1. CODIFYING AND CONSOLIDATING STATUTES
1 Codifying statutes
Codifying Acts are passed to codify the existing law. It is one which purports to state exhaustively the whole of the law upon a particular subject including pre-existing and common laws.
The purpose of codifying statute is to present an orderly and authoritative statement of the leading rule of law on a given subject.
Ex: Code of Civil Procedure, 1908
Codification systematizes case-law as well as statutes
The codifying Act is presumed not to alter the law unless a contrary intention appears.
Lord Herschell observed that the principles applicable for construction of codifying statutes are two:
a Firstly, the language of the statute should be examined; and b Secondly, natural meaning of the statute should be lo
c oked for without getting influenced by any considerations as to previous state of law.
The law should be ascertained by interpreting the language used, instead of, as before, by roaming over a vast number of authorities in order to discover what the law was, an appeal to earlier decisions can only be justified on some special ground.(Bank of England v. Vagliano Brothers, 1891 AC).
Acc. To Crawford – “The object of a revision or codification…. Is to clarify existing statute law and make it easily found. Consequently it is really more than a mere restatement. A re examination of the exiting statute law is
necessarily implied. But the restatement may be in the original language of the statute. Or words and phrases may be altered, new matter incorporated, and statutes even omitted from the revision or codification. And after the revision or codification has been adopted, it becomes the reservoir of all the statute law on the subjects indicated by various titles; the revision being a substitute for the displacing the former law. As a result, any errors must be corrected by
legislative amendments after the revision or code has been enacted into law… Not only may the statutes composing the codification be relocated but their language may also be changed. Generally, however, the revision is simply a re-statement of existing statute law, either in the same or in substantially the same language. Where this is true, the old statutes are continued without any change in their meaning, but in many instances, the language of existing statutes are substantially altered; words may be added or omitted; phraseology and
punctuation changed. In such instances, however, there is a presumption that the legislature did not intend to change the meaning of the statute, unless the intent to do so is clearly apparent. Where it is the intent of the legislature to make a change in the statutes meaning it must be given effect… a code is simply a part of the statutory law and has no higher standing or sanctity than an ordinary statute. Accordingly, where there is ambiguity in the revised statute, it should be construed as expressing the law as it was prior to the revision, unless the court finds a clear intention to alter the old law”.
Acc to Sutherland, Statutory Construction, Vol. 3, “A statute incorporated into a code is presumed to be incorporated without change even though it is re-worded
and re-phrased and in the organization of the code its original sections are separated. Where, however, the legislative intent is clear that a change in the law is intended, the new provision prevails. In case of ambiguity it is
permissible to resort statute, prior legislative history of the Act, the form and language of the prior statute, prior interpretation and all matters in pari materia in order to arrive at the true meaning of the Code’s provision”.
2.
Consolidating statutes
A consolidating statute is one which collects the statutory provisions relating to a particular topic, and embodies them in a single Act of Parliament, making only minor amendments and improvement.
The purpose consolidating statute is to present the whole body of statutory law on a subject in complete form on particular branch of law. Ordinarily, no change of law is intended in a consolidation Act.
For the object of the Act was merely to “reproduce the law as it stood before”. For ex: The long title of the Code of Criminal Procedure, 1973 is “An Act to consolidate and amend the law relating to Criminal Procedure”.
A consolidating statute is often not a mere compilation of earlier enactments. The very object of consolidation is to collect the statutory law bearing upon a particular subject, and to bring it down to date, in order that it may form a useful Code applicable to the circumstances.
Purely consolidated statute the presumption is
that- Parliament does not intend to alter the existing law applies with particular force. For the object of the Act was merely to ‘reproduce the law as it stood before.’ Words used in the consolidating Act bear the same meaning as that which they
had at the time the enactments consolidated were passed.
Such a statute is not intended to alter the law. Hence, it is relevant to refer to the previous state of the law or to judicial decisions interpreting the repealed Acts for purpose of construction of corresponding provisions in the consolidating Act.
When the consolidation Act gives no guidance as to its proper interpretation only then it is permissible to refer to the repealed enactments for guidance. But when the consolidation Act is not ambiguous or obscure recourse to repealed enactment should not be done.
Prior statutes repealed, but reproduced in substance, are regarded as in pari materia, and judicial decisions on the repealed statute are treated as applicable to substantially identical provisions of the repealing Act’.
The primary rule of construction of a consolidation Act is to examine the language used in the Act itself without any reference to the repealed statutes. It is only when the consolidation Act gives no guidance as to its proper
interpretation that it is permissible to have recourse to repealed enactments. Three types of Consolidation:
a Pure consolidation i.e re-enactment,
b Consolidation with correction and minor improvements, and c Consolidation with Law Commission amendments.
a. Consolidating statutes is the combination of the statutes relating to a given subject- matter. It does not contain the case-law.
b. consolidating statute should be interpreted according to the normal canons of constructions and recourse to repealed enactments can be taken only to solve any ambiguity.
c. The primary rule of construction of a consolidating statute is to examine the language used in the statute itself without any reference to the repealed statutes. 3. Amending statutes
Any change of the scope or effect of an existing statute, whether by addition, omission, or substitution of provisions, which does not wholly terminate its existence, whether by an Act purporting to amend, repeal, revise, or
supplements or by an Act independent and or original in form, is treated as amendatory.
Whole enacting an amending law, that an existing provision shall be deleted and a new provision substituted.
a Clarification
When the legislature amends to clarify things it does not necessarily mean that the original Act did not include and cover those things.
Amendment offers a convenient method of curing a defect in an unconstitutional Act.
Amendments are often made to clear up ambiguities and such amendments which are intended to prevent misinterpretation do not in themselves alter the law in any way.
b Settling conflict of decisions
To end as far as possible the conflict of old decisions. c Repealing obsolete enactment
To repeal enactments which have ceased to be in force or have become obsolete. d Effect of Amendment on Parent Statute
The amendment will be given a reasonable construction: a literal construction which would lead to absurd consequences will be avoided.
When the intention of the legislature is not clear from its language, the court will consider surrounding circumstances such as title, legislative proceeding and report of the committee.
Amendment not to incorporate something inconsistent with or repugnant to object of Act.
A change in the law of procedure operates retrospectively and unlike the law relating to vested right, is not only prospective.
The promulgation of an amending Act cannot without any express term take away from a party any right which might be vested in him under a prior Act.
2. DELEGATED LEGISLATION-I
Judical Interpretation on Subordinated Legislation/ delegated legislation/ secondary rules/ subsidiary rule making authority in India.
