General Principles of Drafting

Drafting and writing.—Drafting is the primary stage of

writing. A good writing is an outcome of a good draft. The
principles of good drafting and good writing are identical.
The principles of good writing irrespective of the purpose
are the same, though the subsidiary rules differ according
to the different purpose of working.
Qualities of good Drafting or Writing.
(a) Conciseness-A good draft should be in a concise
form. The concise form means the material facts and
necessary words should be used and a good draft or
writing should avoid inclusion of unnecessary and
immaterial statement which in no way is in relation to the
subject-matter.Therefore, draft should be to the point only
and as far as possible vagueness should be avoided
otherwise the draft will be unnecessarily lengthy. A good
draft, therefore, should contain only
essential facts and appropriate words and phrases. The
lengthy drafts/writings also does not give a
good impression to the reader. Therefore, keeping in mind
the interest of reader too, a good draft
should be in a concise form.
(b) Clarity.—There should be absolute clarity in writing so
that the reader is able to understand its
contents without stress or strain. The language used
should be such so as to enable the readers to
understand easily. As far as possible, simple words
should be used which will avoid any confusion in
the jnind of reader. However, it should be answered that
thoughts are exactly expressed. A good
writing should contain various paragraphs for expressing
various ideas or subject matter. It will avoid
mixing of different ideas and matter.
(C) Completeness.—A writing should be free from all
deficiencies in Grder to ensure the
completeness about the matter on which it is intended. A
good writing should contain all the essential
information and it should answer all the possible
questions which may struck to the mind of the
reader. It means nothing material related to the subject-
matter be left out.
(d) Preciseness.—Precision is another important factor of
a good writing. The facts contained should
be accurate and there should be no ambiguity. There
should be a perfection in the statements made.
The writing should be free from grammatical, spelling and
punctuation mistakes.
(e) Pleasant accent.—It is an art of good writing to create
an impression on its reader by using
courteous and polite words. A good writing should reflect
all the desired courtesy, of course having
regard that to whom it is addressed. Politeness plays a
good role in writing.
The salient features of good drafting/writing are deduced
as follows :
(i) Selection of correct words.—
The selection of right word at the right place is the golden
rule of good writing. The words used
should be such so as to convey the real meaning of the
writer to the reader. Therefore, one has to be
very careful in using the correct and right words for the
convenience of reader in understanding the
contents, words should always be used in the same
sense. The choice of right words is also necessary
in order to make the meaning clear not only to the reader
but to the writer himself. It is also important
that, as far as possible, familiar words should be used.
Use of words with precise meaning be
preferred to give clarity. Use of vague words will create
confusion about the contents in the mind of
reader. To avoid such a situation words with accurate
meaning are to be used, words should be used
to the extent only that are necessary to express the
meaning and no more words should be used. Use
of superfluous adjectives be not made. Strong words like
urgent, crisis, essential should be used only
when they are really needed but these words lose their
force if used frequently. A document should
be so worded as to convey the clear meaning to any
person who has knowledge of the subject
matter. Use of long and uncommon words be avoided,
instead short and simple words be employed
in the construction of sentences. In drafting the technical
documents, technical words that are
appropriate may be used.
(ii) Clear and firm thinking.— It is an important aspect of
good drafting that the writer
should have clear thinking about the subject-matter that
he is going to write. In absence of clear
thoughts, the writer will not be able to express himself with
clarity and the document in question will
create a confusing situation to the reader. Therefore, it is
essential that the draftsman should conceive
the ideas and thoughts before reducing them to writing.
Clear thinking will result in the systematic
arrangement of che subject-matter in a draft/writing.
Undoubtedly clear thinking is hard work but loose thinking
will produce loose writing. Clear
thinking often takes time but that is fruitful rather than
making a mass of subject and its contents.
Therefore, it is pertinent to mention that lucidity in
drafting/writing is an important factor which plays
its part gainfully.
(iii) Courtesy and Politeness.—It is an important and
significant ingredient of a good drafting. The
utility of due courtesy and politeness in writing goes
without saying pay its dividend. The reader is
delighted to read and usually gives prompt response.
Thus by observing politeness in writing the
reader achieves its objective of receiving prompt reply. A
draftsman must possess the skill of using
polite language.
(iv) Logical arrangement.—A good draft should contain
logical arrangement meaning thereby that
statement/events should be so arranged in chronological
order that the reader is able to
understand the subject-matter properly without being
trapped into any confusion. This is an art of
writing and describing the subject in an orderly manner.
There should be consistency in writing to
create a good impact on its reader. A logical arrangement
obviates the chance of omission or
repetition.
Arrangement of paragraphs should be very carefully done
in order to segregate
the different items of a document. It will ensure non-
mixing of different items in the same
paragraph. In a long document the writer will find it
convenient to be orderly and systematic in the
use of numbers and letters for sub-clause and
paragraphs.
(v) Short sentences.—Simple and short sentences be
used which must be complete and accurate.
Use of long sentences should be avoided. The language
need not be intricate. If long sentences are
used there is apprehension that the meaning of the same
might not be clear. Therefore, to avoid such
a situation, it is always useful to construct short and
simple sentences. In commercial documents
also, the ordinary and simple business language shall be
the right course to be undertaken. However,
while preparing technical document, use of technical
terms and phraseology is an inescapable
necessity. Language should never be changed unless it is
desired to change the meaning.
Piesse and Gilchrist propounded the following rules :
(a) Before commencing the draft the draftsman should
conceive the whole design of it.
(b) Nothing is to be omitted or admitted at random.
(c) The order of the draft should be strictly logical.
(d) The ordinary and accustomed forms of instruments
and technical language should be
employed.
(e) Legal language should be, to the utmost possible
extent, precise and accurate.
( f ) The draft must be readily intelligible to laymen.
General principles or guidelines.—Much of the
professional lawyers' work consists of the drafting of
legal documents. These include agreements, bonds,
conveyances, leases, mortgages, notices and so
on. There are general principles or guidelines that can be
usefully followed in drafting such
documents. There are also some rules of special
application to particular kinds of documents. It
would be worthwhile to 'discuss some of these guidelines.
10 Important Elements of Legal Drafting.
Legal drafting can be defined as the synthesis of law and fact in a language form. This is the
essence of the process of drafting. All three characteristics rank equally in importance. It is
the development and preparation of legal instruments such as constitutions, statutes,
regulations, ordinances, contracts, wills, conveyances, indentures, trusts and leases, etc.

The process of drafting operates in two planes: the conceptual and the verbal. Besides
seeking the right words, the draftsman seeks the right concepts. Drafting, therefore, is first
thinking and second composing.

Drafting, in a legal sense, means an act of preparing the legal documents like notices,
contracts, affidavits etc.

1. Be clear…

Be clear as to what the document means to say, does not mean to say and need not say. Make
your self well-versed with various provisions of laws the legal document deals with.

2. Remove the ambiguity…

Try to clear all the ambiguous instances from the document. The statements made in the
documents should not communicate more than one concept…

3. Be precise…

The matter to be covered by a draft should be precise and concise. It must convey the
complete message for which it is prepared. The reader should feel inspired by it.

4. Clarity…

There must be clarity and preciseness not only in each sentence but also in the overall
presentation of the draft. There must be a nexus between sentences and different paragraphs.
The draft shall be in sequence and relevant to the subject matter.

5. Unilateralism…

be prepared for vetting, review without necessarily accepting casual and non-contextual
suggestions. Clarity as to the bare minimum contents you require for protecting and
safeguarding your interest has to be adhered to.

6. Remember the chronology…

If the document is supplementary to any other master document/s make sure to comply with
master documents and other supplements as well. If needed, draft the details of the other
documents in a chronological order.

7. Define important things…

Include a chapter of definitions to define and explain the important technical concepts
relating to the document. Make sure to adhere to the definitions throughout the document.
The chapter containing the definitions is placed at the beginning of the document.

8. Adaptability…

The matter to be included in a draft must be adaptable to the factual position, to the
circumstances of the case and feasible/suitable to the enforcement.

9. Lucidity…

The language and words used while drafting must be lucid, simple and appropriate to the
situation. There should not be longer sentences or paragraphs. It must convey the message
involved in it to a person of ordinary prudence. The language must be polite and make the
other side form a good opinion.

10. Be Logical…

So that the risk of omission and repetition is minimized. Comply with incidental mandatory
requirements… such as stamping of documents, registration, vetting, etc. Respect precedent
and forms… without converting yourself into a mechanical follower, so that allegations like
“non-application of mind” or “cut and paste” technologist can be avoided.

