Compilations of case law: General Topics: INTERPRETATION OF STATUTES

INTERPRETATION OF STATUTES

Words to be given plain grammatical meaning
Orissa State Warehousing Corpn. Vs CIT (SC) 237 ITR 589
CIT Vs Gautam Sarabhai Trust (Guj) 173 ITR 216
CBDT Vs Cochin Goods Transport Associate (Ker) 236 ITR 993
G. Rao Electrodes Ltd. Vs CIT (Ker) 173 ITR 351
CIT Vs Casino (P) Ltd. (Ker) 91 ITR 289
M.P. Poddar (HUF) & Anr. Vs Appropriate Authority & Anr. (Del) 240 ITR 372

Word of analogous meaning coupled together – General word to be construed in the restricted sense in which the analogous less general word is used.
G. Claridge and company Ltd. (SC)(1991) 2 Supreme Court cases 229
Dr. Devendra M. Surti (SC) AIR 1969 Supreme Court 63

Definition of expression in one statute cannot automatically be applied to another statute.
CIT Vs Vasan Publications P. Ltd. (Mad) 159 ITR 381
CIT Vs Buhari Sons P. Ltd. (Mad) 144 ITR 12

Provision of another statute does not apply ipso facto but guidelines under such provision may be applied.
CGT Vs Prithvi Nath Sharma (Guj) 239 ITR 809

"Income" – meaning – should be the same as that of word occurring in legislature list –is of widest amplitude and must be given natural and grammatical meaning
CIT Vs G.R. Karthikeyan (SC) 201 ITR 866

When the meaning of words is clear and unambiguous, the Court has to give effect to it whatever be the consequences, as the Court has no jurisdiction to mitigate harsh consequences of the statute, if any.
Patil Vijayakumar & Ors. Vs Union of India & Anr. (Kar) 151 ITR 48

Words take colour from context in which they are used.
CIT Vs Venkateswara Hatcheries (P) Ltd. (SC) 237 ITR 174

Dictionary meaning of words not to be adopted where context conveys different shades of meaning.
CIT Vs Anand Theatres (SC) 244 ITR 192

'Etc.' means things of same character or those things "ejusdem generis"
CIT Vs Maulana Tea Co. (Ker) 244 ITR 589

No retrospectivity unless expressly stated or clearly implied
Virtual Soft Systems Ltd. Vs CIT (SC) 289 ITR 83
Gem Granites Vs CIT (SC) 271 ITR 322

It is necessary to spell out the degree of retrospectivity of a statutory provision from the language of the provision itself.
Union of India & Anr. Vs Raghubir Singh (SC) 178 ITR 548

An explanation brought in the statute Book is ordinarily clarificatory in nature and has retrospective effect.
Laxmi Industries Ltd. Co. & Ors Vs ITO & Anr. (Raj) 231 ITR 514
Beneficial provision does not necessarily imply that the amendment is to be given retrospective effect, unless specifically made it as retrospective in operation.
CIT Vs Pooshya Exports (P) Ltd. (Mad) 262 ITR 417
CWT Vs Reliance Motor Co. Ltd. (Mad) 260 ITR 571
CWT Vs B.R. Theatres & Industrial Concerns (P) Ltd. (Mad) 272 ITR 177

When a particular enactment or amendment is the result of the recommendation of the Law Commission, it is permissible to refer to the relevant report of the Commission.
It cannot be said to be an invariable rule that a statute could not be retrospective unless so expressed in the very terms of the section which had to be construed.
When an Act is declaratory in nature, the presumption against its retrospectivity is not applicable.
Mithilesh Kumari & Anr. Vs Prem Behari Khare (SC) 177 ITR 97

Effect of substitution of one provision by another – substituted provision deemed to be part of act from very inception.
K.T. Venkatappa & Ors. Vs K.N. Krishnappa & Ors. (Kar) 173 ITR 678