Delegated Legislation
Tremendous importance - Bulk of the rules which governs people comes not from the legislature but from the administrators
Legislation of Parliament is not complete, unless read with rules & regulations Delegated legislation - “that which proceeds from any authority other than the
sovereign power & is, therefore, dependent for its continued existence & validity on some superior or supreme authority” (Salmond)
Need for delegated legislation
Exigencies of the modern state - Social & economic reforms Parliament only passes skeletal legislation
Between 1973 to 1977 - 302 laws & approximately 25, 414 orders & rules Pressure upon the Parliament - Even if in continuous session, the Parliament can
not give the quantity & quality laws required
Technicality - Subject matter of legislation may be technical & require consultation with experts
Flexibility & experimentation - Cannot foresee all contingencies - Power is given to executive to meet unforeseen contingencies - Rapid amendment
Emergency - Quick action is required
Confidential matters - If public interest demands the nondisclosure until coming into operation - Ex: imposition of restriction on private ownership
Direct participation in the structuring of law
Though useful & inevitable, cannot be more - Administration may take away the right - Norm of jurisprudence of delegation must be followed
I Forms of Delegated Legislation
Rule: Sec.3 (51) of the General Clause Act, 1891, contains a definition of ‘Rule’ in the following words “rule shall mean a rule made in exercise of a power conferred by any enactment and shall include a regulation made under any enactment’.
‘Circulars’ or instructions which have been issued under the Act will have force of law.
Notification issued for the purpose of brining into operation the enabling Act or to grant exemptions from its provisions or to extend its operation to new persons or objects.
Bye laws are conferred on local authorities and statutory or other undertakers ‘for regulating the conduct of persons within their areas or resorting to their undertaking’. And the bye-laws are generally subordinated to the rules and regulations, if any to be made under the enabling Act.
II
Constitutional Limits of Legislative Delegation
The legislature cannot delegate essential legislative functions which consist in the determination or choosing of the legislative policy and of formally enacting that policy into a binding rule of conduct.
The legislature cannot delegate “uncanalised and uncontrolled power. Only delegation of ancillary or subordinate legislative functions.
It is the duty of the court to strike down without hesitation any arbitrary power conferred on the executive by the legislature.
It is settled that the legislature, except when authorized by the constitution, cannot create a parallel legislature or abdicate its functions in favour of some outside authority.
Legislature cannot delegate its power to repeal a law or even to modify it in essential feature.
The delegated legislation must be consistent with the Parent Act and must not violate legislative policy and guidelines.
Sub-delegation of legislative powers in order to be valid must be expressly authorized by the parent act.
If the parents Act is repealed, notification issued under it would also stand repealed unless saved by the repealing act.
In re, Art. 143, Constitution of India
Is said to be the bible of delegated legislation. Seven Bench Judge heard the case and produced seven separate judgment.
Sec. 2 of Part C States Laws Act, 1950, which confers authority on the Central Government to extend to Part C States laws in force in other states.
The analysis of Sec.2 and decision is as follows:
Power is conferred to extend not only existing but also future laws. This has been upheld.
Parliament has conferred the authority on the Central Government not only to extend laws enacted by it but also laws enacted by State Legislatures which have no legislative jurisdiction in Part C States. This has also been upheld. Power is conferred to extend these laws “with such restrictions or
modifications’ as the Central Government may think fit.
Power to repeal is considered to be a essential legislative functions.
Sec. 2 of the UP Zamindari Abolition and Land Reforms Act, 1951, confers power on the state government to extend the act to other areas in the state to which it was not initially applied.
Held: “It is well settled that the legislature may leave it to the executive to apply the provisions of an Act to different times on various consideration”
Edward Mills v. State of Ajmer AIR 1955 SC 25
S. 27 of the Minimum Wages Act, 1948 - Power of appropriate Government to add to the schedule any employment in respect of which it is of opinion that
minimum wages shall be fixed - Challenged as excessive delegation without the legislative policy
Held: Not invalid - Legislative policy is apparent - “Avoiding exploitation of labour due to unequal bargaining power or other reasons”
Hamdard Dawakhana v. Union of India AIR 1960 SC 554
The Parliament passed the Drugs & Magic Remedies (Objectionable Advertisements) Act, 1954 - To check the mischief being done to the innocent patients suffering from certain incurable diseases through advertisements claiming magic remedies. In other words to control advertisement of certain drugs.
S. 3 - Laid down the list of diseases for which advertisement was prohibited and - Authorized the Central govt. to include any other disease in the list.
Petitioner faced difficulty in the publicity of certain products - 4 December 1958, the Drugs Controller, Delhi, intimated to the petitioners that the provisions of S. 3 of the Act had been contravened by them and called upon them to recall their products sent to Bombay and other States - Correspondence bet. the petitioner & authorities 40 products were stopped from sale -Challenged
Held: The Court held Sec. 3 bad as nowhere had the legislature laid down any policy guidance of the government in the matter of selection of diseases for being included in the list. There it is excessive delegation - Legislature has not laid down any policy for guidance to the govt. in the matter of selection of diseases.
comment: After the Delhi Law Act cases, this is the first case in which a central act was held ultra vires on the ground of excessive delegation.
Hinsa Vrodhak Sangh v. Mizrapur Moti Kuresh Jamat, AIR 2008 SC 1892 Supreme Court held under:
‘The power conferred on the state government to make rules is only for the purpose of carrying out the purposes of the act and not de hors the same. Rules cannot be framed in matters that are not contemplated under the Act’.
The rule-making power is a species of delegated legislation. A delegate therefore can make rules only within the four corners thereof.
III
Norms of jurisprudence of delegated legislation.
Power of delegation is a constituent element of legislative power. Essential legislative functions cannot be delegated - Legislative policy
Non-essential powers may be delegated, however numerous & significant they may be
Essential legislative functions are to be determined on case to case basis Very broad general statements may constitute the legislative policy Delegated legislation must be consistent with the parent Act
Delegate cannot have more power than that of the delegator Sub-delegation must be authorized by the parent Act
Delegated legislation must not be unreasonable & must not violate any procedural safeguards
3. DELEGATED LEGISLATION-II
Judicial Interpretation of Delegated Legislation. :
The courts should make a cautious approach in construing the subordinate legislation and adopt almost the same standard as adhered to in interpreting legislation enactments.
Maxwell opined:
‘Where Parliament has delegated its legislative function to a Minister of the Crown without retaining any specific control over the exercise of that function by the minister the court has the right and duty to decide whether the Minister has acted within the limit of his delegated power’.
1 Enabling act is ultra vires the constitution. Chintamanroa v. State of M.P AIR 1954 SC
CP Regulation of Manufactures of Bidis Act, 1948, provides wide discretionary power to the Deputy Commissioner to fix the agricultural season and prohibit the manufacture of bidis.