'Nomography' is the name given to the subject that deals with the drafting of laws. It is, in
other words, Legislative Drafting in a broad sense.
The objective of 'Legislative Drafting' is to attain beauty and utility, and, the draftsman's
major responsibility is to attain these two or strike a
harmony between them.
•The draftsman is a 'creative artist’.
•He gives form or shape to ideas, converts vague ideas into concrete words, and reduces
proposals: social, economic, political legal, reform etc.
into writing.
•Legislative drafting mainly deals with the drafting of bills intended to become a part of
statute law.
•In a broader sense, it includes the drafting of statutory orders, rules and other instructions
issued by the Govt.,
•It also includes the drafting of bye-laws of corporations, municipalities and other forms of
subordinate legislation.
•‘A perfect draftsman is not born yet’.- Bhakshi - An introduction to Legislative Drafting.
•But, to aim at perfection should be the aim of all draftsmen.
•The subject legislative drafting, shows the avenue to reach this perfection
Classification Of Statutes
 
In order to study the classification of statute one must know what are statutes and then its
classification etc. Black LAW Dictionary defines the term 'statutes' as a formal written
enactment of a legislative authority that governs a country, state or city.

The Constitution of India does not define the term Statute. Instead it uses the term "Law".
The term law is defined in Article-13(3) (a) as to include any ordinances, order, bye-law,
rule, regulation, notification, custom, or usage having force of law. Itwould be appropriate to
say that statute is the will of Indian Legislature. Indian statute is the act of Central or State
legislature. Statues also include laws passed by Provincial Legislature in Pre- Independence
days as well as regulations. Statutes are rules made by legislative bodies; they are
distinguished from case law or precedents, which is decided by courts and regulations issued
by government agencies.

The term statute is also used to refer to an International treaty that establishes an institution,
such as the Statute of the European Central Bank, a protocol to the international courts as
well, such as the Statute of the International Court of Justice and the Rome Statute of the
International Criminal Court. Statute is also another word for law. The term was adapted
from England in about the 18th century. A statue may be classified with reference to its
duration, nature of operation, object and extent of application.

Classification with reference to duration such a mode classifies a statute as:

1. Temporary statute
2. Permanent statute.

A temporary statute is one which where its period of operation and validity has been fixed by
the statute itself. Such an act continues in force unless repealed earlier, until the time so fixed.
After the expiry of the act if the legislature wishes to continue it, a new enactment is required.
The Finance Act is the temporary act and is required to be passed every year. Whereas, a
permanent statute is one where no such period has been mentioned but this does not make the
statute unchangeable but such statue may be amended or repealed by another act.

Classification with reference to method such mode classifies a statute as:

a. Mandatory, Imperative or Obligatory statute.

b. Directory or Permissive statute.

A mandatory statute is one which compels performance of certain things or compels that
certain things must be done in a certain manner or form. A directory statute merely directs or
permits a thing to be done without compelling its performance. In some cases, the conditions
or forms prescribed by statute have been regarded as essential to the act or thing regulated by
it and their omission has been held fatal to its validity. In others such prescriptions have been
considered as merely directory, the neglect of them involving nothing more than liability to a
penalty if any were imposed, for breach of enactment.
In H.V. Kamath v. Ahmad Ishaque it was held that mandatory provision has to be strictly
observed whereas substantial compliance of a directory provision is enough.

Classification with reference to object:

A statute may be classified with reference to its object as:

a. Codifying Statute
A codifying statute is one which codifies the law, or in other words which purports to
state exhaustively the whole of law upon a specific subject. The code contains the pre-
existing provisions in different statute on the subject as well as the common law on it.
For instance, the Bill of Exchange Act 1882 in England is an act to codify the law
relating to Bills of Exchange, Cheques and Promissory notes.

The Hindu Succession Act, 1956 is a codifying statue with respect to intestate
succession among Hindus. The foremost purpose of the codifying statute is to present
an orderly and authoritative statement of the leading rules of the law on a given
subject whether those rules are to be found in a statute or common law.
 
b. Consolidating Statute
A consolidating statute is one which consolidates the law on a particular subject at
one place; it collects all statutory enactments on a specific subject and gives them the
shape of one statue with minor amendments if necessary. For example in England the
Law of Property act 1925which consolidates the acts of 1922 and 1924 is a
consolidating act.

Similarly in Australia the New South Wales Justice act, 1902 is a consolidating act. In
India the Code of Criminal Procedure, 1973 is consolidating statute relating to
criminal procedure. A consolidating statute may not be a mere compilation of earlier
statute. The purpose of consolidating act is to present the whole body of statutory law
in a subject in a complete from repealing the earlier acts.
 
c. Declaratory statute
It is a statute which removes doubts either in the common law or statutory law.
Passing of a declaratory statute becomes desirable when certain expressions in
common law or statutes are being misunderstood. This may happen, for instance
where the courts have been interpreting a particular expression as connoting a specific
meaning which the legislature feels is a wrong notion of the expression.

In such cases the legislature may pass a declaratory statute declaring the correct
meaning of that expression. In the case of The Central Bank of Indiav. Their
Workman, it was held that a declaratory statute contains a preamble and also the word
declared as well as the word enacted. Mere use of the expression 'it is hereby declared'
does not necessarily make the statute a declaratory statute. In India, the Income Tax
(amendment) Act, 1985 which added explanation 2 to section 40 of the Income Tax
Act, 1961 and the Finance Act, 1987 amending the definition of "Owner of house
property" in section 27 are declaratory acts.
 
d. Remedial statute
A remedial is one whereby a new favour or a new remedy is conferred. The main
 object of passing such a statute is to make improvements in the enforcement of one's
rights or for redress of wrongs and remove defects or mistakes in the former law.
Some illustrations of remedial statutes are the Maternity Benefits Act, 1961 and the
Workmen's compensation act 1923. In remedial acts the words "for remedy whereof"
have been used immediately before the language of the enactment.

Blackstone holds the view that remedial statutes could be enlarging as well as
restraining. The acts could be enlarging when narrow common law was widened or
restraining when existing common law right was cut down. In Central Railway
Workshop, Jhansi v. Vishwanath, it was held that all the legislations in a welfare
state is enacted with the object of promoting general welfare, but certain types of
enactments are more responsive to some urgent social demands and also have more
immediate and visible impact on social vices by operating more directly to achieve
social reforms.
 
e. Enabling statute.
According to Craies, "many statutes have been passed to enable something to be done
which was previously forbidden by law, with or without prescribing the way it is to be
done". An enabling statute is one which enlarges the common law where it is narrow.
It makes doing of something lawful which would not be otherwise lawful.

In Bidi, Bidi Leaves and Tobacco Merchants Association v. State of Bombay, it

was held that by an enabling act the legislature enables something to be done. It
empowers at the same time by necessary implications to do the indispensable things
for carrying out the object of the legislature. The conditions which have been put by
an enabling act for the public good must be compiled with as they are indispensable.
Section 49-A (1) and 49-A (2) of the Advocates act 1961 as amended by act 21 of
1964 is an example of enabling act.
 
f. Disabling statute
A disabling statute is one which restricts or cuts down a right conferred by the
common law. An act restraining a common law right is a disabling act.
 
g. Penal Statute
A penal statute is one which punishes certain acts or wrong. Such Statute may be in
the form of a comprehensive criminal code or large number of sections providing
punishment for different wrongs for example - Criminal Procedure Code, Indian Penal
Code, Prevention of Food Adulteration act, 9154, Arms act 1959.

The penalty for disobedience may be in the form of fine, forfeiture of property,
imprisonment, death sentence etc. Where the obedience to law is enforced not by an
individual action but by a command of the law in the form of punishment the statute is
penal. A penalty can be imposed only when the letter of the law says so
unambiguously and any doubt has to be resolved in favour of the alleged offender.
 
h. Taxing Statute
According to Lord Halsbury and Lord Simonds stated:
"The subject is not to be taxed without clear words for that purpose; and also that
every Act of Parliament must be read according to the natural construction of its
words."
 A taxing statute is one which imposes taxes on income or certain other kinds of
transaction. It may be in the form of income tax, wealth tax, sales tax, gifts tax etc. It
is a source of revenue generation for the state. The money so collected is utilized for
welfare of the people. Tax can be levied only when a statute unequivocally so
provides by using express language to that effect and any doubts is resolved in favour
of the assessee.
 
i. Explanatory Statute.
An explanatory statute is one which explains a law. In Keshavlal v. Mohanlal, it was
held that an explanatory statute is enacted with the view to supply an apparent
omission or to clarify ambiguity as to the meaning of an expression used in the
previous statute. An act enacted for the express purpose of explaining or clearing the
doubts as to the meaning of a previous Act is an act of explanation or an explanatory
statute. For instance the Royal Mines Act, 1688 in Britain was passed to encourage
mining certain base metals with Royal Mines act 1963 was enacted for better
explanation of the earlier act. The latter is an example of explanatory statute.
 
j. Amending Statute.
An amending statute is one which makes an addition to or operates to change the
original law so as to effect an improvement therein or to more effectively carry out
the purpose for which the original law was passed.9 An amending statute cannot be
called a repealing statute. It is a part of law it amends. Direct Taxes Amendments act
1974; Direct Taxes Amendments acts 1986, Land Acquisition (amendments) 1984 are
examples of amending statute.
 
k. Repealing Statute.
A repealing statute is one which repeals an earlier statute. This revocation or
termination may be express or explicit language of the statute or it may be necessary
implications also. For example The Hyderabad District Municipalities Act, 1956 was
a repealing act which repealed the Hyderabad Municipal and Town Committees Act
1951.
 
l. Curative or validating Statute.
A curative or validating statute is one which is passed to cure defects in prior law, or
to validate legal proceedings, instruments or acts of public and private administrative
authorities which in the absence of such an act would be void for want of conformity
with existing legal requirements but which would have been valid if the statute had so
provided at the time of enacting. A validating legislation normally contains the
expression notwithstanding any judgment, decree or order of any court. The purpose
is just to validate some actions which would be otherwise be unlawful or which may
have been declared invalid by a court.

