Taxation depends upon the language of the charging section and what is brought to tax within the four corners of the charging section. Therefore, one should be careful and cautious when applying the ratio of judgments relating to one tax enactment as a precedent in a case relating to another tax enactment. This rule of caution is important and should not be overlooked, especially when the language of the enactment and the object and purpose of the enactment are different.
Muthoot Leasing and Finance Ltd v. CIT (2023) 450 ITR 496/ 292 Taxman 5/ 330 CTR 209(SC)
Interpretation of taxing statutes — Precedent – Ratio of judgments relating to one tax enactment not to be treated as precedent in case relating to another tax enactment — Especially when language, object and purpose of enactments are different.[ Interest-tax Act, 1974, S. 2(5A), 2(5B), 2(7) ]