The DC imposed a total ban on the manufacture of bidis.
Held: This amount to unreasonable restriction on the exercise of the fundamental right and, hence, both Commissioner’s order and the Act are ultra vires the Constitution.
2 The delegated legislation is ultra vires the constitution
The enabling Act may not be ultra vires the constitution, yet the rules and regulations framed there under may violate any provision of the constitution. Himmat lal k. Shah v. Commissioner of Police, AIR 1973
Sec. 33(1) of the Bombay Police Act, 1951 had authorized the commissioner of Police to make rules for regulation of conduct and behavior of assemblies and processions on or along the streets.
Rule 7 made there under provided that no public meeting will be held without previous permission of the commissioner.
Held: The rule was held ultra vires on the ground that the arbitrary discretion vested in the administrative agency in granting or refusing permission amount to unreasonable restriction on the exercise of freedom of speech and expression.
The power to make subordinate legislation is derived from the enabling Act and it is fundamental that the delegate on whom such a power is conferred has to act within the limits of authority conferred by the Act.
Rule cannot be made to supplant the provisions of the enabling Act but to supplement it.
The delegate is not authorized to make a provision beyond the policy of the Act. The rule of interpretation is that if subordinate legislation is directly repugnant to any well-established principle of statute… it is either ultra vires altogether, or must, if possible, be so interpreted as not to create an anomaly.
If reconciliation were found to be impossible between the section and the rules made there under them, the rule so made must give way.
Rules must be read together with the Act under which they are made, cannot repeal or contradict express provisions in the Acts from which they derive their authority, and if the Act is plain, the rule must be interpreted so as to be reconciled with it.
Statutory rules may do anything within the scope of the Act.
When the Act regulating mining leases assures the lessee the right to carry on mining operations during the entire period of lease and provides for premature termination only after giving a hearing to the lessee, the delegate cannot while making a rule in exercise of the power granted under the Act make a provision for termination of all the leases forthwith without notice or hearing to the leases. (State of T.N. v. P. Krishnamurthy, AIR 2006 SC).
The delegate cannot override the Act either by exceeding the authority or by making provisions inconsistent with the Act.
The delegate has to exercise the power of making subordinate legislation in accordance with procedure prescribed, if any. In considering the effect of non-compliance of a procedural provision of the Act, one has to see whether the non-compliance relates to a mandatory or a directory provision. In the former case the defect will be fatal; whereas in the latter case the defect will be ignored. Kerala Samasthana Chethu Thozhilali Union v. State of Kerala, AIR 2006 SC.
The Kerala Abkari Act seeks to control and regulate various categories of intoxicating liquor including Arrack and Toddy.
In 1996 the state of Kerala banned the sale of Arrack.
Sec. 29 of the Act confers power to make rules for the purpose of this Act. In 2002 the Government made Kerala Abakari Shops Dipsosal Rules, 2002,
Rule 4 of which required that Arrack worker must be employed in all Toddy shops.
But the Act did not contemplate any such matter and the rule was declared invalid.
Held: ‘Rules cannot be framed in matters that are not contemplated under the Act’.
The statutory rules framed under the powers conferred by an Act become integral part of the Act,
Dwarka Nath v. Municipal Corporation AIR 1971 SC.
Prevention of Food Adulteration Act, 1954 empowered the Central Government under …
Sec. 23(1) to make rules for restricting the packing and labeling of any article of food with a view to preventing the public from being deceived or misled as to quantity and quality of the article.
Rule 32 framed thereunder by the government provided that there shall be specified on every label name and business address of the manufacturer, batch number or code number either in Hindi or English.
Action was initiated against “Mohan Ghee Laboratories, Delhi-5” was written.
Held: Requirement of address under Rule 32 is in excess of the power of the parent act which is restricted to “quantity and quality” only. Hence, rule 32 is ultra vires of the Act as it was beyond the power conferred on the government.
Rules enacted under the statute should in nexus with object and scope of the Act
State of Karnataka v. H. Ganesh Kamath, AIR 1983 SC
Sec. 7(7)(a) of Motor Vehicle Act, 1939 provides that a person who passes the test in driving a heavy motor vehicle is to be deemed also to have passed the test in driving any medium motor vehicle.
Rule 5(2) provides that even though a person has passed the test for driving heavy motor vehicle he cannot obtain a licence unless he has already possessed a licence for and has two year experience for driving medium motor vehicle
Supreme Court held:
“Conferment of rule-making power by an Act does not enable the rule-making authority to make rule which travels beyond the scope of the enabling Act or which is inconsistent therewith or repugnant thereto”.
4. DELEGATED LEGISLATION-III
4 Unreasonable, Arbitrary and discriminatory
Unreasonableness is one of the grounds of judicial review of delegated legislation. Reasonableness of a statute or otherwise must be judged having regard to the various factors which, of course, would include the effect thereof on a person carrying on a business.
Unreasonable restriction on fundamental right (14 &19) the court can invalidate an administrative rule.
Article 14 strikes at every arbitrariness in state action.
West Bengal Electricity Board v. Desh Bandhu Gosh, AIR 1985 SC
Regulation 34 of the W.B Electricity Board which provided for termination of services of permanent employees by giving three months notice or on payment of salary for the said period.
Held:
It is totally arbitrary and hence violative of Art. 14 of the constitution.
Meenakshi v. University of Delhi, AIR 1989 SCC
A condition requiring schooling for last two years in any school in Delhi for admission to medical colleges in Delhi was held to be arbitrary and unreasonable.
Air India v. Nagesh Meerza
West Bengal Electrictiy Board v Desh Bandhu Gosh, AIR 1978 SC The limit of the delegated power should be strictly defined by the statute; in other words, the delegated authority shall act strictly within the parameters of the authority delegated to it under the Act
If the interest of any particular section of the community are likely to be affected, it should be consulted by the delegated authority before the regulations are made.
5. That is mala fide
Retrospectivity of Delegated Legislation
The rule-making authority does not possess plenary power to give the subordinate delegated legislation retrospective operation unless and until that power is expressly conferred by the parent enactment.
Taxation by delegated legislation
No tax, fee or any compulsory charge can be imposed by any bye-law, rule or regulation unless the statute under which the subordinate legislation is made specifically authorizes the imposition.
Even when a power to tax is expressly conferred by the enabling Act, it must be exercised within strict limits of the authority conferred by the Act.
Conclusive evidence clause
Trust Mai Lachhmi Sialkoti Bradari v. Amritsar improvement Trust, AIR 1963 SC.
Sec. 3 of the Punjab Development and Damaged Areas Act, 1951, empowers the Improvement Trust to frame Schemes for development of ‘damaged areas’ as defined in the Act.