In Amarendra Kumar Mohapatra and others v. State of Orissa and others,

The Hon'ble Supreme Court of India with respect to Articles- 254, 254, and 50 of the
constitution while adjudication of rights is essentially a judicial function, the power to
validate an invalid law or to legalize an illegal action is within the exclusive province of
legislature. Exercise of that power by the legislature is not therefore an encroachment on
judicial power of the court.
But when the validity of such validation act is in question the Court would have to
carefully examine the law and  determine whether:

i. The vice of invalidity that rendered the act rule, proceedings or action invalid has
been cured by the validating legislation,
ii. Whether the legislature was competent to validate the act action proceedings or rule
declared invalid in the previous judgments and
iii. Whether such validation is consistent with the rights guaranteed in part III of the
constitution.

It is only when the answer to three questions is in the affirmative that the validation act can
be held to be effective.

Conclusion.
To conclude the above mentioned things it would be appropriate that each and every statute
has its specifications and are enacted for the welfare of the citizens. The biggest statute which
governs our country and portrays the adequate standard of living as well as provides remedies
to approach to Hon'ble Supreme Court of India whenever there is violation of fundamental
rights i.e. basic rights guaranteed to each and every citizens of India without any
discrimination, is our Constitution of India.

The most important thing is that all the laws are interconnected with the Constitution of India.
Whenever a statue is being prepared in India by the legislature, the foremost thing which is
inscribed in the minds of the legislature that the statute which they are preparing does not
violate the provisions mentioned in the Constitution of India otherwise it will be declared
unconstitutional. There must be a nexus between the Indian constitution and that particular
statute in order to get it implemented in India and the very same thing applies to pre-
constitutional laws, customs etc. If anything is contrary in the pre-constitution with the
constitution of India, it will be declared unconstitutional.

The very unique feature of our Constitution is that there are doctrines and test mentioned in
Article-13 and Article-14, on which a new law or an old customs is tested even if there is
slightest possibility of violation of fundamental rights. They are doctrine of severability,
eclipse, waiver, territorial nexus and test of intelligible differentia mentioned in Art. 14 of the
Indian constitution and also there is a test popularly known as test of proportionality being
implemented by the Hon'ble SC to check the law in its cases whenever there is violation and
the law is contrary to the fundamental rights.
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Legislative drafting notes

