The Hindu Business Line : Putting life into the letter of law

Courts have to put life into the letter of law by giving a construction which is fair, reasonable and in conformity with its purpose. Where the intention of the Legislature is unclear, it is the Court's duty to discern the intention in the context of the background in which a particular section is enacted.

COURTS have a significant role to play in shaping the contours of the Law while interpreting a provision which may be silent on certain aspects. A law cannot be framed to deal with every situation because if that is done, the law would be so complicated that it would make interpretation of the statute incongruous. Courts, therefore, have to fulfil the role of putting life into the letter of the law by giving a construction which is fair, reasonable and in conformity with the purpose for which the law is framed.

In Rakesh Wadhawan v. Jagdamba Industrial Corporation ([2002] 5 SCC 440), the apex Court held that a statute can never be exhaustive. The Legislature is incapable of contemplating all the possible situations that may arise in a future litigation and in myriad circumstances. There is always scope for the Court to interpret the law with pragmatism and consistently with the demands of varying situations. The construction placed by the Court on statutory provisions has to be meaningful. The legislative intent has to be determined and effectuated.

In Unique Butyle Tube Industries (P.) Ltd. v. U. P. Financial Corporation ([2003] 2 SCC 455) the Supreme Court held that it is a well-settled principle of law that the Court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the Legislature. The language employed in a statute is the determinative factor of legislative intent. The first and primary rule of construction is that the intention of the legislation must be found in the words used by the Legislature itself. The question is not what may be supposed and has been intended but what has been said, "Statutes should be construed, not as theorems of Euclid", Judge Learned Hand said: "but words must be construed with some imagination of the purposes which lie behind them".

This view was iterated in Union of India v. Filip Tiago De Gama of Vedem Vasco De Gama (SCC p. 284, para 16). In Luke v. IRC (1963 AC 557 (HL)), Lord Denning stated that it would be idle to expect every statutory provision to be drafted with divine prescience and perfect clarity.

As Judge Learned Hand said, "we must not make a fortress out of a dictionary but remember that statutes must have some purpose or object, whose imaginative discovery is judicial craftsmanship. We need not always cling to literalness and should seek to endeavour to avoid an unjust or absurd result. We should not make a mockery of legislation. To make sense out of an unhappily worded provision, where the purpose is apparent to the judicial eye, some violence to language is permissible."

In D. Saibaba v. Bar Council of India ([2003] 6 SCC 186), the Court held that reading word for word and assigning a literal meaning would lead to absurdity, futility and to such consequences as Parliament could have never intended, the provision has an ambiguity and is capable of being read in more ways than one. Therefore, a meaning to the provision must be assigned and, so read, it would give life to an otherwise lifeless letter and enable the power of review to be effectively exercised.

Justice Frankfurter in his article "Reflections on the Reading of Statutes" (47 Columbia LR 527) stated that legislation has an aim; it seeks to obviate some mischief, to supply an inadequacy, to effect a change of policy, to formulate a plan of Government. That aim, that policy, is not drawn, like nitrogen, out of the air; it is evidenced in the language of the statute, as read in the light of other external manifestations of purpose.

In State of Karnataka v. Appa Balu Ingale (1995 Supp. (4) SCC 469), it was held that a judge must be endowed with the Legislator's wisdom, historian's search for truth, prophet's vision, capacity to respond to the needs of the present, resilience to cope with the demands of the future and to decide objectively, disengaging himself from every personal influence or predilection.

Therefore, judges should adopt a purposive interpretation of the dynamic concepts of the Act, with its interpretative armoury to articulate the necessities of the time. To construe law one must enter into its spirit, its setting and history. Defining the mischief rule, the Supreme Court held in Kehar Singh v. State ([1988] 3 SCC 609) that if the words are ambiguous, uncertain or any doubt arises as to the terms employed, the Court must deem it as its paramount duty to put into the language of the Legislature a rational meaning. The Court must then examine every word, every section and every provision. It must examine the Act as a whole. The Court must examine the necessity which gives rise to the Act. The Court must look at the mischief which the Legislature intended to redress.