Sec. 4 makes provision for publication of schemes with a view to invite objections which are to be considered under sec. 5
The scheme, as originally framed or as modified, is published by the state government under sec. 5(4) of the Act declares that ‘the publication under
sub-section (3), shall be conclusive evidence that a scheme has been duly framed and sanctioned.
Supreme Court a scheme, although notified under sec. 5(3), will not be a valid scheme, if it did not relate to a ‘damaged area’ as defined under the Act.
Rules as aid to construction of ambiguous statutes
Where the construction of the Act is ambiguous and doubtful on any point, or where more than one construction is possible recourse may be had to the rules which may have been made by the rule making authority thereunder.
Notification
When a notification is issued in accordance with power conferred by the statute, it has statutory force
If two constructions are possible to adopt, a meaning which would make the provision workable and in consonance with the statutory scheme should be preferred.
Bye-laws
It is not an agreement, but a law binding on all persons to whom it applies Construction of rules or bye-law
Rules are meant only for the purpose of carrying out the provisions of the Act. For ex: R 84 under the Uttar Pradesh Zamindari Abolitionn and Land Reforms Rules 1952 taking away the discretion of the compensation officer under s 69 to deposit or not to deposit the amount of compensation payable to a limited owner cannot be accepted.
When reasons are required to be stated for making delegated legislation e.g., grant of exemption from taxation, reasons must be stated and they can be examined for deciding whether the delegate has acted within limits of the power conferred.
IV Parliamentary control
Every delegate is subject to the authority & control of the principal - Exercise of the power can be directed, corrected or cancelled by the principal
Jain & Jain - “It is the function of the legislature to legislate, but if it seeks to give this power to the executive in some circumstances, it is not only the right of the legislature, but also its duty, as principal, to see how its agent carries out the agency entrusted to it. Since it is legislature which delegates legislative power to the administration, it is primarily for it to supervise & control the actual exercise of this power, and ensure against the danger of its objectionable, abusive & unwarranted use by the administration”
a Direct general control - Proceedings in Parliament
* Debate on the delegating bill - Necessity, extent, type of delegation etc * Asking questions & giving notice for discussion
* Moving resolution on urgent matter, when the reply of the govt. is unsatisfactory
* Vote of grant - Member may propose a cut on the budget demands of a ministry
* Directions by the speaker to refer to a committee to examine the extent of powers sought to be delegated
b Direct special control - Laying on the table of the legislature
Extensively used in England - Statutory Instrument Act, 1946 - Administrative rule-making is subject to the supervision of the Parliament - Immediate effect but subject to annulment by either House
* Laying with no further direction - Simply to inform the Parliament
* Laying subject to negative resolution - Effect soon after laying on the table of the House, but shall cease if annulled
* Laying subject to affirmative resolution - (i) Rules having no effect until approved
(ii) Cease to have effect unless approved by any affirmative resolution
* Laying in draft subject to negative resolution - Draft rules to be placed on the table, which shall come into force after a specified period, unless disapproved * Laying in draft subject to an affirmative resolution - Power of modification India - No statutory provision for laying all delegated legislation - May be provided in the individual statute - Ex: Representation of the Peoples Act 1951, Indian Services Act 1951, Indian Development & Regulation Act 1951, Indian Tariff (Amendment) Act 1950 etc.
Legal consequences of non-compliance with laying provision Void in England
India - Depends on the nature of provisions in the enabling Act
“Administrative Law — Subordinate/Delegated Legislation — Implementation of Court orders/Compliance with judicial precedents:
Promulgation of Rules to nullify/not comply with court orders is not permissible. Though Government has the prerogative to frame service rules in one way or the other, subject to judicial review on settled principles, it is impermissible to exercise rule-making power in such a way as to nullify/not comply with court orders, and the latter also amounts to contempt of court. Hence, costs of Rs. 50, 000 imposed upon Govt. of Bihar for non-compliance with Supreme Court order in Bihar State Govt. Secondary School Teachers Assn. v. Bihar Education Service Assn., (2012) 13 SCC 33, whereby respondents refused to grant all admissible benefits of merger of cadres as directed by Court. [Bihar State Govt. Secondary
School Teachers Assn. v. Ashok Kumar Sinha]
[(2014) 7 SCC 416]”
V
Procedural control
Allowing the specific audit of the rules by those for whose consumption they are made
a Drafting
By an expert draftsman, who is aware of its intra vires nature - The rules in Australia are either drafted or checked by parliamentary draftsmen - India suffers from poorly drafted rules
b Antenatal publicity
No separate law in India - In some cases the parent acts have provided - Ex: Central Tea Board Act, 1949, Charted Accountants Act, 1912 etc.
Section. 23 of the General Clauses Act, 1897: Previous Publication
There is no uniform procedure in India for making subordinate legislation, except in the case of rules or bye-laws made under those Central Acts or Regulations which impose the condition of ‘previous publication’ which brings into play the procedure prescribed in section 23.
Rules to be published in draft in the Gazette Objections & suggestions to be invited Objections & suggestions to be considered
There is no general principle that previous publication of subordinate legislation is necessary; it is necessary only when the statute so requires. Further, the requirements of previous publication does not give any right to the objectors of being orally heard.
Wide-spread use in USA - Administrative Procedure Act, 1946
c Consultation with affected persons
Democratic process - Makes the administrative rule-making acceptable & effective
If the legislator cannot scrutinize the rules, at least the affected must be given an opportunity
No general rule in India - Enabling act may provide - The nature is dependent on the wordings of parent legislation - Mandatory, if some consequences are provided for noncompliance - Ex: S. 16(5) of the Electricity (Supply) Act, 1948 Requirement of consultation
Where enabling acts contain provisions which lay down the requirement of previous consultation with some named agency. Consultation is obligatory only when so provided in the enabling statute and not otherwise.
Official consultation with a named body - Banking Companies Act - Prior consultation with RBI
Consultation with Administrative Boards - The Mines Act, 1901 which provides ‘no regulation or rule shall be made unless the draft thereof has been referred to every Mining Board has had a reasonable opportunity of reporting as to the expediency of making the same and to the suitability of its provisions’. - Prior consultation with the Administrative Boards established under the Act- It has been held that requirement of consultation is mandatory.
Consultation with a statutory board in charge of a particular subject - Tea Board Act, 1953 - Consultation by govt. before framing rules
Consultation with interested persons - Industrial Development & Regulation Act - Representation from industry & public
Preparation of rules by the affected persons - Mines Act, 1901 - Mine owners to draft rules for the safety & prevention of accidents in mines
d Postnatal publicity
Fundamental principle of law is that “ignorance of law is no excuse”(Ignorantia juris non excusat).