Measures to attain clarity
•Reed Dickerson has suggested a number of measures to attain clarity in legislative drafting
•The drafting of statutes aim at clarity, conciseness and comprehensive coverage rather than
aesthetic beauty
•It is essential that a statute is a clear, lucid and simple expression of the intended purport
•The first principle suggested by Montesquieu is that the style should be both concise and
simple
•Grandiose or theoretical phrases are merely distracting surplusage.
•Primary object is to make the meaning of his text clear and unambiguous
•Brevity of expression may be attained with out the sacrifice of clarity
•If brevity of expression leads to obscurity the matter may be further elaborated to bring out
the intention
clearer.
•Referential legislation shall be reduced to the minimum
•Sometimes one reference may lead to another and thus the result would be most confusing
•Draftsman must express the scheme in clear and unequivocal language
•He must ensure that the bill will carry into the law precisely what the sponsors intend
PRECISION AND SIMPLICITY
•In legislative drafting it is difficult to remain faithful to the requirements of precision and
simplicity at the same time
•Good draftsmanship depends on the power of clear, lucid and simple expression of the
intended purport
•As the laws of the day might affect all the people from "cradle to grave," it should be easily
understandable by the
ordinary people
•After knowing what exactly is to be included in the enactment draftsman must find clear and
appropriate language for
expressing it
•Justice Krishna Iyer -The drafting methodology should adopt directness of language and
avoid involved reference and
obscurity
•The draftsman should always try to express himself in simple English
•Should avoid long words and long sentences
•Should not use more words than are necessary to make the contents clear
•When technical matters are involved technical expressions will have to be used
•But the same meaning should be given to the same word throughout the draft
•Different words should never be used to describe the same thing
PRECISION
•Another essential for an ideal draftsmanship is that simplicity shall not be extended to the
extreme sacrificing "precision"
•The essential terminology which expresses the ideas of the sponsors of the legislation should
be brought to light by the draftsman
•For this purpose the language used shall not be too broad or too narrow
•It has to cover the subject-matter to be expressed
•As far as possible passive voice shall be used in drafting
•Different words shall not be used to denote the same thing in a statute
•Precision shall not be extended too far
•Each word has be weighed and tested, measured and refined, and fitted into a product which
will not cause any harm
•At the same time it should reflect the exact idea required to be brought out
•Arithmetical perfection may be an impossibility in legislation
•Even then it is inevitable that the draftsman must try his utmost to reduce doubts,
ambiguities, forseeable difficulties and the like to a
workable minimum
•His success depends upon the extend to which he achieves this end
ADDITIONAL REQUIREMENTS OF AN INDIAN DRAFTSMAN
•An Indian Legislative draftsman additionally requires the following
•(i) An intimate and full knowledge of the Indian Statute book
•(ii) Familiarity with legal principles as expounded by the Courts
•(iii) A full and intimate knowledge of the Constitution, particularly fundamental
Rights and provisions relating to distribution of legislative powers between the
Centre and the State
•(iv) Knowledge of procedure in Parliament or Legislative Assemblies,
administration, Courts at work including societal living conditions.
•(v) Draftsman should be aware of the rules of interpretation adopted by the Courts
•If the draft is not expressed in simple language, it is a matter of Judiciary to
interpret
•In Vaswani v. State of West Bengal the Supreme Court ruled that "lack of
Legislative simplicity has led to interpretative complexity”
•The Constitutional and other legal validity of the laws can be challenged in a court
of law
GENERAL PRINCIPLES TO BE FOLLOWED BY A DRAFTSMAN
•To get a clear understanding of the law as it stands
•Study any existing legislation regarding the matter carefully to look whether the
new legislation is actually required, or desired end can be obtainedby framing rule
•Ascertain the judicial decisions or matters under consideration or custom
•Should prepare a clear statement of what the law is and in what it is proposed to
alter
•Familiar with interpretation Act locally applicable and thorough knowledge of
General Clauses Act ,1897
•Hasty drafting is to be avoided and if compelled to draft a bill urgently should do
the best
•While amending an Act of general application special care must be taken
•Should use simple English
•Language should not be too narrow or broad
•Draftsman should refrain from using passive voice as it produces uncertainty
•Should not vary the spelling of each word
•Different matters should not be dealt with in the same Act
•Shall not insert or annex a clause froeign to what the title of the Act import
•While drafting a bill the main principle is to be considered
•It should be stated with clarity and brevity at the commencement of Bill
•Section which depends on another Section should not come before a Section on which it
depends
•Suitable provision for implementation should be in the Act
•Short title and definitions section is placed at the beginning
•Temporary and Transitory provisions should be placed at the end
•Matters in detail should be placed in a Schedule
•List of statutes intended to be repealed is to be given as separate schedules
Moral principles to be followed by draftsman
•Statute should not confer power with responsibility
•Act imposing far reaching reforms shall not be brought into force immediately
•Obligations impossible of performance should not be imposed
•Jusrisdiction of ordinary courts should not be excluded unless there are strong reasons
•Immunity from liability given to state agencies shall be kept to minimum
•When jurisdiction is given to determine questions of right provisions of appeals should also
be
provided
•Legislation should not be inconsistent with the elementary reasons, justice or common sense
General frame of a statute
•The Long Title
•The title given at the beginning of an Act
•Is not given as part of the provisions
•Usually it starts with the words, "An Act to provide .....
•Preamble :
•This is a preface to the Act
•It has been said to be a key to open the minds of the makers of the Act and the
mischief which they intended to redress
•It may be referred to for assistance in explaining the scope and objects of the Act
•Whenever added in a statute they are given as part of the Act
•It is now limited to constitutional matters of application of international conventions
•Enacting Clause : The form adopted after 26th January 1950 is as follows: "Be it
enacted by Parliament in the ………year of the Republic of India as follows“
•Short title: The Ist section in an Indian enactment usually given the "short title" of the
Act. The year of enactment is added to the short title; e.g "This Act may be called the
………. Act, year
•Serves as signboard for the act main object is to facilitate citation of the Act
•Should be simple and short
•Must not mislead the reader by concealing or overstressing the Act
•Extent and Commencement
•The extent clause will also be given in the 1st section of the Act
•It deals with the territorial extent of the operation of the Act
•The usual form is. "It extends to the whole of India“ or it may extend to the whole of India
except the State of
……………
•Commencement Clause
•Usually commencement Clause runs as follows
•The Act shall come into force at once
•The Act shall come into force on such date as Central government by notification in the
official gazette will appoint
•Sometimes may be partial
•In some cases it may be specifically provided that the Act is to come into force on a later
date or on different
dates in different States or with respect to different provisions or retrospectively
•Application
•Some laws may be extra-territorial in application. Usually a special provision is included
making it clear e.g.The
Indian Penal Code
•Definition Clause
•The section dealing with definitions
•The definitions are framed to suit a particular Act
•The draftsman may also use a glossary of terms or the words defined in the General Clauses
Act
•Definition should be neat clear and precise
•Should not be framed as to make the word defined difficult to understand
•Words which are not used in the Act should not be defined
•If intended to vary any definition in General Clauses Act must be done expressly
•Words or phrases once defined shall retain the same meaning throughout the Act
•Usually contains the expression “means” and “includes” Expression ‘means’ is explanatory
while ‘includes’ is
extensive
•Words ‘and ‘ or ‘or’ should not be used differently
•If intention is to separate things ‘or’ is used
•The Substantive provisions :
•This provision sets out the basic objectives and the "main principle" of the Act
•The main objects, purposes, principles, the leading motives etc. will be stated in clear terms
•This should be followed by the administrative or "machinery" part which generally includes
the
authorities administering the law
•Provisions regarding the "sanctions" for the enforcement of law shall also be included.
•Penal provisions
•Penal provisions must be clearly expressed
•Court should be given power to inflict suitable punishment
•If Infliction of penalty is not to exclude civil liability should be provided expressly
•Miscellaneous provisions
•Protections of action taken in good faith by authorities, exemptions from the operation of the
Act and power to delegate
functions or to make rules will form the major part of this
•The proviso
•Whenever necessary can be inserted below a section, subsection, clause or sub-clause as the
case may require.
•The proviso should always be printed separately from the main part of the section
•The main functions of the proviso are as follows :-
•To create an exception in respect of certain matters which would otherwise come within the
section
•To quality or restrict the operation of the main part of the section
•To exclude some possible mis-interpretation of the section. A pro vise should never be used
to extend the scope of the section.
•Repeals
•Temporary or transitional provisions relating to repeal or amendment or other laws will
generally come at the end
•When whole of the section or subsection is to be repealed usual form is ………………… of
the principal Act is hereby repealed
•When certain words are deleted and other words are to be substituted the form is In Sec
…………. of the Act for the words
…………. The words…………………. shall be substituted
•Schedule
•In some enactments there will be the necessity to add a schedule
•Sometimes there may be more than one schedule, eg. Constitution of india, the Indian
Companies Act,
•Saving Clause
•Object is to preserve what is already existing and not to create new rights and obligations
•Included to establish beyond doubt that provisions of new statute is in addition to the
existing law
•Form- “Nothing in this Act shall effect or derogate from……………………..
FLAWS IN DRAFTING
•Legislative drafting should be free from flaws.
•The common flaws which might arise in drafting may be summarised as follows:
1. Ambiguity :
•Ambiguity may arise due to faulty structure of the provisions.
•It can be avoided by rearrangement of words
•Obscure and legally meaningless words are to be avoided.
2. Redundancy :
•Repetitions may occur either in the case of provisions or of words
•If the same provision is repeated with a difference it may lead to inconsistency
•So also pair of words having the same effect, like, 'each and every', 'authorise and empower',
etc., are to be avoided
3. Obscurity:
•This may be due to the use of unnecessary words or by not using the appropriate words in
the appropriate place.
•Sometimes obscurity may result by reason of too few words.
•Sir William Dale summarise the reasons for obscurity thus:
•a) Long, involved sentence and sections.
•
•b) Much detail, title principle.
•
•c) Indirect approach to the subject matter.
•
•d) Subtraction, as in, 'subject to 'provided that'".
•
•e) Poor arrangement.
•
•f) Schedules - too many and too long.
•
•g) Cross references to other Acts
4. Vagueness
•Vagueness of provisions, particularly in penal statutes may make it difficult to fix the guilt
on any person due to the
vagueness of the provision.
5. Unenforceability
•Due to the presence of some lacuna or due to lack of any provision for the sanctions to be
applied for violation, a
law may not be capable of enforceability.
Various Classes of legislations
1. Temporary and Perpetual
•In the case of temporary enactments the duration will be limited but in the other it will not
be so limited
•Until repealed the latter will be in force
2. Prospective and Retrospective
•Normally a statute will be for the future, i.e., prospective, when it creates new obligations
rights, or imposes new disabilities and
duties or takes away rights already vested
•The legislation is retrospective when such limitations or rights are given effect from a period
prior to the enactment.
3. Directory and Mandatory
•A directory statute is of a recommendatory nature
•Mandatory or imperative statute or provision in a statute is of an obligatory character and the
non- fulfilment may result in penalty
4. Remedial statutes
They confer new favour or remedy of a beneficial character
5. Enabling and Disabling statutes
•Enabling law enlarges the existing common law
•A disabling statute restricts the rights existing under common law
6. Declaratory statute
It is an Act passed to remove some existing doubts or to correct an interpretation which is
erroneous according to the legislature.
7. Penal statute
•It imposes a new disability or punishment for violation of its provisions where in offences
may be
defined
8. Codifying and consolidating Acts
•When the entire law on a subject is reduced to a single statute, it is codification
•A consolidating statute consolidate in one Act the provisions contained in a number of
statutes
as interpreted and applied by judicial decisions
9. Repealing and Amending Acts
•One statute which terminates another expressly or by necessary implication is a Repealing
Act
•Amending Act is for the purpose of making an addition or alteration to the original Act.
10. Validating Act
•It is an Act to validate a statute which would otherwise be invalid or which may have been
declared invalid by a competent Court
  Introduction
 Interpretation meaning
 Construction meaning
 Difference between Interpretation and Construction
o Interpretation
o Construction
 Classification of Statutes
o Codifying statutes
o Consolidating statutes
o Declaratory statutes
o Remedial statutes
o Enabling statutes
o Disabling statutes
o Penal statutes
o Taxing statutes
o Explanatory statutes
o Amending statutes
o Repealing statutes
o Curative or repealing statutes
 Rules of Interpretation
o Literal or Grammatical Rule
o The Mischief Rule
o The Golden Rule
o Five part analysis of the golden rule of interpretation  
o Applicability and usage of golden rule of interpretation
o The judicial criticism faced on the application of golden rule
o Case laws
o Harmonious Construction
 Conclusion

Introduction
One of the most substantial and the principal duty which are vested on the judiciary is the
interpretation of the statutes or law which are in force. When the courts deliver justice in a
legal dispute, they strictly abide with the boundaries framed by the legal frameworks which
encompasses certain laws, statutes, The Constitution and delegated legislations. The legal
framework of a democratic country like India includes a plethora of legislations and
regulations. The Legislature with the compliance of the procedural Parliamentary rules,
formulates and drafts certain written statutes and legislations. The courts deliver justice in a
legal matter by interpreting the underlying principles in these legislations. The written laws
are substantiated by the courts and justice is administered by the courts through the
pronouncement of verdict over the legal dispute. For the purpose of interpreting statues and
to prevent any wrongful interpretation of the laws, the court should follow certain rules to
shape these laws. So, one of the most basic rules of interpretation is the Literal rule of
Interpretation of statutes where the court interprets the wordings of the law as it is. However,
there may be certain loopholes which may be found in the law due to which it is not interpret
a straight-forward understanding of the language of the statutes. It may lead to ambiguity and
absurdity if the courts interpret the natural meaning of the language used in the statute.
Interpretation meaning
The term has been derived from the Latin term ‘interpretari’, which means to explain,
expound, understand, or to translate. Interpretation is the process of explaining, expounding
and translating any text or anything in written form. This basically involves an act of
discovering the true meaning of the language which has been used in the statute. Various
sources used are only limited to explore the written text and clarify what exactly has been
indicated by the words used in the written text or the statutes.