Prospective over ruling – Declaration of invalidity by SC to take effect from date of judgement.
Somaiya Organics (India) Ltd. & Anr. Vs State of Uttar Pradesh & Anr. (SC) 251 ITR 20

No prospective overruling unless so specified by SC.
M.A. Murthy Vs State of Karnataka & Ors. (SC) 264 ITR 1

When a statutory provision is interpreted by the Supreme Court in a manner different from the interpretations made in the earlier decisions by a smaller Bench, the law laid down by the larger Bench would constitute the law of the land and is to be regarded as law as it always was unless declared by the Court itself to be prospective in operation
Southern Industrial Corpn. Ltd. Vs CIT (Mad) 258 ITR 481

Interpretation in conformity with object of provision
American Hotel and Lodging Association Educational Institute Vs CBDT (Del) 289 ITR 46

Marginal note or heading – can be taken into account to arrive at reasonable construction.
Shree Sajjan Mills Ltd. Vs CIT & Anr. (SC) 156 ITR 585

The preamble of a statute is apart of the Act. And is an admissible guide to construction. Preamble is to express the scope, object and purpose of the Act.
Secretary, Regional Transport Authority Vs D.P. Sharma AIR 1989 SC 509 pp. 511

Speech of Finance Minister can be referred to ascertain object of legislation.
Soorajmull Nagarmull Vs CIT (Cal) 190 ITR 418

Legislative history and Circulars of CBDT can be used as aids for interpretation of provisions.
CIT Vs M.K. Vaidya (Kar) 224 ITR 186

Press note issued by Finance Ministry – Does not have force of law
Tarak Nath Paul Vs CWT (Cal) 142 ITR 468
Result of interpretation should not give rise to absurdity.
ITO Vs. H.P. Vishweswaraiah (Kar) 250 ITR 863
Chartered Housing v. Appropriate Authority (Kar) 250 ITR 1

If a strict and literal construction of the statute leads to an absurd result, i.e., a result not intended to be sub served by the object of the legislation ascertained from the scheme of legislation, then, if another construction is possible, apart from the strict literal construction, that construction should be preferred to the strict literal construction.
CIT Vs Gotla J.H. (SC) 156 ITR 323
K.P. Verghese Vs ITO & Anr. (SC) 131 ITR 597
CIT Vs Malayala Manorama & Co. Ltd. (Ker) 143 ITR 29
Ansal Properties & Industries Ltd. Vs Appropriate Authority & Ors. (Del) 236 ITR 793
ITO Vs Bharthi Trust (ITAT, Ahd) 60 ITD 261
CIT Vs P.K. Noorjahan (SC) 237 ITR 570
Nayantara G. Agrawal Vs CIT (Bom) 207 ITR 639
CWT Vs K.S. Vaidyanathan (Mad) 153 ITR 11
C.W.S. (India) Limited etc. Vs CIT (SC) 208 ITR 649
CIT Vs Laxmi Metal Industries (All) 236 ITR 130
V. Guruviah Naidu & Sons Vs CIT (Mad) 216 ITR 156
Shree Sajjan Mills Ltd. Vs CIT & Anr. (SC) 156 ITR 585

Sometimes one finds two or more enactments operating in the same field and each containing a non obstante clause stating that its provision will have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. The conflict in such case is resolved on consideration of purpose and policy underlying the enactments and the language used in them
Sarvan singh Vs Kasturilal AIR 1977 SC 265 pp. 274-275
Ashoka Marketing Ltd. Vs Punjab National Bank AIR 1991 SC 855 pp. 878-879

Legal fictions are limited to the purpose for which they are created and should be taken to their logical end in application of the fiction to the facts the Court has to consider.
Chidambaram Mulraj & Co. Pvt. Ltd,. Vs CIT (Bom) 58 ITR 206

When language is vague and is capable of different interpretations, Court may derive some guidance from speech of Minister – Views expressed in reports need not be considered.
Delhi Flour Mills Co. Ltd. Vs CIT (Del) 95 ITR 151

