5th Test Cases:Purposive Construction (Debo) R & B Falcon v. CIT (2008 SC)- Co.

incorporated in Australia employees came to wor in mobile o!!shore ri"s in #ndia co. paid !or travel whether conveyance money ta$able as !rin"e bene!its under s. %%5 (wb) whether it can be ta$ed under subsection & as conveyance e$pense' ($ception under subsection ) was only !or subsection % and not & it !ell under subsection % and not & Purposive construction must be "iven and interpretation must be "iven in a way that subsection ) should not be rendered otiose.

Penal *tatute (Ani) Murlidhar Meghraj Loya v. S a e o! Mahara"h ra (#$%& SC)- crushin" re+uired !or producin" oil Prevention o! ,ood Adulteration Act - !ood inspector went to inspect whether !ood was bein" adulterated manu!acturers pleaded "uilty !ine o! .s. &5/ levied but statute "ave minimum o! imprisonment and !ine o! .s. %/// 0eld1 narrow construction which is usually applied to penal statutes but this cannot be applied to let the "uilty escape and interpretation must be to chec mischie! (mischie! rule)

(Abhay) 'anga (ire )urcha"e )* L d v. S a e o! )unja+(2000 SC)- vehicle used to carry dru"s s. 2/()) o! 3DP* Act ma es vehicle liable to be con!iscated e$cept i! w4o nowled"e de!ence claimed that not owner so not liable and s. 2/()) uses 5owner6 0eld1 s. 2/()) would be redundant i! owner is "iven limited meanin" and de!inition o! owner to be ta en !rom 78 Act which says in whose name it is re"istered1 thus1 the provision applies to him.

(Ani) ,aco+ Ma he- v. S a e o! )unja+ (200. SC)- 9$y"en re+uired !or patient cylinder was empty and doctor came late patient declared dead whether !alls under )/:A o! #PC' .e!erred to /oc or Sure"h 'u0 a ca"e where doctor put wron" tube inside and it was held that doctor was ne"li"ent under tort law and not criminal law as #PC re+uires "ross ne"li"ence *C held that doctors are a separate class and duty o! care is di!!erent 3arrow interpretation should be used. Also held that in civil law res ipsa lo+uitor can be used but in criminal law burden is hi"her thus can6t be used. Protectionist approach was applied by Court. #t !ollowed ;olam test.

(Avi) S andard Char ered Ban1 v. /irec ora e o! 2n!orce3en (200. SC)- 3otices issued un!er s. 52 o! ,(.A to pvt ban minimum punishment is imprisonment and !ine there!ore

no discretion and co. can6t be imprisoned so can6t prosecute only company 0eld1 must loo at le"islative intent which is to punish the culprits and construction must be "iven to ma e statute applicable di!! between penal and other statues has blurred and suppression o! mischie! is important law cannot compel somethin" impossible was claimed but held not applicable here as there is some discretion with the Court thus1 company to be "iven only !ine concurrin" opinion - rule that interpretation o! penal statute in !avour o! accused should be in li"ht o! le"islative intent and intent here is to prosecute and punish 7inority<. Dharmadi ari- Court must not !ill lacuna but restrict itsel! to interpretation. Parliament will ma e chan"es to law and it is not the =ob o! the court.

Ta$ *tatute (Anish) IRC v. /u1e o! 4e" 3in" er (#$5.(L)- Du e promised reward to servants !or > years which !ell out o! ta$ i! he "ave salary it would be ta$ed 0eld1 ordinary le"al principles must be loo ed into and not substantive !acts o! the transaction. #! transaction !alls within the le"al principle1 only then would it be ta$ed. (very person is allowed to le"ally avoid ta$.

Ra3"ay Rule (Ra3"ay *6 IRC)- Ta$ payer will be ta$ed on e!!ect o! transaction and not on mode o! transaction.

(;a"di) CIT v. B Srini*a"a Se y (#$8# SC)- whether "oodwill is sub=ect to capital "ains ta$ under s. :5 o! #T Act' sale o! "oodwill o! partnership !irm s. :5 is char"in" provision only i! computation o! ta$ is possible will it be ta$ed 9n e$amination1 cost o! ac+uisition o! "oodwill is not possible to be computed1 so not to be ta$ed 0eld1 not only char"in" provision is relevant but other provisions such as computation provisions are also relevant.

(7ardia) 7a ional Mineral /e*elo03en Cor0ora ion v. S a e o! M)(2008 SC)- 7ines Act- s. ?- royalty to be paid appellants had to pay royalty !or slime s. ? is char"in" provision to be read with &nd schedule which is a computation provision 0eld1 computation provisions are important but in time o! con!lict computation provision should "ive way to char"in" provision otherwise it should be read in a way to support to char"in" provision 3o ta$ as slime not covered in computation provision.

(Abhay) Mc/o-ell & Co6 L d6 v. CT9(#$8& SC)- @hether e$cise duty to be paid by li+uor manu!acturers' ($cise duty de!ined in e$cise act and leviable on manu!acturer and duty has to be paid be!ore the li+uor is removed !rom distillery. Distillery passes obtained a!ter

payment o! duty which is proo! o! payment. ;oo s o! a4c did not show any payment. ,unction o! the Court is to strictly and correctly apply the le"islation enacted by parliament and tas o! court is to ascertain le"al nature o! transaction to which it is sou"ht to attach a ta$ (a4" IRC v. /u1e o! 4e 3in" er) (*unny) :oI v. ;<adi Bachao ;ndolan(2005 SC)- DTAA b4w #ndia and 7auritius- circular states capital "ains to be ta$ed only in 7auritius. Clari!ied in another circular which was constitutionally challen"ed as bein" a4" #T Act. @hether authority u4s %%? o! #T Act to pass circular' Mc/o-ell ca"e said that Court may li!t corporate veil *C held that ta$in" statute to be interpreted narrowly. Person has ri"ht to avoid ta$ so i! transaction not !allin" under ta$in" statute1 no ta$. .elied on /u1e o! 4e" 3in" er ca"e6 Ta$in" statutes should be interpreted di!!erently.

;ene!icial Ae"islations (Debo) 7oor Sa+ha =ha oon v. Moha33ed >a"i3- appellant-wi!e driven out o! home bene!icial le"islation so wide interpretation should be "iven and s. %&5 o! CrPC and s. ) o! 7uslim law should be read harmoniously as they apply to di!!erent !ields. ;oth should be made applicable.

(Pranav) 7a ional In"urance Cor0ora ion v. S-aran Singh ##6 7a ional In"urance Co30any *6 S-aran Singh (2008) SC Case Concernin" ;ene!icial Ae"islation - *.%:?(&)(a)(ii) o! 7otor 8ehicles Act - insurer has to pay insurance amount a!ter accident to third party but not re+uired to pay i! driver does not possess valid drivin" license. 3o compensation payable as 3o valid license. Court said bene!icial le"islation as "ives compensation to third parties. #nterpreted once possessin" license and !ailure to renew does not mean that he did not have duly license 7oreover1 insurer can recover !rom the driver later on account o! !ailure to possess valid drivin" license.