Interpretation of statutes is the correct understanding of the law. This process is commonly
adopted by the courts for determining the exact intention of the legislature. Because the
objective of the court is not only merely to read the law but is also to apply it in a meaningful
manner to suit from case to case. It is also used for ascertaining the actual connotation of any
Act or document with the actual intention of the legislature.

There can be mischief in the statute which is required to be cured, and this can be done by
applying various norms and theories of interpretation which might go against the literal
meaning at times. The purpose behind interpretation is to clarify the meaning of the words
used in the statutes which might not be that clear.

According to Salmond, “Interpretation”  is the process by which the court seeks to
ascertain the meaning of the legislature through the medium of authoritative forms in which it
is expressed.

Construction meaning
In simple words, construction is the process of drawing conclusions of the subjects which are
beyond the direct expression of the text. The courts draw findings after analysing the
meaning of the words used in the text or the statutes. This process is known as legal
exposition. There are a certain set of facts pending before the court and construction is the
application of the conclusion of these facts.

The objective is to assist the judicial body in determining the real intention of the legislature.
Its aim is also to ascertain the legal effect of the legal text.

Difference between Interpretation and

Construction
Interpretation
1. In law, interpretation refers to exposing the
true sense of the provisions of the statutes
and to understand the exact meaning of
the words used in any text.
2. Interpretation refers to the linguistic
meaning of the legal text.
Construction
1. Construction, on the other hand, refers
to drawing conclusions from the written
texts which are beyond the outright
expression of the legal text.
2. The purpose of construction is to
determine the legal effect of words and
 the written text of the statute.
3. In the case where the simple meaning of
3. In the case where the literal meaning of
the text is to be adopted then the concept
the legal text results in ambiguity then
of interpretation is being referred to.
the concept of construction is adopted.

Classification of Statutes
Codified statutory law can be categorized as follows-

Codifying statutes

The purpose of this kind of statute is to give an authoritative statement of the rules of the law
on a particular subject, which is customary laws. For example- The Hindu Marriage Act,
1955 and The Hindu Succession Act, 1956.

Consolidating statutes

This kind of statute covers and combines all law on a particular subject at one place which
was scattered and lying at different places. Here, the entire law is constituted in one place.
For example- Indian Penal Code or Code of Criminal Procedure.

Declaratory statutes

This kind of statute does an act of removing doubts, clarifying and improving the law based
on the interpretation given by the court, which might not be suitable from the point of view of
the parliament. For example- the definition of house property has been amended under the
Income Tax (Amendment) Act, 1985 through the judgement of the supreme court.

Remedial statutes

Granting of new remedies for enforcing one’s rights can be done through the remedial
statutes. The purpose of these kinds of statutes is to promote the general welfare for bringing
social reforms through the system. These statutes have liberal interpretation and thus, are not
interpreted through strict means. For example- The Maternity Benefits Act, 1961, The
Workmen’s Compensation Act, 1923 etc.

Enabling statutes

The purpose of this statute is to enlarge a particular common law. For example- Land
Acquisition Act enables the government to acquire the public property for the purpose of the
public, which is otherwise not permissible.
Disabling statutes

It is the opposite of what is provided under the enabling statute. Here the rights conferred by
common law are being cut down and are being restrained.

Penal statutes

The offences for various types of offences are provided through these statutes, and these
provisions have to be imposed strictly. For example- Indian Penal Code, 1860.

Taxing statutes

Tax is a form of revenue which is to be paid to the government. It can either be on income
that an individual earns or on any other transaction. A taxing statute thus, levies taxes on all
such transactions. There can be income tax, wealth tax, sales tax, gift tax, etc. Therefore, a
tax can be levied only when it has been specifically expressed and provided by any statute.

Explanatory statutes

The term explanatory itself indicates that this type of statute explains the law and rectifies
any omission left earlier in the enactment of the statutes. Further, ambiguities in the text are
also clarified and checked upon the previous statutes.

Amending statutes

The statutes which operate to make changes in the provisions of the enactment to change the
original law for making an improvement therein and for carrying out the provisions
effectively for which the original law was passed are referred to as amending statutes. For
example- Code of Criminal Procedure 1973 amended the code of 1898.

Repealing statutes

A repealing statute is one which terminates an earlier statute and may be done in the express
or explicit language of the statute. For example- Competition Act, 2002 repealed the MRTP
Act.

Curative or repealing statutes

Through these statutes, certain acts which would otherwise be illegal are validated by curing
the illegality and enables a particular line of action.
Rules of Interpretation
Literal or Grammatical Rule

It is the first rule of interpretation. According to this rule, the words used in this text are to be
given or interpreted in their natural or ordinary meaning. After the interpretation, if the
meaning is completely clear and unambiguous then the effect shall be given to a provision of
a statute regardless of what may be the consequences.

The basic rule is that whatever the intention legislature had while making any provision it has
been expressed through words and thus, are to be interpreted according to the rules of
grammar. It is the safest rule of interpretation of statutes because the intention of the
legislature is deduced from the words and the language used.

According to this rule, the only duty of the court is to give effect if the language of the statute
is plain and has no business to look into the consequences which might arise. The only
obligation of the court is to expound the law as it is and if any harsh consequences arise then
the remedy for it shall be sought and looked out by the legislature.

Case Laws

Maqbool Hussain v. State of Bombay,  In this case, the appellant, a citizen of India after
arriving at the airport did not declare that he was carrying gold with him. During his search
was carried on, gold was found in his possession as it was against the notification of the
government and was confiscated under section 167(8) of Sea Customs Act.  

Later on, he was also charged under section 8 of the Foreign Exchange Regulations Act,
1947.  The appellant challenged this trial to be violative under Article 20(2) of the Indian
Constitution. According to this article, no person shall be punished or prosecuted more than
once for the same offence. This is considered as double jeopardy.

It was held by the court that the Seas Act neither a court nor any judicial tribunal. Thus,
accordingly, he was not prosecuted earlier. Hence, his trial was held to be valid.

Manmohan Das versus Bishan Das, AIR 1967 SC 643

The issue in the case was regarding the interpretation of section 3(1)(c) of U.P Control of
Rent and Eviction Act, 1947. In this case, a tenant was liable for evidence if he has made
addition and alternate in the building without proper authority and unauthorized perception as
materially altered the accommodation or is likely to diminish its value.  The appellant stated
that only the constitution can be covered, which diminishes the value of the property and the
word ‘or’ should be read as land.

It was held that as per the rule of literal interpretation, the word ‘or’ should be given the
meaning that a prudent man understands the grounds of the event are alternative and not
combined.

State of Kerala v. Mathai Verghese and others, 1987 AIR 33 SCR(1) 317, in this case a
person was caught along with the counterfeit currency “dollars” and he was charged under
section 120B, 498A, 498C and 420  read with section 511 and 34 of Indian Penal Code for
possessing counterfeit currency. The accused contended before the court that a charge under
section 498A and 498B of Indian Penal Code can only be levied in the case of counterfeiting
of Indian currency notes and not in the case of counterfeiting of foreign currency notes. The
court held that the word currency notes or bank note cannot be prefixed. The person was held
liable to be charge-sheeted.

The Mischief Rule

Mischief Rule was originated in Heydon’s case in 1584. It is the rule of purposive
construction because the purpose of this statute is most important while applying this rule. It
is known as Heydon’s rule because it was given by Lord Poke in Heydon’s case in 1584. It is
called as mischief rule because the focus is on curing the mischief.

In the Heydon’s case, it was held that there are four things which have to be followed for true
and sure interpretation of all the statutes in general, which are as follows-

1. What was the common law before the making of an act.

2. What was the mischief for which the present statute was enacted.
3. What remedy did the Parliament sought or had resolved and appointed to cure the disease
of the commonwealth.
4. The true reason of the remedy.

The purpose of this rule is to suppress the mischief and advance the remedy.

Case laws

Smith v. Huges, 1960 WLR 830, in this case around the 1960s, the prostitutes were soliciting
in the streets of London and it was creating a huge problem in London. This was causing a
great problem in maintaining law and order. To prevent this problem, Street Offences Act,
1959 was enacted. After the enactment of this act, the prostitutes started soliciting from
windows and balconies.

Further, the prostitutes who were carrying on to solicit from the streets and balconies were
charged under section 1(1) of the said Act. But the prostitutes pleaded that they were not
solicited from the streets.

The court held that although they were not soliciting from the streets yet the mischief rule
must be applied to prevent the soliciting by prostitutes and shall look into this issue. Thus, by
applying this rule, the court held that the windows and balconies were taken to be an
extension of the word street and charge sheet was held to be correct.

