‘or’ and ‘and’ are to be given their literal meaning in unless some other part of same Statute or the clear intention of it requires that to be done. However, wherever use of such a word, viz., ‘and’/’or’ produces unintelligible or absurd results, the Court has power to read the word ‘or’ as ‘and’ and vice-versa to give effect to the intention of the Legislature which is otherwise quite clear. This was so done in the case of State of Bombay v. R.M.D. Chamarbaugwala (1957) 1 SCR 874
i wonder what kinds of statutes are mode and what kind of sub delegation rules they make, appears the governance itself is a contemporania absurdum.
court is right in its view, after all the departments contradictory positions it cannot take advantage it has to go by its own mechanism of assessing their own positions only why waste the courts time?
Sir, totally agree with you. It is well-settled Circulars Issued under section 119 are for proper administration of statute and Mitigate the rigours of provisions of law. They are binding and enforceable against revenue authorities.
If right is given, the same cannot be deprived or taken away by a circular .
If beneficial to assesse, must be given effect to.
Courts should bunch such cases where AOs have not followed CBDT circulars and dispose them off summarily to save valuable judicial time and reduce pendency of cases in courts.better still CBDT itself review pending appeals and where it’s circulars have not been followed by AOs the appeals can be withdrawn suo moto. Let us save valuable time of judiciary and department.
Sir,
In my legal practice since 1981, with my previous experiences backing of civil services on, professorial work in universities, faculty work in several in-house training consulting programs to industries,PSUs, pvt sector, banks & so on, advising clients of all kinds to fight out their cases, reading of government regulations ever growing, I find, No Law, like Bible or Gita was certain.
Reasons:
Constitution guarantees freedom and Common Law guarantees justice, we are surprised taking pride that India today is government of laws and not by men..I mean lifeless some kind of abstraction.
Common Law is indeed a compilation of all relevant judge made laws over several decades or centuries of judging by judges.
And that way it helped preparation of Codes but I wonder do we really understand what is meant by common law or Codes of procedure?
When very draftsman himself is, if not aware of how could I blame the faceless public servant, who has to use that ‘lifeless’ rules, regulations, laws;
that way Indian administrative laws are indeed useless for any citizen, though he spends his hard earned moneys on these lawmakers by electing them;
and so called legal draftsmen to draft laws;
by paying so called taxes by citizens to maintain them;
in fact he is in a most sadest = worst disadvantageous position today, after all every morning he gets up;
he faces the so called ‘automaton’ of government of laws, not men just because man has some humanity;
but how could you expect from robotic governments of laws!
You said that honorable court need to compile the laws relevant for them , I appreciate but what for we have these so called law makers, at very heavy costs;
if they have to make Codes for the law makers, then why do we need law makers;
why we need to take the burden of paying the such expensive taxes.
I really appreciate your good due concern.
if the courts do;
still these worthy law makers would go on complicating laws as they do not understand the principle:
Making law if clear, detailed, it should serve and help man on the street to know exactly what he is required to do;
if that happens then why there would be so much litigation at all?
so it shows, where the defect lies one needs to know..;
that is the kind of thought the judgement here had been given by the court in a most subtle way;
Benjamin Cardazo said in 1920s the ‘common law also , ‘is at bottom the philosophy of pragmatism. Its truth is relative, not absolute’.
After all no law is sacrosanct, as such; for it is an ever color changing chemelion like structure.
you might have seen every finance minister comes with some new new rules or regulation why some laws every year.
why the finance act itself is not so confusing to very implementing public servant, when so how could you expect the simple citizen to understand and comprehend:
when the very finance minister himself could not rightly comprehend what he did by those acts in his Finance Acts
Its truth is relative, not absolute’ he added.
sir. tks n regds.