TIOL-DDT 510 · the untouched capture
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<html> <head> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <title>Taxindiaonline's DDT 402</title> </head> <body > <p><b><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 510</font></b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><br> 12.12.2006<br> Tuesday</b></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Drawback on HSD to EOUs – DGFT expands scope</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per PN. No. 65/2006 dated 20.10.2006, the All Industry Rate of Drawback of Rs. 1050/- per MT is allowed for both HSD and Furnace Oil, supplied by Domestic Oil Companies <b>toEOU Units</b> under various Schemes as contained in Chapters 4, 6 and 8 of the Foreign Trade Policy.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the PN is amended to delete the words “to EOU Units” and retrospectively with effect from 20.10.2006.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So now supplies to units other than EOus covered under the other export promotion schemes will also get the drawback.</font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2006/dgft06pn074.htm">PUBLIC NOTICE NO. 74,(RE-2006)/2004-2009,Dated: December 6, 2006</a></u></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">UP Stock Exchange Investors Protection Fund – notified for exemption</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Section 10(23EA) of the Income Tax Act, <i>any income of such Investor Protection Fund set up by recognised stock exchanges in <st1:place><st1:country-region>India</st1:country-region></st1:place>, either jointly or separately, as the Central Government may, by notification in the Official Gazette, specify in this behalf: </i>is not included in computing the total income of the previous year.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has notified UP Stock Exchange Investors Protection Fund as an Investor Protection Fund set up by Uttar Pradesh Stock Exchange Association Limited.</font></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><u><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2006/it06not0364.htm">NOTIFICATION NO. 364/20006, December 1,2006</a></u></font></p> <p align=center><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font color="#006600">Lifting the legislative veil – intent of the statute</font></b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Interpretation of the statute is an activity we spend a lifetime in. Are our tax laws badly drafted? And how do you interpret them? Law making is a very difficult job and whatever precautions you take, there are bound to be certain loop holes, especially when searching for loop holes is a full time profession with those concerned even remotely with the law. When Dr. Johnson wrote his dictionary, a young girl told him that she was happy that he did not include the vulgar words in his dictionary. “ Were you looking for them, my girl?” asked the great lexicographer. The law maker’s job is equally difficult. There are many (including DDT) who look for the loopholes. Then what about the infirmities of the law? How do we live with them? The best solution is to put the draft for public scrutiny and analysis and then study the critical comments and make amends wherever necessary. But then law is often made in a hurry and there is not enough time to study the comments. Further Lawmakers often attain a level of arrogance where they do not accept other peoples’ suggestions. So what do we do when the laws are not clear? Should we lift the legislative veil to look at the angelic face of law as it was conceived for it must be accepted that<b> “The cardinal principle of law is that every law is designed to further the ends of justice but not to frustrate on the mere technicalities”. </b>We have created laws for social good, but we are so obsessed with the words of law( and perhaps rightly so) that we have become slaves to the words and fail to realise the purpose for which laws are made. It would be of some consolation to us that we are not alone in this. As they say it is a global phenomenon. Eminent judges all over the world had had occasions to correct the draftsman’s mistakes. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> It would be interesting to note the following passage in  <i>Maxwell on Statutes</i> (10theEdn.) at page 229, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Where the language of a statute, in its ordinary meaning and grammatical construction, leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence.... Where the main object and intention of a statute are clear, it must not be reduced to a nullity by the draftsman’s unskilfulness or ignorance of the law, except in a case of necessity, or the absolute intractability of the language used.”</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <i>Seaford Court Estates Ltd.</i> v. <i>Asher</i> 1949-2 All ER 155 at p.164, Lord Denning made his now famous remarks,</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“When a defect appears a Judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament ... and then he must supplement the written word so as to give force and life" to the intention of the legislature...A Judge should ask himself the question how if the makers of the Act had themselves come across this ruck in the texture of it, they would have strengthened it out? He must then do as they would have done. <b>A Judge must not alter the material of which the Act is woven, but he can and should iron out the creases."</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Lord Denning’s views found favour with the Indian Judiciary as Chief Justice Beg in <i>Banglaore Water Supply</i> v. <i>A. Rajappa</i> approved the observations with the words,</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Perhaps with the passage of time, what may be described as the extension of a method resembling the armchair rule in the construction of wills, <i>Judges can more frankly step into the shoes of the legislature where an enactment leaves its own intentions in much too nebulous or uncertain a state”.</i> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It may be apt in this context, to recall the view expressed by Judge Frank in <i>Guiseppi</i> v.<i> Walling</i>, 144F (2d) 608 pp. 620, 622(CCA 2d, 1944) which is quoted in 60 Harvard Law Review 370, p. 372 </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“The necessary generality in the wordings of many statutes, and ineptness of drafting in others frequently compels the court, as best as they can, to fill in the gaps, an activity which no matter how one may label it, is in part legislative. Thus the courts in their way, as administrators in their way perform the task of supplementing statutes. In the case of courts, we call it ‘interpretation’ or ‘filling in the gaps’; in the case of administrators we call it ‘delegation’ or authority to supply the details.”</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">May be it is in this context that Board instructions attain the status of law.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Chief Justice KokaSubba Rao, speaking for the Bench in  <i>Chandra Mohan</i> v. <i>State of <st1:place><st1:State>Uttar Pradesh</st1:State></st1:place> & Ors.</i> 1967 (1) SCR 77 has pointed out that the fundamental rule of interpretation is that “ in construing the provisions of the Constitution or the Act of the Parliament, the Court will have to find out the express intention from the words of the Constitution or the Act, as the case may be... and eschew the construction which will lead to absurdity and give rise to practical inconvenience or make the provisions of the existing law nugatory”.</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Justice A.P. Sen. in <i>Organo Chemical Industries</i> v. <i>Union of India</i> 1980 (1) SCR69 observed;</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“A bare mechanical interpretation of the words ‘devoid of concept or purpose’ will reduce most of legislation to futility. It is a salutary rule, well established, that the intention of the legislature must be found by reading the statute as a whole.”</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Justice Krishna Iyer, in <i>Chairman, Board of Mining Examination and Chief Inspector of Mines and Another</i> v. <i>Ramjee</i>AIR 1977 SC 965, in his inimitable effective style remarked <b>“To be literal in meaning is to see the skin and miss the soul of the Regulation.”</b></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So it is the soul and not the body that matters, but who will search for the soul? Can the officers do it?. Best thing is to keep body and soul together. Easy said than done?</font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until tomorrow with more DDT </font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></span></font></p> </body> </html>