Pyare Lal v. Ram Chandra, the accused in this case, was prosecuted for selling the sweeten
supari which was sweetened with the help of an artificial sweetener. He was prosecuted under
the Food Adulteration Act. It was contended by Pyare Lal that supari is not a food item. The
court held that the dictionary meaning is not always the correct meaning, thereby, the
mischief rule must be applicable, and the interpretation which advances the remedy shall be
taken into consideration. Therefore, the court held that the word ‘food’ is consumable by
mouth and orally. Thus, his prosecution was held to be valid.
Kanwar Singh v. Delhi Administration, AIR 1965 SC 871.

Issues of the case were as follows- section 418 of Delhi Corporation Act, 1902 authorised
the corporation to round up the cattle grazing on the government land. The MCD rounded up
the cattle belonging to Kanwar Singh. The words used in the statute authorised the
corporation to round up the abandoned cattle. It was contended by Kanwar Singh that the
word abandoned means the loss of ownership and those cattle which were round up belonged
to him and hence, was not abandoned. The court held that the mischief rule had to be applied
and the word abandoned must be interpreted to mean let loose or left unattended and even
the temporary loss of ownership would be covered as abandoned.

Regional Provident Fund Commissioner v. Sri Krishna Manufacturing Company, AIR

1962 SC 1526, Issue, in this Case, was that the respondent concerned was running a factory
where four units were for manufacturing. Out of these four units one was for paddy mill,
other three consisted of flour mill, saw mill and copper sheet units. The number of employees
there were more than 50. The RPFC applied the provisions of Employees Provident Fund
Act, 1952 thereby directing the factory to give the benefits to the employees.

The person concerned segregated the entire factory into four separate units wherein the
number of employees had fallen below 50, and he argued that the provisions were not
applicable to him because the number is more than 50 in each unit. It was held by the court
that the mischief rule has to be applied and all the four units must be taken to be one industry,
and therefore, the applicability of PFA was upheld.

The Golden Rule

It is known as the golden rule because it solves all the problems of interpretation. The rule
says that to start with we shall go by the literal rule, however, if the interpretation given
through the literal rule leads to some or any kind of ambiguity, injustice, inconvenience,
hardship, inequity, then in all such events the literal meaning shall be discarded and
interpretation shall be done in such a manner that the purpose of the legislation is fulfilled.

The literal rule follows the concept of interpreting the natural meaning of the words used in
the statute. But if interpreting natural meaning leads to any sought of repugnance, absurdity
or hardship, then the court must modify the meaning to the extent of injustice or absurdity
caused and no further to prevent the consequence.

This rule suggests that the consequences and effects of interpretation deserve a lot more
important because they are the clues of the true meaning of the words used by the legislature
and its intention. At times, while applying this rule, the interpretation done may entirely be
opposite of the literal rule, but it shall be justified because of the golden rule.  The
presumption here is that the legislature does not intend certain objects. Thus, any such
interpretation which leads to unintended objects shall be rejected.

Five part analysis of the golden rule of interpretation 

Whenever there is a shadow of scepticism casted on the grammatical construction of any law
then in such circumstances, the golden rule of interpretation can be applied on the law in
order to apply it to the facts in a legal dispute.  The external manifestation of the underlying
law which is interpreted from reading between the lines projects the true intent of the
legislature for which the golden rule is used. By taking into consideration the consequences
of the judgement, the judges have the discretion to interpret the law in a rational manner. The
analysis of Golden Rule can be divided into five categories as discussed below:

 WARBURTON’S CASE

Explaining the principle underlying the Golden rule, Justice Burton in the case of Warburton
v. Loveland observed that in the very first instance of application of law the grammatical
sense of the wordings of law must be paid heed. But if there is involvement of any absurdity,
inconsistency, or is against the declared purpose of the statute then in such circumstance, the
grammatical sense of the law can be modified or interpreted so far as there is no injustice
caused to the parties of the case. Even though the elementary rule of interpreting the words as
it is in their grammatical sense has been upheld by the courts in numerous cases like Madan
Lal v. Changdeo Sugar Mills, the courts should still be open to various interpretations of the
law so that no injustice is caused. This well-known rule was strictly formulated by Parke B.
in the case of Becke v. Smith wherein it was held that, the wordings of the law which are
unambiguous and plain nature should be construed in their regular sense even though, if in
their assessment it is absurd or promotes injustice. We assume the function of the legislature
when we deviate from the ordinary meaning of the statute due to which from the adherence to
its literal meaning we prevent the manifestation of injustice. 

 LORD WENSLEYDALE’S GOLDEN RULE

The term golden rule was coined by Lord Wensleydale which was later adopted in the case of
Gray v. Pearson due to which it is primarily called the Lord Wensleydale’s Golden Rule of
Interpretation. Lord Wensleydale expressing this opinion of the rule, mentioned that he is
deeply awestruck with the perception of the rule which is being universally accepted by the
courts all over the world in order to understand all the written laws, construing wills and
other written frameworks. He also mentioned that the ordinary derivative and the
grammatical construction of the law should be abided by in the first instance unless there is
any absurdity or repugnancy due to which it is necessary to modify the ordinary
understanding of the words. In the case of Matteson v. Hart the golden rule was elaborately
discussed by Jervis CJ where he relied on the Golden Rule of Construction in order to
understand the words used by the Legislature in the Acts and also to prevent any absurdity
and injustice which may stem from the intention of the statute. 

 HEYDON’S RULE OF MISCHIEF

In the Heydon’s Rule of Mischief, he elaborated that only in such circumstances where the
intention of the legislature appears to be unjust, only in such cases the intervention of the
office of judges in interpreting the law is reasonable. Slightly deviating from what Lord
Wensleydale has opined, instead of viewing the legislative intent as a whole and construe it
all-together, the reasons for the enactment of the laws in retrospect should be taken into
consideration so that we can derive the object it plans to subserve and the evil it plans to end.
In the case of Newspaper Ltd. v. State Industrial Tribunal, the Latin maxim “ex visceribus
actus” was cited which meant that while determining the intention of the legislation,
detached sections of parts of the Act should not be taken, instead the intention of the act as a
whole which construes the constituent parts should be considered. This principle was
reaffirmed in the case of Inland Revenue Commissioners. V. Herbert where Lord Haldane
interpreted a legislation which was newly enacted and he adjudged that “Where words of
general understanding are used, the common understanding of men is one main clue to the
meaning of legislature.” But the Golden Rule of Interpretation laid by Lord Wensleydale has
been a principle accepted worldwide.

 LITERAL GOLDEN MISCHIEF 

As described by Lord Granworth LC, this is a “Cardinal Rule ” which is a rule based on
common sense which is as strong as can be”. In the English cases, there are three basic rules
as elucidated by GW Paton. Those are:

1. Whatever the result, if the meaning of the wordings of law is plain then they should be
applied as per the Literal Rule. 
2. Unless there is any ambiguity or absurdity in the wordings of the law, the ordinary sense of
the law should be resorted to as per the Golden Rule. 
3.   The general policy or intention of the statute must be considered and eliminate the evil
which was directed as per the Mischief Rule.

 LATTER PART OF THE RULE

There is a lot of care which must be taken with regards to the later part of the Golden Rule
and in the case of Christopher v. Lotinga, every word of the Golden Rule was subscribed to
by Justice Willes. In the case of Woodward v. Watts, Justice Crompton expressed his doubts
regarding this rule and opined that the Legislature must have enacted the legislation with a
particular intent which may be destroyed if the courts reinterpret it due to some absurdity
which defeats the whole purpose of the enactment. To understand the applicability of the
three methods of judicial approach which is the literal rule, the golden rule and the mischief
that the statute is designed for in order to prevent it, the case of Vacher v. London Society of
Compositors can be referred to. In this case, the validity of Section 4(1) of the Trade Disputes
Act, 1906 was in question as to whether any torturous acts which are committed by the trade
unions are included under the protection or is it only such are which was torturous in nature
in furtherance of any trade dispute. Deciding on the former view, the House of Lords relied
on the aforementioned three judicial approaches in which Lord Macnaughten adopted the
golden rule of interpretation which is derived from the case of Grey v. Pearson, while Lord
Atkinson espoused the literal approach which is derived from the case of Cooke v. Charles A
Vageler and lastly, the history of the enactment of the stature and the application the mischief
method has been relied upon by Lord Moulton.

