Taxing Statute – Interpretation of a Word

The principle of statutory interpretation with regard to a word in taxing statutes are well established. In Porritts & Spencer (Asia) Ltd. v. State of Haryana, (1979) 1 SCC 82, it was laid down as under:
“Where a word has a scientific or technical meaning and also an ordinary meaning according to common parlance, it is in the latter sense that in a taxing statute the word must be held to have been used, unless contrary intention is clearly expressed by the Legislature.”
In Union of India v. Delhi Cloth & General Mills Co. Ltd., AIR 1963 SC 791, the question arose as to how the term “refined oil” occurring in tariff was to be construed. There was no competition between the tariff entry with any other, nor was there any need to reconcile and harmonise the said entry with any other provision of the tariff. The Court, therefore, considered the term “refined oil” by applying the commercial meaning or trade nomenclature test and held that only deodorized oil can be considered to be refined oil. The court also referred to the specification of “refined oil” by the Indian Standards Institution and held that:
“This specification by the Indian Standards Institution furnishes very strong and indeed almost incontrovertible support for Dr. Nanji’s view and the respondents’ contention that without deodorization the oil is not “refined oil” as is known to the consumers and the commercial community.”
In Grenfell v. IRC, (1876) LR 1 EX D 242 (DC) it was observed:
“that if a statute contains language which is capable of being construed in a popular sense such statute is not to be construed according to the strict or technical meaning of the language contained in it, but is to be construed in its popular sense, meaning of course, by the words “popular sense”, that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it. But if a word in its popular sense and read in an ordinary way is capable of two constructions, it is wise to adopt such a construction as is based on the assumption that Parliament merely intended to give so much power as was necessary for carrying out the objects of the Act and not to give any unnecessary powers. In other words, the construction of the words is to be adopted to the fitness of the matter of the Statute.”
In Holt & Company v. Collyer, it was held thus:
“If it is a word which is of a technical or scientific character then it must be construed according to that which is its primary meaning, namely, its technical or scientific meaning.”
The Court in K.V. Varkey v. STO, AIR 1956 TC 105 specifically declined to apply the popular or commercial meaning of “Tea” occurring in the sales tax statute holding that the context of the statute required that the technical meaning of “a product of plant life” required to be applied and therefore green tea leaves were tea even though they might not be tea as is known in the market. Parle Agro Private Ltd. v. Commissioner of Commercial Taxes, (2017) 7 SCC 540.

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