| COURT: | Karnataka High Court |
| CORAM: | Alok Aradhe J, H. T. Narendra Prasad J |
| SECTION(S): | 90, Article 12 |
| GENRE: | International Tax |
| CATCH WORDS: | Fees for technical services, India-Singapore DTAA, retrospective operation, royalty, tax rate |
| COUNSEL: | K. V. Aravind, T. Suryanarayana |
| DATE: | September 15, 2020 (Date of pronouncement) |
| DATE: | November 7, 2020 (Date of publication) |
| AY: | 2006-07 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| Interpretation of statutes & DTAAs: The substitution of a provision results in repeal of earlier provision and its replacement by new provision. When a new rule in place of an old rule is substituted, the old one is never intended to keep alive and the substitution has the effect of deleting the old rule and making the new rule operative. Though Notification dated 18.07.2005 (which substitutes paragraph 12 of Article 12 of the DTAA to provide for levy of tax on the royalties or fees for technical services at a rate not exceeding 10%) issued u/s 90 came into force with effect from 01.08.2005, it applies to the entire fiscal year | |
Before proceeding further, we may advert to well settled rules of Interpretation with regard to taxing statutes. The substitution of a provision results in repeal of earlier provision and its replacement by new provision. [See: U.P.SUGAR MILLS ASSN. VS. STATE OF U.P.’, (2002) 2 SCC 645]. The aforesaid principle of law was reiterated by the Supreme Court in WEST UP SUGAR MILS ASSOCIATION V. STATE OF UP (2012) 2 SCC 773 and by this Court in GOVARDHAN M V. STATE OF KARNATAKA (2013) 1 KarLJ 497. When a new rule in place of an old rule is substituted, the old one is never intended to keep alive and the substitution has the effect of deleting the old rule and making the new rule operative.
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