Applicability and usage of golden rule of interpretation

If there is a choice between two interpretations, then the interpretation which reduces the
futility or which is narrower in nature fails to incorporate the purpose of the legislation due to
which such a construction must be avoided as discussed in the case of Nokes v. Doncaster
Amalgamated Collieries Ltd by Viscount Simon L.C. Instead, we should admit the bolder
form of the construction which is the intention of the Parliament to enact the legislation only
for the purpose of making the result effective. The transfer of an undertaking which includes,
property, duties, liabilities and rights from the old company to a new company is dealt with
under Section 154 of the Companies Act, 1929. In the case of Luke v. R.R.C. an issue was
raised with regards to the transfer of contract of service existing between the former company
and the individual. The House of Lords adjudged that the notice of amalgamation should be
provided to the individual. The golden rule of interpretation has been used in this case where
if the prima facie meaning of the words would be taken into consideration, then no consent
would be required of the employee during amalgamation, but this would lead to injustice. But
in the present case the court deviated from the wordings of the law and decided that it is the
duty of the transferor company to inform the workers about the amalgamation. 

A restricted Construction was adopted by the legislature while drafting the Central Services
(Classification, Appeal And Control) Rules, 1956 specifically Rule 11(VI) due to which it
was interpreted by the court by using the Golden Rule in the case of Nyadar Singh v. Union
of India. This provision imposes a penalty if there is any reduction in the grade post or
service or the pay scale of the employee. It was adjudged by the Supreme Court that if any
person is appointed to a bigger post or pay grade, then he cannot be abridged to a lower pay
grade or post due to which this provision acquired a wider construction as interpreted by the
Court. As per Maxwell, the applicability of Golden Rule is significant in the area which is
dedicated to the construction of legislations to adjudge consequences and also the
construction of certain provisions which eliminate injustice and inconvenience or also
evasion. 

To explain the applicability of the Golden rule, the case of Free Lanka Insurance Co. Ltd. v.
Panasinghe can be referred where it was held that if a prisoner escapes from prison due to
fire accident, then he did not commit a felony under the Statute as this act committed by him
was not with the intention of getting freedom but it is to save his life. Similarly, if there is any
act which is done on certain justifiable grounds then that act would not qualify as criminal in
nature.

The Supreme Court and High Court in India have applied the Golden Construction of Statutes
in various judgements as previously discussed. But there is a certain confusion which is
observed between the Golden rule and the Literal Rule as even though initially the literal
meaning of the statute is taken into consideration if it is plain and logical but if there is any
trace of absurdity or uncertainty then the interpretation of the court would pay a significant
role. But if there is a possibility that there is more than one meaning of the wording in the
statute, then any addition, substitution or rejection should be done by the court modifying the
language so that the intention of the legislature is expounded. Some of the landmark Indian
cases in which the Golden Rule was used was with respect to the interpretation of the
provisions like “Section 23 of the Representation of People’s Act, 1951” and Section 3A of
the U.P. Sales Tax Act, 1948 which were dealt with in Narendra Kiadivalapa v. Manikrao
Patil and Annapurna Biscuit Manufacturing Co. v. Commissioner of Sales Tax, U P
respectively. Therefore, the applicability of the Golden Rule of Interpretation in the Indian
cases and the foreign cases has a narrow and wide approach which needs to be observed by
the courts in their working. 

The judicial criticism faced on the application of golden rule

The golden rule of interpretation should be adopted with caution because of certain reasons
which were discussed by the Court in the case of Lord Moulten in Vacher & Sons v. London
Society of Compositor. There is a possibility that this rule could develop into a conventional
jurisdictive critique of the legislature’s acts’ legality. The statutes must be interpreted on the
basis of the wordings of the law, and while the respective resultants of two competing
interpretations may occasionally direct us in our options, we can only do so if we are in a
position to convince ourselves that the words could not have been used as per the sense of the
suggested arguments by looking at the Act as a whole and comparing it to the prevailing law
of the land at the time of the enactment of the legislation. The legal rights or laws which are
formulated for the advantage of the community at large may come in struggle with the
individual interest of the public due to which it may cause injustice in the form of repugnancy
or absurdity. The Apex Court in the case of State Bank of India v. Shri N. Sundara Money has
judged that the duty of the courts of justice is to take care of the rights of the public at large
instead of individual rights. If the words of the statute are absurd in their nature, then they
should even come under the term of repugnancy in order to use the Golden Rule due to which
the scope of the term is wide. 

The Golden Rule is considered to be an old law which has been used since the 16th century,
when British law was the fundamental basis for law and parliamentary sovereignty had not
yet been constituted. It is contended that it gives the unelected judiciary too much jurisdiction
and responsibility, which is undemocratic in nature. The Golden Rule also clearly violates the
law of the land by constructing a crime after the occurrence of the events, as observed in in
Smith v Hughes and Elliot v Grey. It encroaches on the separation of powers by assigning
judges a legislative role, and judges can bring their own opinions, conscience, and
preconceptions to a matter, as seen in the case of DPP v Bull and Smith v Hughes.

Case laws

Tirath Singh v. Bachittar Singh, AIR 1955 SC 850

In this case, there was an issue with regard to issuing of the notice under section 99 of
Representation of People’s Act, 1951, with regard to corrupt practices involved in the
election.

According to the rule, the notice shall be issued to all those persons who are a party to the
election petition and at the same time to those who are not a party to it. Tirath Singh
contended that no such notice was issued to him under the said provision. The notices were
only issued to those who were non-parties to the election petition. This was challenged to be
invalid on this particular ground.

The court held that what is contemplated is giving of the information and the information
even if it is given twice remains the same. The party to the petition is already having the
notice regarding the petition, therefore, section 99 shall be so interpreted by applying the
golden rule that notice is required against non-parties only.

State of Madhya Pradesh v. Azad Bharat Financial Company, AIR 1967 SC 276, Issues of
the case are as follows.

A transporting company was carrying a parcel of apples was challenged and charge-sheeted.
The truck of the transporting company was impounded as the parcel contained opium along
with the apples. At the same time, the invoice shown for the transport consisted of apples
only.

Section 11 of the opium act 1878, all the vehicles which transport the contraband articles
shall be impounded and articles shall be confiscated. It was confiscated by the transport
company that they were unaware of the fact that opium was loaded along with the apples in
the truck.
The court held that although the words contained in section 11 of the said act provided that
the vehicle shall be confiscated but by applying the literal rule of interpretation for this
provision it is leading to injustice and inequity and therefore, this interpretation shall be
avoided. The words ‘shall be confiscated’ should be interpreted as ‘may be confiscated’.

State of Punjab v. Quiser Jehan Begum, AIR 1963 SC 1604, a period of limitation was
prescribed for, under section 18 of land acquisition act, 1844, that an appeal shall be filed for
the announcement of the award within 6 months of the announcement of the compensation.
Award was passed in the name of Quiser Jehan. It was intimated to her after the period of six
months about this by her counsel. The appeal was filed beyond the period of six months. The
appeal was rejected by the lower courts.

It was held by the court that the period of six months shall be counted from the time when
Quiser Jehan had the knowledge because the interpretation was leading to absurdity. The
court by applying the golden rule allowed the appeal.

Harmonious Construction

According to this rule of interpretation, when two or more provisions of the same statute
are repugnant to each other, then in such a situation the court, if possible, will try to construe
the provisions in such a manner as to give effect to both the provisions by maintaining
harmony between the two. The question that the two provisions of the same statute are
overlapping or mutually exclusive may be difficult to determine.

The legislature clarifies its intention through the words used in the provision of the statute.
So, here the basic principle of harmonious construction is that the legislature could not have
tried to contradict itself. In the cases of interpretation of the Constitution, the rule of
harmonious construction is applied many times.

It can be assumed that if the legislature has intended to give something by one, it would not
intend to take it away with the other hand as both the provisions have been framed by the
legislature and absorbed the equal force of law. One provision of the same act cannot make
the other provision useless. Thus, in no circumstances, the legislature can be expected to
contradict itself.

Cases –

Ishwari Khaitan Sugar Mills v. State of Uttar Pradesh,  in this case, the State Government
proposed to acquire sugar industries under U.P Sugar Undertakings (Acquisition) Act,  1971.
This was challenged on the ground that these sugar industries were declared to be a
controlled one by the union under Industries (Development and Regulation) Act, 1951. And
accordingly, the state did not have the power of acquisition of requisition of property which
was under the control of the union. The Supreme Court held that the power of acquisition was
not occupied by Industries (Development and Regulation) Act, 1951. The state had a
separate power under Entry 42 List III.

M.S.M Sharma v. Krishna Sinha, AIR 1959 SC 395.

Facts of the case are as follows- Article 19(1)(a) of the Constitution provides for freedom of
speech and expression. Article 194(3) provides to the Parliament for punishing for its
contempt and it is known as the Parliamentary Privilege. In this case, an editor of a
newspaper published the word -for- word record of the proceedings of the Parliament
including those portions which were expunged from the record. He was called for the breach
of parliamentary privilege.

He contended that he had a fundamental right to speech and expression. It was held by the
court that article 19(1)(a) itself talks about reasonable freedom and therefore freedom of
speech and expression shall pertain only to those portions which have not been expunged on
the record but not beyond that.