Public must have access to the law and they should be given an opportunity to know the law.
Publicity is necessary - Must be accessible to public
Jain & Jain - “It is essential that adequate means are adopted to publicize the rules so that people are not caught on the wrong foot in ignorance of rules applicable to them in a given situation”
England:
Rule of Publication Act, 1893 which required publication of statutory rules and orders.
Statutory Instrument Act, 1946, provides that the rules shall not come into force unless published.
USA:
Before 1935 there existed no machinery for publication of delegated legislation. Federal Registration Act, 1935
The Act establishes a Federal Register and provides for publication of all federal rules, regulations, orders, and other documents of general applicability and legal effect. Unless it is so published it cannot be enforced against any person.
Sec. 4 (c) defers effectively of the rules by 30 days from the date of publication so that everyone gets an opportunity of knowing them, unless the agency decides otherwise in public interest.
After publication of rules in the Federal Register, the rules are classified, indexed and codified under the provisions of sec. 311(a) of the Federal Register Act.
India
No general law in India unlike England and America- Differs from statute to statute - Official Gazette / Free choice of the authority - Stipulated mode must be followed.
Section 23, General Clauses Act, 1897 provides conclusive evidence clause that publication in the Official Gazette of the rules or bye law has been duly made. State of Maharashtra v. M. H. George AIR 1965 SC 722
Guidelines regarding the mode of publication;
i Mandatory statutory requirement regarding the mode must be followed ii Where there is no statutory requirement - Published in the usual form
iiiIn India, publication in the Official Gazette is the ordinary method of bring a rule to the notice of persons concerned.
State of Orissa v. Sridhar Kumar AIR 1985 SC 1411
The Orissa Municipal Act, 1950 - State govt. to publish the notification in the Official Gazette & local newspaper to hear objections - Published in English in a local news paper - Held not sufficient
Publication as a corollary of natural justice Harla v. State of Rajasthan AIR 1951 SC 467
1922 - Maharaja of Jaipur died - Successor was minor - Council of Ministers was appointed by the Crown representative - Passed Jaipur Opium Act, 1923 by a resolution - Never published
Appellant was prosecuted for possessing excess opium - Challenged the validity.
Court observed “Unlike Parliamentary legislation which is publicly made, delegated legislation or subordinate legislation is often made unobtrusively in the chambers of a minister, a secretary to the governor or other official dignitary. It is, therefore, necessary that subordinate legislations, in order to take effect, must be published in some suitable manner, whether such publication is prescribed by the parent statute or not”.
Held: The rules of natural justice demand the publication before enforcement. It must be broadcast in some recognizable way so that all men may know what it is, or, at the very least there must be some special rule or regulation or customary channel by or through which such knowledge can be acquired with the exercise of due and reasonable diligence.
B.K Srinivasan v. State of Karnataka, AIR 1987 SC
Where the statute itself required the publication of the delegated legislation and where the finding was that there was publication as required by the statute, the Supreme Court made some general observation which support the view that publication in some suitable form, even if not specifically required by the statute, is essential for making the delegated legislation effective. The Principles enunciated In Harla’s case and Shrinivasan’s case which is still the law, requires some form of publication before delegated legislation can be effective. But that principle also does not require communication of any general rule, regulation etc. to each and every individual affected thereby,, and it would be sufficient if the same is published in such manner that person can, if they are interested, acquaint themselves of its contents. If a question arises as to when was a particular order or rule was made or notification issued, the material date is the date of Gazette publication as required by the statute and not the date of publication in a newspaper or the media.
Defect in publication
Govindlal v. Agricultural Produce Market Committee, AIR 1962 SC.
The draft notification was required under the Parent Act to be published in official Gazette as well as in Gujrati in a newspaper having circulation in the area concerned.
The notification was issued in the Official Gazette but it was not published in Gujrati.
Held: Requirement of publication in Gujarati was mandatory and notification was invalid.
VI
Sub-Delegation
When a statute confers legislative powers on an administrative authority and that authority further delegate those powers to another subordinate authority or agency, it is called sub-delegation.
Delegate on whom power to make subordinate legislation is conferred cannot further delegate that power.
Judicial or quasi-judicial power conferred by a statute cannot be delegated except when specifically permitted.
A discretion conferred by statute is prima facie intended to be exercised by the authority on which the statute has conferred it and by no other authority.
Ganapati Singhji v. State of Ajmer, AIR 1955 SC.
The enabling Act conferred power on the Chief Commissioner to make rules for the establishment of proper system of conservancy and sanitation at fairs. The Chief Commissioner made rules empowering the District Magistrate to devise his own system and see that it was observed.
Held: Rules to be ultra vires as the enabling Act conferred power on the Chief Commissioner and not on the District Magistrate. Therefore, sub-delegation was declared invalid.
The Parent Act permits sub-delegation to authorities or officers not below a particular rank. In such a circumstance the power can be delegated only to those officers or authorities.
A.K Roy v. State of Punjab, AIR 1966 SC.
Sec. 20(i) of the Prevention of Food Adulteration Act, 1954, the power to initiate prosecution for offences was given to the state government.
Acting under Rule 3 of the Prevention of Food Adulteration (Punjab) Rules, 1958, the state government delegated the aforesaid power to Food Inspector, who prosecuted the accused for commission of offences under the Act.
Held: The terms of Sec. 20(1) of the Act do not postulate delegate by the person so authorized and therefore, the complaint which was filed by the Food Inspector cannot be maintained.
6. DICTIONARY 4. Dictionaries
When a word is not defined in the act itself, it is permissible to refer to dictionaries to find out the general sense in which that word is understood in dictionary.
It is elementary that the meaning of a staute must, in the first instance, be sought in the language in which the act is framed, and if that is plain, and if the law is within the constitutional authority of the lawmaking body which passed it, the sole function of the courts is to enforce it according to its terms….where the language is plain and admits of no more than one meaning, the duty of interpretation does not arise, and the rules which are to aid doubtful meanings need no discussion. (Camminetti v. United States, 242 U.S)
In selecting one out of the various meanings of a word, regard must always be had to the context of the Act. When context makes the meaning of the word clear, other dictionary meaning become irrelevant.
The view of Krishna Aiyar, J: “Dictionaries are not dictators of statutory construction where the benignant mood of a law, more emphatically, the definition clause furnishes a different denotation.”
If diverse meanings of words are given in a dictionary, then court should always keep in mind the context in which a word has been used in choosing the correct meaning of the word.
In the words of Jeevan Reddy, J: ‘A statute cannot always be construed with the dictionary in one hand and the statute in the other. Regard must also be had to the scheme, context and to the legislative history’.
If the Act does not define a word, the legislature must be taken to have used that word in its ordinary dictionary meaning.