The Supreme Court, in Bharat Singh v. Management of New Delhi Tuberculosis Centre ([1986] 2 SCC 614), held that in interpretation of statutes, Courts have steered clear of the rigid stand of looking into the words of the section alone but have attempted to make the object of the enactment effective to render its benefit to the person in whose favour it is made. It is here that the Court has to evolve the concept of purposive interpretation that has found acceptance whenever a progressive social beneficial legislation is under review.

Plain words have to be accepted as such but where the intention of the Legislature is not clear from the words or where two constructions are possible, it is the Court's duty to discern the intention in the context of the background in which a particular section is enacted. It is always the Court's duty to give such a construction to a statute as would promote the purpose or object of the Act. A construction that promotes the purpose of the legislation should be preferred to a literal construction.

The need for putting life in the letter of law would be particularly relevant in case of the provision pertaining to re-opening of tax assessments under Section 147 of the Income-tax Act, 1961 which requires that a notice be issued under Section 148 within the prescribed time. Under Section 148(2) the Assessing Officer is required to record his reasons before issuing a notice, stating the grounds on which he has reason to believe that income has escaped assessment. This Section is silent on the issue regarding `communication of reasons' and whether the same are to be communicated before or after filing of the revised return pursuant to the notice.

It is in such cases that Courts are required to fill in the gap and make the provision `meaningful' and `purposive' without doing violence to the `pith and substance' of the provision and object/intent of the Legislature. Settled principles of `statutory interpretation' require that a provision in a legislative enactment is to be interpreted in a manner which conforms to rules of natural justice, that is, which may not be against a sense of `fairness' and `good conscience'.

Since Section 148(2) is silent on the question of communication of reasons to the assessee which have been recorded by the Assessing Officer before issue of notice, it is necessary to consider whether the Legislature intended that reasons need to be communicated to the assessee and, if so, the time when it needs to be done.

According to the Allahabad High Court in Mithlesh Kumar Tripathi v. C.I.T. ([2005] 149 Taxman 692), it is necessary that reasons be communicated along with the notice so that an assessee is informed of the `ground' for initiating reassessment proceedings. This would enable an assessee to be aware of the basis/foundation on which the notice is issued, as well as to take care, while filing a fresh return, to disclose/explain any other income, if any, that may have otherwise escaped assessment.

According to the Court, Section 148(2) is to be read in a manner that serves the legislative intent/object in inserting Section 148(2) in the Act and makes the provision `meaningful' and `purposive'. Therefore, Section 148(2) expressly requires `recording of reasons'.

Keeping the above object of the Legislature in mind, Courts, including the Apex Court, interpreted the Section by laying down that reasons have to be communicated, as otherwise the same will remain a mere formality with no ultimate purpose or object to be served. According to the Courts a notice under Section 148(2) of the Act without disclosing reasons cannot be considered to be a notice in the eye of law because such a notice would lack basic information.

An assessee would be unnecessarily harassed if reasons are not communicated along with the notice. Reasons are generally not supplied promptly even when asked for. In a large number of cases, an assessee has no option but to rush to the High Court by filing a writ petition which unnecessarily burdens the over-loaded dockets of the Courts.

The Allahabad High Court, therefore, held that Section 148(2) of the Income-tax Act requires reasons to be recorded to check arbitrary action and also to give the assessee a chance to disclose the `escaped income', whether detected by `Revenue' or not. To give notice may be an `administrative action' but the very act of giving notice, backed by good and valid reasons, is a quasi-judicial function which is mandated by the statute. Therefore, it is necessary for the Assessing Officer to communicate reasons when the notice under Section 148 is served.To conclude, the aforesaid principle marches with the hypothesis that it is the duty of the Courts to iron out the creases, clear the surrounding areas, fill in the gaps and make the statutory provision, as it exists, meaningful so as to subserve the ends of justice.

(The author, a Mumbai-based advocate specialising in tax laws, can be contacted at ranina@bom2.vsnl.net.in)

More Stories on : Courts/Legal Issues | Taxation

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Moving ahead with SAFTA

Putting life into the letter of law

The long and short of rights

The promotion commotion

Logistically speaking

Hot chase of an architect amidst office furniture

An unwitting tax liability?

On the magic of being work sisters