INTERPRETATION OF TAXING STATUTE


We, the people of India resolved to constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC to secure to all our citizens: justice, social, economic and political. Freedom of thought, speech, belief, belief and worship. Equality of several positions; and the promotion of brotherhood among us as a whole, a guarantee of human dignity and unity and national dignity.

The Government of India is divided into three branches: legislature, administration and judiciary. It is the legislator's job to enact and enforce laws and enforce them. The legislature has the authority to impose taxes under Article 265 of the Constitution, stating that "unless you have the authority of law, no taxes are levied." Through this article, the legislature was able to impose taxes and establish various rules for imposing taxes.

Interpretation means to give meaning to some words that are ambiguous or ambiguous by looking at the intent of the legislature, the purposes of law enforcement, or the losses that were removed before this law was enacted. It is common for words to be given a literal grammatical meaning. But if there is ambiguity, help with the translation by understanding the context in which the words are used. It is given a similar definition that undermines the goals of the law and seems to be the goals of the legislature. The actual implementation is different from planning and law enforcement. It is the job of the judiciary to interpret the laws passed by the legislature. The role of the judiciary is to apply parliamentary rules based on the law.


Tax Systems in India

The British tax system of India reflects the characteristics of the traditional agricultural economy. Tax revenue dominates central government revenue. Domestic demand for manufactured goods is taxed because domestic demand for manufactured goods often pays for imports from the UK and other federal countries. Imports are covered in almost all imported goods, but the main elements of the export tax are soft and tea and India is the closest to the world market. Usually, different taxes are passed.


Need & Importance of Interpretation

As the social, economic and political climate of society changes, so does the interpretation of the law. The council does not have the resources to respond to these climate changes, and the council cannot predict all the conditions that may actually occur. Therefore, it is the courts that play a role in interpreting the law according to the needs of the people.


THE TAX LAWS

Tax laws are highly complex, complicated and beyond the understanding of a tax-payer. The words and expressions used are not simple. Many sections contain subsections, clauses, sub-clauses. Many deeming provisions have been inserted. The meaning of an expression is extended by way of Explanation and is curtailed by way of a proviso, sometimes more than one provisos and explanations meaning differently.





Reasons for applicability of strict rule on taxation statute

Taxes are the difficulty of deducting money from taxpayers (taxpayers) through large corporations who are not entitled to insurance benefits. Therefore, taxes impose a heavy burden on taxpayers and therefore sanctions are imposed on taxpayers who are under the jurisdiction of the law. Therefore, taxes cannot be collected unless the law clearly states the tax.

Tax law is a budget rule that is applied incorrectly. It is not in the legislator’s interest to prescribe situations or situations that may occur after the enactment of the law. Assesse may use certain restrictions of the law such as concealment and use. Taxes impose a financial burden, so in the event of a dispute, the accountant will receive a suspicious benefit.

With the strict rules governing tax laws, the court must give full meaning to the term without examining the consequences that may follow. There is no tax calculation or legal purpose except for explicit and specific information. Therefore, it is the legislature or its subordinates who come to present amendments and explanations to clarifications to rectify the loopholes.

Thus, direct meaning is given to words used in the statute and in case of two interpretations coming out then in that case that such interpretation is given, which is in favour of the taxpayer. Until and unless, clear words are used in the statute which imposes the liability on the taxpayer, there can be no burden to pay tax.


Principle of Strict Construction

The structure of tax law provides a great opportunity for proceedings. For this purpose, the principles of translation should be applied. These principles are incomplete and depend on the accuracy of each case. The two most important principles of interpretation that apply to tax law are:

(1) There is no tax equality, and strong or physical principles of action apply to the interpretation of tax law. So, in simple terms, if a researcher has two benefits available, he must give them both. Same as you.

(2) If there are two possible interpretations of tax law, it is necessary to accept the priority. The theory of strict interpretation of tax law is Bowlatt J in his regular statement at Cape Brandy Syndicate v IRC Best information. (1 KB 64, 71): "In the tax law, it remains only to see what is clearly stated. No intention. No self-interest in tax. No tax assessment. Nothing is loaded and nothing is involved. You can see which words are used correctly. If the income is satisfied to the court that the case was in connection with the provisions of the law, the tax may be paid. Due to the provisions of the tax law, it is not possible to collect taxes by thinking, analyzing or observing the provisions of the law and examining the nature of the problem. Tax deductions are mandatory for return reasons. It is a well-established principle that tax exemption is for taxpayers only. Taxes such as excise tax are strictly enforced on the plaintiff.

Recently, in the case of Manila North Tollways Corporation vs. Commissioner of Internal Revenue, The Court of Appeal (CTA) reiterated its position that it had time to re-apply the principles of this tax exemption law and that an application for tax deduction had to be submitted before the illness saved the contract. At the same time, the applicant applies for a refund to the Internal Revenue Service (ITAD) for more than one year after filing a double tax exemption and paying the benefits to shareholders. The court noted that the plaintiffs did not comply with the procedures established under taxes. Memorandum of Understanding (RMO) no. Tax deduction benefits must be filed through this application at least 15 days prior to payment of the 1-2000 surplus. As a result, the court rejected the applicant's claim for tax denial for violation of this provision. It is a clear interpretive principle that the law should be read in its usual, natural and grammatical sense.


In the case of C.I.T. vs. B. M. Kharwar

Asesee has pushed some engines from the company to a smaller liability company. He tried to avoid taxation imposed on the value of the machine, especially because the transaction was only a step towards normalizing the business relationship of the partner. transaction law to describe the instruments received by each party, but the legal effect of the transaction is to investigate the "origin of the transaction." He dismissed the allegation, saying it could not be replaced.

1. http://www.legalservicesindia.com/article/1451/Interpretation-of-taxing-statute-as-strict-construction-and-exemption.html

2. https://blog.ipleaders.in/interpretation-taxation-statute/

3. https://www.bcasonline.org/Referencer2016-17/Taxation/Income%20Tax/interpretation_of_taxing_statutes.html

4. https://www.wirc-icai.org/images/material/Basic-Tenets-of-Taxation-Interpretation-of-Taxing-Statutes.pdf


Author: Alisha Dargar

BBA LLB, 2nd Year

UNITED WORLD SCHOOL OF LAW, GANDHINAGAR, GUJARAT

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