When the context makes the meaning of word quite clear, it becomes unnecessary to search for and select a particular meaning out of the diverse meaning a word is capable of.
A statute is not to be interpreted merely from a ‘lexicographer’s angle’; in built policy of the legislature as discernible from the object and scheme of the Act must be given effect to.
Kanwar Singh v. Delhi Administration, AIR 1965 SC.
While construing Section 418(i) of the Delhi Municipal Corporation Act, 1959 observed:
It is the duty of the court in construing a statute to give effect to the intention of the legislature. If, therefore, giving a literal meaning to a word used by the draftsman, particularly in a penal statute, would defeat the object of the legislature, which is to suppress a mischief, the court can depart from the dictionary meaning or even the popular meaning of the word and instead give it a meaning which will advance the remedy and suppress the mischief.
Employees State Insurance Corporation v. Tata Electric and Locomotive Company, AIR 1976 SC
Whether apprentice is employee under Employees State Insurance Act, 1948 - apprentice means person who is undergoing apprenticeship training in designated trade in pursuance of contract of apprenticeship - held, apprentice is not an employee.
The question was whether the respondents were bound to contribute monetarily under the Employees State Insurance Act, 1948 in respect of apprentices of the company.
The dictionary meaning of the word apprentice shows that impart some kind of training by the company to the apprenticeship under mutually agreed terms and conditions.
Held: Even if the apprentice is paid some money by the company, this does not make him an employee of the company.
State of Uttar Pradesh v. Kores (India)Ltd. AIR 1977 SC .
The appellant issued a notification under section 3-A of U.P Sales Tax Act, 1948 under which sale of paper was also to be taxed.
The question was whether carbon paper was paper for the purpose of the notification.
Held: ‘Paper’ not being defined in the enactment has to be understood in its popular and commercial sense. Ordinarily paper is used for writing, printing or packaging purposes and carbon paper is not used for any such purpose. It is a special kind of paper manufactured through a special process and is used making copies of document. Therefore, carbon paper was not intended to be covered under the notification
.
Thalappalam Ser. Coop. Bank Ltd. V. State of Kerala 2013 (12) Scale 527
The Court had to consider the scope of the expression ‘substantially financed’, occurring repeatedly in the Right to Information Act, 2005. The Court placed reliance on the definitions given in the Oxford English Dictionary and Black’s Law Dictionary, to hold that the aforementioned expression would mean that funding ought to be so substantial to the body that it ran by such funding and it would struggle to exist if the funding was withdrawn.
5. Text Books and Encyclopedias
Text books may be referred to by the courts to arrive at the true meaning of an enactment.
For ex: Manu, Jajnavalkya, Vijnaneswar,
For example in Kesavanad Bharati v. State of Keral where a large number of text books were quoted in arriving at the decision.
Ram Lal v. State of Rajasthan, (2002) I SCC
Whether camel milk was also included under the Prevention of Food Adulteration Rules 1955.
The Supreme Court referred to Encyclopedia Americana (vol.5, p 263) where it is mentioned that the milk of camel is nutritious.
World Book Encyclopedia it is said that ‘millions of people who live in Africa and Asia depend on camels to supply most their needs….for people who live deep in the deserts, camel are almost the only source of transportation, food, clothing, the shelter….they drink camel’s milk and also make cheese from it. The milk is so rich and thick that it forms hard lumps in tea or coffee’
7. DOCTRINE OF NOSCITUR A SOCIIS (A Word is known by the company it keeps)
The meaning of a word is to be judged by the company it keeps.
Maxwell explained it as “Associated words take their meaning from one another under the doctrine of Noscitur a Sociis, philosophy of which is that the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it”.
For example, in context of the words ‘horse, cow or other animal’, the word ‘animal’ would refer only to brutes.
As stated by the Privy Council: “It is a legitimate rule of construction to construe words in an Act of Parliament with reference to words found in immediate connection with them”.
According to Maxwell, means that when two or more words which are susceptible of analogous meaning are coupled together, they are understood to be used in their cognate sense. They take their colour from each other, that is, the more general is restricted to a sense analogous to a less general.
Associated words take their meaning from one another under the doctrine of noscitur a sociis, the philosophy of which is that the meaning of the doubtful word may be ascertained by reference to the meaning of words associated with it.
State of Assam v Ranga Mohammad, AIR 1967 SC
The respondent filed a petition for the issue of a quo warranto questioning the right of the appellant to transfer and post a District Judge.
Art. 233(10) provides “ Appointment of persons to be, and the posting and promotion of, District Judges in any state shall be made by the Governor of the state in consultation with the High Court exercising jurisdiction in relation to such state.
In construing the word ‘posting’ as it occurs in Art. 233(1) of the constitution in association with words ‘appointment’ and ‘promotion’ the Supreme Court held that the word ‘Posting’ took its colour from the associated words and meant “the assignment of an appointee or promote to a position in the cadre” and not his transfer from one station to another.
In Rainbow Steels Ltd v. Commissioner of Sales Tax, Uttar Pradesh, AIR 1981 SC
The State Government as per a notification taxed “old, discarded, unserviceable or obsolete machinery, stores or vehicles etc. at the rate of five percent.
The appellant agrued and the court agreed that invoking the principle of Noscitur a Sociis the expression ‘old’ which is more general should be restricted to a sense analogous to that of the less general expressions, namely “discarded, unserviceable or obsolete” and read in this manner the sale of the power plant could not be regarded as sale of “old” machinery falling within the Entry.
Pradeep Agarbatti, Ludhiana v. State of Punjab and Ors, (1997)8 SCC 511 The Court held that upon application of the doctrine it can be inferred that when words are grouped together, each word in the entry draws colour from the other words therein.
As a result the court concluded that Entry 16 of the Punjab General Sales Tax Act, 1948 could not be read to tax agarbatti, dhoop as taxable items were to be read in context of ‘perfumery’ i.e. something which can be used on the human body.
In Godfrey Philips v. State of Uttar Pradesh, AIR 2005 SCC
Supreme Court was required to consider the legislative competence of the statutes which empowered the state legislations to tax ‘luxuries’.
Entry 62 of the State list allowed taxes to be imposed on ‘luxuries including taxes on entertainments, amusements, betting and gambling’.
The impugned legislations had imposed taxes on tobacco, tobacco products and intoxicants.
Held: The word accompanying ‘luxuries’ in the Entry were all activities and not goods
In Commissioners v. Savoy Hotel (1966) All Er
While interpreting a purchase Tax Act, Which used the expression ‘manufactured beverages including fruit-juices and bottled waters and syrups, etc’, it was held that the description ‘fruit-juices’ as occurring therein should be construed in the context of the preceding words and that orange juice unsweetened and freshly pressed was not within the description.
