TMI BlogRule of interpretation for the Constitution of India / empowering enactments and other laws in India brief discussion in view of recent judgment of the Supreme Court.X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule of interpretation for the Constitution of India / empowering enactments and other laws in India brief discussion in view of recent judgment of the Supreme Court. - By: - DEV KUMAR KOTHARI - Other Topics - Dated:- 16-11-2022 - - Recent Judgment: M/S. OCL INDIA LTD. VERSUS STATE OF ORISSA ORS. - 2022 (11) TMI 287 - SUPREME COURT Judgment followed and rules reiterated: NAV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... INCHANDRA MAFATLAL, BOMBAY VERSUS COMMISSIONER OF INCOME-TAX, BOMBAY CITY - 1954 (11) TMI 6 - SUPREME COURT And various other cases laws referred therein. Constitutional and other laws: Central Government, State Governments and also local governments derive power to impose any tax, duty, cess, fees as per provisions of The Constitution of India. (Earlier the Government of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Act, 1935 was empowering provision in palce of COI) According to the power conferred by the COI tax laws are framed and implemented by Governments. If any tax law is not within scope provided in the COI, then that provision can be held ultra vires or beyond powers conferred by COI. Rule is that provisions of COI and various entries in Schedules therein conferring power are to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interpreted in wider manner and not restricted manner. Recently in OCL India Ltd Vs State of Orissa (Supreme Court three judges bench) while considering provisions relating to Entry tax this rule has been reiterated and applied while ascertaining meaning and scope of words local area and keeping in mind purpose of insertion of Article 243Q and wider entry in state list, In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard paragraph 47 of the judgment is reproduced below with highlights added 47. It is also a cardinal rule of interpretation that words of a taxing statute should be read in their ordinary, natural, and grammatical meaning . Further, in construing the words in a constitutional enactment that confers legislative power, a liberal construction should be placed upon the words so that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey may have effect in their widest amplitude. About case of Navin Chandra Mafatlal supra: This case related to levy of income-tax on capital gains vide Section 12-B that was inserted in the Act by the Indian Income-tax and Excess Profits Tax (Amendment) Act, 1947 (XXII of 1947) which was a Central Act. Section 100 of the Government of India Act, 1935, ( now corresponding is The Consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution of India) the Central Legislature was empowered to make laws with respect to matters enumerated in List I in the Seventh Schedule to that Act. The only entries in List I on which reliance could be placed to uphold the impugned Act were entries 54 and 55 which were as follows :-- 54. Taxes on income other than agricultural income. 55. Taxes on the capital value of the assets, exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sive of agricultural land, of individuals and companies, and taxes on the capital of companies. Although in this case there was no initial challenge by way of petition before the High Court or the Supreme Court (like Writ Petitions now) about competency to levy such tax. Rather tax assessed and levied in assessment was challenged as not within power, in appeals till Supreme Court the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge was as a routine Income tax appeal or reference. In this case about interpretation of laws the Supreme Court concluded as follows: The cardinal rule of interpretation, however, is that words should be read in their ordinary, natural and grammatical meaning subject to this rider that in construing words in a constitutional enactment conferring legislative power the most liberal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction should be put upon the words so that the same may have effect in their widest amplitude. Unquote: Furthermore, provisions of tax laws are generally to be interpreted in strict manner particularly in relation to charging section. In case of other provisions sometimes a liberal, wider or narrower interpretation can be adopted in purpose seeking manner and to serve objects of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any provision. Readers can undertake in-depth study on rule of interpretation by searching case laws with search criterion like ultra vires , unconstitutional, ultra vires the Constitution, ultra vires the Act, beyond powers and other similar searches. Readers are also requested to share their knowledge on wider and important issue of interpretation. - - Scholarly articles for k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... 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