The provisions in a taxing statute dealing with machinery for assessment have to be construed by the ordinary rules of construction, that is to say, in accordance with the clear intention of the legislature, which is to make a charge levied effective.
Sardar Harvindar Singh Sehgal & Ors. Vs ACIT & Ors. (Gau) 227 ITR 512
Gursahai Saigal Vs CIT (SC) 48 ITR 1
Jayalakshmi Leasing Co. Vs ACIT (ITSC-SB) 228 ITR (AT)1

Principle of beneficial interpretation would apply only in a case where the Court is in doubt about the true scope and ambit of the provision or finds two equally reasonable interpretations and not where the words of the statute are plain, precise and unambiguous.
Indian Rayon Corporation Limited Vs CIT (Bom) 231 ITR 26

Specific provision over-rides general provisions
South India Corporation Vs Secretary, Board of Revenue, Trivandrum AIR 1964 SC 207 pp. 215
Provision granting exemption – Strict construction.
Kota Co-operative Marketing Society Ltd. Vs CIT (Raj) 207 ITR 608
CIT Vs Orissa State Warehousing Corporation (Ori) 201 ITR 729
Renuka Datla Vs CIT & Anr. (AP) 240 ITR 463
Novopan India Ltd. Vs Commissioner of Central Excise 1994 (73) E.L.T. 769 (SC)

No ambiguity in the provisions of the statute – Provisions cannot be interpreted to confer benefit on assessee
Seshasayee Paper & Boards Limited Vs DCIT (Mad) 272 ITR 165
IPCA Laboratory Ltd. Vs DCIT (SC) 266 ITR 521

"Casus omissus" – Matters which should have been provided but not provided for in a statute – cannot be supplied by Courts.
Laxmandas Pranchand & Ors. Vs Union of India & Ors. (MP) 234 ITR 261
CIT Vs R.J. Trivedi & Sons (MP) 183 ITR 420

Executive instruction can only supplement statute – cannot curtail the statute or whittle down its effect.
State of M.P. & another Vs G.S. Dall and Flour Mills (SC) 187 ITR 478

Decision is an authority for what it actually decided and not for what follows from observations made while deciding case.
Nav Nirman P. Ltd. Vs CIT (MP) 174 ITR 574
CIT Vs Sun Engineering Works (P) Ltd. (SC) 198 ITR 297

Interpretation of orders of Courts & Tribunals must be in context of actual findings.
Thanthi Trust Vs ACIT (Mad) 238 ITR 117

Subsidiary and integral transactions have to take colour from Principal transactions.
Hindalco Industries Ltd. Vs ACIT (ITAT, Mum) 94 ITD 242

A party cannot escape the consequences of law merely by describing an agreement in a particular form though in essence and in substance, it may be a different transaction.
CIT Vs Panipat Woollen & General Mills Co. Ltd. (SC) 103 ITR 66

Compulsive provision will control a discretionary provision
Life Insurance Corporation of India Ltd. Vs S.V. Oak AIR 1965 SC 975 pp. 980

If a provision is mandatory, an act done in breach thereof will be invalid, but if directory, the act will be valid although non-compliance may give rise to some other penalty if provided by the statute
C. Drigraj Kuer Vs Amar Krishna Narain singh AIR 1960 SC 234 pp. 449, 451
Union of India Vs Tulsiram Patel AIR 1985 SC 1416

Once it is shown that the case of the assessee comes within the letter of law, he must be taxed, however greater the hardship may appear to the judicial mind, to be.
Tarulata Shayam & ors. Vs CIT (SC) 108 ITR 345
CWT Vs K.S. Vaidyanathan (Mad) 153 ITR 11
Padmasundara Rao (Deceased) & Ors. Vs State of Tamil Nadu & Ors. (SC) 255 ITR 147
ACIT & Ors. Vs Velliappa Textiles Ltd. & Ors. (SC) 263 ITR 550
Prakash Nath Khanna & Anr. Vs CIT & Anr. (SC) 266 ITR 1