Difference between Ejusdem Generis and Noscitur A Sociis
Noscitur a sociis applies to cases where analogous words are put together but Ejusdem applies when the specific words follow the general words.
Associated words take their meaning from one another under the doctrine of Noscitur a Sociis, the philosophy of which is that the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it, such doctrine is broader than the maxim Ejusdem Generis.
8. EJUSDEM GENERIS I.
Meaning and definition
Acc. to Halsbury’s Laws of England ‘ As a rule, where in a statute there are general words following particular and specific words, the general words must be confined to things of the same kind as those specified, although this, as a rule of construction, must be applied with caution, the subject to the primary rule that statutes are to be construed in accordance with intention of parliament”.
The rule of ejusdem generis rule is not a rule of law but is merely a rule of construction to aid the courts to find out the true intention of the legislature. If a given provision is plain and unambiguous and the legislative intent is clear, there is no occasion to call in aid that rule.
For instance, where an exclusion clause in an insurance contract stated that liability will be excluded by damage caused by acts of God, flood, fire or otherwise, the term otherwise relates only to damage of the same class as the preceding words.
Thus, the clause would not exclude liability for damage caused by riots, but may do for damage caused by gas leaks.
II. English context
The rule of Ejusdem Generis was laid down by Lord Tenderden (Know as Lord Tenderden’s rule in England) in the case of Sandiman v. Beach
“Where general words follow particular ones, the rule is to construe them as applicable to persons Ejusdem Generis”.
III. Indian context
Where general words follow specific words, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words.
Amar Chandra v. Collector of Excise, Tripura, AIR 1972 SC. The court laid down rule of ejusdem generis applies when: a. The statute contains an enumeration of specific words; b. The subjects of enumeration constitute a class or categories; c. That class or category is not exhausted by the enumeration; d. The general terms follow the enumeration; and
e. There is no indication of a different legislative intent. Case law development
State of Bombay v. Ali Gulshan AIR 1955 SC.
The question was whether the appellant was entitled under section 6(4) (a) of the Bombay Land Acquisition Act, 1948, to requisition, for a public purpose, premises for housing a member of a foreign consulate. The sub-section provided that:
“The State Government may requisition for the purpose of state or any other purpose….” Was involved.
The High Court was of the view that “any other” should be read ejusdem generis with the purpose of the state that the accommodation for a member of the foreign consulate staff is “a purpose of the Union” and thus the state government was not entitled to requisition.
In construing the words for the purpose of a state or any other public purpose in section 6(4)(a) of the Bombay land requisition act 1948 the SC declined to apply the rule of ejesdem generis for the construction of the word or any other public purpose and pointed out by referring to the legislative entries in the list
that state purpose and any other purpose were in themselves two distinct categories.
Evans v. Cross,
The interpretation of the words ‘other devices’ in section 48(9) of the Road Traffic Act, 1930, which happened to define a ‘traffic sign’ to include “all signals, warning posts, signs or other devices”.
Applying the rule of ejusdem generis the court held that a painted white line on a road could not be called traffic sign.
Ujjam Bai v. State of U.P, AIR 1962 SC
“Again Article 12 winds up the list of authorities falling within the definition by referring to ‘other authorities’ within the territory of India which cannot obviously be read as ejusdem generis with either the government or the legislatures or local authorities. The word are of wide amplitude and capable of comprehending every authority created under a statute and functioning within the territory of India or under the control of the Government of India”.
M/S Siddeshwari Cotton Mills Pvt. Ltd. V. Union of India, AIR 1989 SC.
The Supreme Court observed that the expressions ‘bleaching, mercerizing, dyeing, printing, water proofing, rubberizing, shrink-proofing, organdie processing, which precede the expression’ or any other processes’ in section 2(f) (v) of the Centre Excises and Salt Act, 1944 all envisage processes which import a change of lasting character to the fabric.
The term ‘any other process’ must share one of these incidents, thus the principle of ejusdem generis was used for interpreting the context of the general words in context of the enumerated words which followed.
The rule of interpretation generally known as ejusdem generis rule reflects an attempt to reconcile incompatibility between the specific and general words, in view of the rules of interpretation, that all words in a statute are given effect if possible, statute should be construed as a whole and no words in a statute are presumed to be superfluous.
In construing the definition of ‘workmen’ in the Industrial Courts Act, 1919, which reads: ‘means any person who entered into or works under a contract with an employer whether the contract be by way of manual labour, clerical work or otherwise’
Viscount Simon, L.C. said: ‘the use of words or otherwise does not bring into play the ejusdem generis principle for manual labour and clerical work’ do not belong to a single limited genus.( N.A. L.G. O V.Bolton Corporation, 1943 AC)
Ejusdem Generis: when not to invoke
The doctrine ejusdem generis must be applied with care and caution. It said that the rule of ejusdem generis should not be invoked when:
a. Where the intention of the legislature is clear;
b. Where it would result in disregarding the plain language of the statute; c. Where mention of a single species does not constitute a genus.
d. Where a perusal of the statute as a whole indicates that the legislature intended the general words to go beyond the class specially designated;
e. Where the specific things enumerated have no common characteristic and differ greatly from one another;
f. If the preceding words do not constitute mere specifications of a genus but constitute description of a complete genus, the rule has no application.
g. Where the particular and specific words exhaust the whole genus. IV.
Words of Rank
According to this rule, when words descriptive of persons are used in an order descending by rank, general words at the end of the list do not include persons or things of a higher rank then the highest named, if there be any lower species to which they can apply.
Ex: Phrase “an officer or examiner of the court or some other person”, the residuary words have been not to include Judges.
Casher v. Holmes, (1831)
General words “all other metals” following the particular words “copper, brass, pewter, and tin” did not include silver or gold, those latter metals being of a superior kind to the particular metals enumerated.
9. INTERPRETATION OF FISCAL/ TAXING STATUTES
Tax is a compulsory contribution to the support of the Government which is levied on persons, property, income, commodities, transactions, etc.
Constitutional madate
Article 265 of the constitution provides: “No tax shall be levied or collected except by authority of law”.
Article 366(28) of the constitution which defines Taxation and Tax reads: Taxation includes the imposition of any tax or impost, whether general or local or special and tax shall be construed accordingly”.
Any compulsory exaction of money by Government amount to imposition of tax which is not permissible except by or under the authority of a statutory provision.
A tax is imposed for public purpose for raising general revenue of the state. A fee in contrasts is imposed for rendering services.
A power to tax cannot be inferred from a general entry for taxes are specifically named and distributed between the Union and States by various entries in the constitution.
The increase in rate of duty or levying different duty or levy of impost at different rates must equally be made under the authority of law in the manner prescribed by legislative enactment.
A fiscal provision must not only be literally construed but also strictly construed.
The executive cannot levy tax. It, for the said purpose, therefore, cannot even take recourse to the process of interpretation of statute
General Principles of strict construction I.
Lord Cairns states that “If the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be.
The subject is not to be taxed unless the words of the taxing statute unambiguously impose the tax on him.
Imposition of taxes is like imposition of penalty so there is no room for any kind of intendment or presumption and the clearly stated words are to be interpreted by looking into three aspects; subject of tax, person to be taxed and rate of tax.”
The Supreme Court- Bhagwati, J. stated the principle as follows: “In construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of law. If the revenue satisfies the court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter”.
In interpreting a taxing statute, equitable consideration are entirely out of place. Nor can taxing statute be interpreted on any presumptions or assumptions. Before taxing any person it must be shown that he falls within the ambit of the
charging section by clear words used in the section.
If the words used are ambiguous and reasonably open to two interpretations benefit of interpretation is given to the subject.
It is well settled that in the field of taxation, hardship or equity has no role to play in determining eligibility to tax and it is for the legislature to determine the same.
In a taxing provision if there are two possible constructions of the words of the statute then effect is to be given to the one that favours the citizen and not the one that imposes a burden on him.
Taxation only by express words: The rule is that the intention to impose a taxing statute must be shown by clear and unambiguous language
II. Literal construction of words used: it is well settled that words in a taxing statute should be construed in the same way in which they are understood in ordinary parlance in the area in which the law is in force. The question whether wider or narrower meaning should be given, if words are capable of both, depends upon the context and background.
It is no doubt true that in construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the state or the substance of the law.
In Associated Cements Co Ltd v. State of MP, AIR 2004 SC
Question was whether the production of ‘refractory cement’ was liable to imposition of export tax.
The main issue was whether refractory cement fell within the Entry “all types of cement’ was liable to export tax.
Expatiating on the question, the court pointed out that cement was exclusively used as a building material and as a commodity of everyday use, whereas the main property of ‘refractory cement’ was that it could withstand very high temperatures, corrosion and abrasion. Anyone buying cement for building
would under no circumstances buy refractory cement. As the word ‘cement’ had not been defined, it had to be understood as used in common parlance. Hence, refractory cement was held to not be liable to the imposition of export tax. III.No extension by implication: The rule of construction of a charging section is that before taxing any person, it must be shown that he falls within the ambit of the charging section by clear words used in the section. No one can be taxed by implication. The charging section has to be construed strictly.
IV. No extension by analogy: It is out of place when the statute itself prescribe a particular mode of taxation for deciding whether or not it is logical.
V.
No equitable construction: In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions.
Considerations of equity, reason or justice have no place in a taxing statute, which must be construed only on the language used therein.
While equitable considerations are of no avail in the construction of taxing statutes, a proper balance must be struck between the essential needs for revenue of a modern welfare state on the one hand and the desirability that the citizen must know his liability clearly before he can be called upon to contribute to the revenue on the other.
“In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no necessity about a tax. There is no presumption as to a tax. Nothing has to be read in, nothing is to be implied. One can only look fairly at the language used”
VI. No extension by fiction: The scope of a fiscal provision cannot be enlarged by creating a fiction.
Taxing legislation subject to fundamental rights and other constitutional provision: Ex: Art. 14, 19(1)(g).
Baidyanath Ayurved Bhawan v. Escise Commr., U.P AIR 1971.
The appellant was a manufacture of certain medicines, made from substances like tincuture, spirit, etc. Tincture and spirit in their turn contain alcohol. The appellant was called upon to pay duty under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, on the ground that the medicinal preparations contained alcohol. It was contended that the medicines were not prepared by the addition of pure alcohol.
“In order to attract duty all that is required is that a medicinal preparation should contain alcohol. Alcohol may be a part of the preparation either because it is directly added to the solution or it came to be included in the medicinal preparation because one of the components of that preparation contained alcohol. According to the plain language of the provision all that is required is that that preparation should contain alcohol”.
In interpreting a taxing provision, the courts should not ordinarily concern themselves with the policy behind the provision or even with its impact.”
Case laws
The supreme court held that in cases where the literal interpretation of a fiscal legislation leads to an absurd meaning, the court have power to derive the
intention of the legislation to reach a relatively accurate result.(J.K Steel Ltd v. Union of India, AIR 1970 SC
The Supreme Court held that with respect to liability to pay interest on delayed payment of tax has to be mentioned in the statute that means there should be a substantive provision in the statute to that effect. (Indian Carbon Ltd v. State of Assam, AIR 1997 SC)
Exception provisions
Benefit of exemption is to be considered strictly.
If the tax-payer is within the plain terms of the exemption it cannot be denied its benefit by calling in aid any supposed intention of the exempting authority. Exemption notification cannot be unduly stretched to produce unintended
results in derogation of the plain language employed therein.
Taxation laws are not in the nature of penal laws; they are substantially remedial in their character and are intended to prevent fraud, suppress public wrong and promote the public good.
Provision of exemption from tax in a fiscal statute is to be strictly construed. Evasion of Statutes
It is not permissible to evade an act of parliament by resorting to a fraudulent device.
10. THE GENERAL CLAUSE ACT, 1897 Object:
To avoid superfluity and a repetition of language and to place in a single Act. To shorten the language of Central Act.
To provide as far as possible for uniformity of expression in Central Acts, by giving definitions of a series of terms in common use.
To state explicitly certain convenient rules for the construction and interpretation of certain Acts.
Definition and the rule of interpretation contained in the General Clause Act have to be read in every other statute governed by it.
Value and utility of the general clauses act is considerable, because it not only constitutes the reference book of the judge when dealing with statutes, but serves as the draftsman’s labour saving device.
Every state has its own General Clause Act, Which applies to state Acts. Raj Kumar Yadav v. Samir Kumar Maheseth, AIR 2008 SC
Constitution of India - Article 225—Representation of People Act, 1951— Section 81—Patna High Court Rules—Rules 6 and 7—Election petition— Period of limitation—45 days from date of election—Last date of limitation being 28.8.2003—Word “day” in Section 81 begins at mid night and covers period of 24 hours thereafter—Thus, petition could have been presented upto mid night falling between 27th and 28th day of August, 2003—High Court Rules framed under Article 225—Relate to procedural matters—And cannot make nor curtail any substantive law—At time of presentation, Judge may not be sitting in open court—But that does not mean that he cannot receive election petition—Judge ordinarily to sit in open court upto 4.15 p.m. of day as per rules —But that time is not end of day—Election petition handed over to Election