Conclusion
Every nation has its own judicial system, the purpose of which to grant justice to all. The
court aims to interpret the law in such a manner that every citizen is ensured justice to all. To
ensure justice to all the concept of canons of interpretation was expounded. These are the
rules which are evolved for determining the real intention of the legislature.

It is not necessary that the words used in a statute are always clear, explicit and unambiguous
and thus, in such cases it is very essential for courts to determine a clear and explicit meaning
of the words or phrases used by the legislature and at the same time remove all the doubts if
any. Hence, all the rules mentioned in the article are important for providing justice.

Interpretation of Taxing Statutes

I. INTRODUCTION :

We, the people of India resolved to constitute India into a SOVEREIGN SOCIALIST
SECULAR DEMOCRATIC REPUBLIC in order to secure to all our citizens: Justice, social,
economic and political; Liberty of thought, expression, belief, faith and worship; Equality of
status and of opportunity; and to promote among all of us Fraternity, assuring the dignity of
the individual and the unity and integrity of the Nation.

THE THREE ORGANS

To govern is the duty of the Executive, headed by the President. To legislate is the duty of the
Parliament and State Legislatures. It is for the judiciary to keep a watch, visit and see that the
freedom enshrined in the Constitution reach to every citizen and is not jeopardized or
tinkered with or obstructed by the executive or any person in authority or otherwise.

THE INDIAN LEGAL SYSTEM

The Indian legal system is the product of history. It is rooted in our soil; nurtured and
nourished by our culture, languages and traditions; fostered and sharpened by our genius and
quest for social justice; reinforced by history and heritage inspired and strengthened by
English Law guided and enriched by concepts and precepts of justice, equity and good
conscience which are indeed the hallmarks of the common law.

TAXATION
Article 265 of the Constitution mandates that no tax shall be levied or-collected except by the
authority of law. It provides that not only levy but also the collection of a tax must be under
the authority of some law.

THE TAX LAWS

Tax laws are highly complex, complicated and beyond understanding of a tax-payer. The
words and expressions used are not simple. Many sections contain sub-sections, clauses, sub-
clauses. Many deeming provisions have been inserted. Meaning of an expression is extended
by way of Explanation and is curtailed by way of proviso, sometimes more than one provisos
and explanations meaning differently.

Meaning of Interpretation and Construction of Statute:

According to Salmond interpretation or construction means "the process by which the courts
seek to ascertain the meaning of the legislature through the medium of authoritative forms in
which it is expressed."

Bhatia International v/s. Bulk Trading S.A. - [(2002) 4 SCC 105]

There are three bodies which divide government power namely legislature, the executive and
the judiciary. It is for the legislature to make laws. It is executive to execute these laws and
the function of court is to interpret them. Interpretation of statutes to render justice is primary
function of the judiciary. The main body of the law is to be found in statutes, together with
the relevant statutory instruments and in case law as enunciated by Judges in the Courts. But
the Judges not only have the duty of declaring the law, they are also frequently called upon to
settle disputes as to the meaning of words or clauses in a statute. The courts have to interpret
the laws and not enact them. The primary function of the courts while interpreting or
construing a statute is to see the intention of the legislature. Judiciary is duty bound to act
upon the true intention of the legislature. The maxim “Judicis estjus dicere, non dare’’ pithily
expounds the duty of the Court. It is to decide what the law is and apply it, not to make. [
ACIT v. Velliappa Textiles Ltd. (2003) 263 ITR 550 (SC)]

Statutes are normally drafted by legal experts who are experts in the particular branch of law
of which the statute was to be a part. Although such persons are skilled in the law, due to the
volume of legislation the statutes are often obscure and cryptic and we find courts and
lawyers are busy in unfolding the meaning of ambiguous words and expressions in a statute.
The age old process of application of the enacted law has led to formulation of certain rules
of interpretation or construction.

The Income tax Act is a self contained code, and provides machinery for imposing and
collecting tax, obtaining reliefs and appeals against improper orders etc. While tax law is a
part of of the general law, it has got its own distinct features. There are some special
provisions which are attracted while interpreting tax laws.

The need of interpretation arises only when the words used in the statute are on their own
term, ambivalent and do not manifest the intention of legislature.[Keshavji Ravji & Co. v/s.
CIT – [(1990) 183 ITR 1 (SC)].
Similarly rule of interpretation would come into play only if there is doubt with regard to the
express language used. [Pandian Chemicals Ltd. v/s. CIT – [(2003) 262 ITR 278 (SC)].

II. BASIC PRINCIPLES / RULES OF INTERPRETATION of TAXING STATUTE:

I will deal with the special rules of construction governing a taxing statute.

1. Intention of Legislature:

The dominant purpose of construction of any statutory provision is to ascertain the intention
of the legislature and the primary role is to ascertain the same by reference to the language
used. The Supreme Court in Doypack Systems Pvt. Ltd. v/s. UOI [1998 (2) SCC 299] laid
down:

"It has to be reiterated that the object of interpretation of a statute is to discover the intention
of Parliament as expressed in the Act. The dominant purpose in construing a statute is to
ascertain the intention of the legislature as expressed in the statute, considering it as a whole
and in its context that intention, and therefore, the meaning of the statute, is primarily to be
sought in the words used in the statute itself, which must, if they are plain and unambiguous
be applied as they stand". The object of all interpretation is to discover the intention of
Parliament, but the intention of Parliament must be deduced from the language used."

A statute is an edict of the legislature and the conventional way of interpreting or construing a
statute is to seek the ₹intention' of its maker. A statute is to be construed according "to the
intent of them that make it" and "the duty of judicature is to act upon the true intention of the
legislature - "the mens or sententia legis". If a statutory provision is open to more than one
interpretation the court has to choose that interpretation which represents the true intention of
the legislature, which is also referred to as the ₹legal meaning' of the statutory provision.

The intention of the legislature assimilates two aspects :

(1) In one aspect it carries the concept of ₹meaning', i.e. what the words mean.

(2) In another aspect, it conveys the concept of ₹purpose and object' or the ₹reason and spirit'
pervading through the statute.

Therefore the process of construction combines both literal and functional approaches. In the
case of GEM Granites v. CIT (2004) 271 ITR 322 (SC) the Hon’ble court observed that
what one may believe or think to be the intention of Parliament cannot prevail if the language
of the statute does not support that view, thus object of the statute has to be gathered from
language and not on what one believes or thinks.

2. H armonious Interpretation:

The most common rule of interpretation is that every part of the statute must be understood in
a harmonious manner by reading and construing every part of it together. Further, L.J.
Denning in Seaford Court Estates vs. Asher [1949] 2 All ER 155 speaks as hereunder:

“A Judge must not alter the material of which the Act is woven but he can and should iron
out the creases. 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 the
Parliament and then he must supplement the written words so as to give force and life to the
intention of the Legislature.”

Also referred in Nasiruddin v/s. Sita Ram Agarwal – [(2003) 2 SCC 577]

The art of correct interpretation would depend on the ability to read what is stated in plain
language, read between the lines, read ‘through’ the provision, examining the intent of the
Legislature and call upon case laws and other aids to interpretation.

Rules of interpretation are applied only to resolve the ambiguities. The object and purpose of
interpretation is to ascertain the mens legis, i.e., the intention of the law, as evinced in the
statute. The key to the opening of every law is the reason and spirit of law. To be literal in
meaning is to see the body and miss the soul. The judicial key to interpretation is the
composite perception of the Deha (body) and the Dehi (Soul) of the provision.

Wherever it is possible to do so, the provision must be harmoniously constructed by avoiding

a conflict. A construction which reduces the statute to a futility has to be avoided. A statute or
any enabling provision therein must be so construed as to make it effective and operative on
the principle expressed in maxim “UT RES MAGIS VALEAT QUAM PAREAT” i.e. a liberal
construction should be put upon written instruments, so as to uphold them, if possible and
carry in to effect the intention of the parties. CIT v. Hindustan Bulk Carrier (2003) 259 ITR
449 (SC)

The provisions of two enactments must be read harmoniously so as not to subject them to any
strained construction giving rise to an artificial inconsistency or repugnance.
Sankaranarayanan Bhattathirpad v/s. ITO – [(1985) 153 ITR 562, 567 – 68 (Ker)]

Every clause of a statute should be construed with reference to the context and other clauses
of the statute so as, as far as possible, to make a consistent enactment of the whole statute
CIT v/s. R. M. Amin – [(1971) 82 ITR 194 (Guj)]

Parliament is normally presumed to legislate in the knowledge of, and having regard to,
relevant judicial decisions. If, therefore, Parliament has a subsequent opportunity to alter the
effect of a decision on the legal meaning of an enactment, but refrains from doing so, the
implication is that Parliament approves of that decision and adopts it. That was amply
demonstrated by the amendment of Sec. 36 (1) (viii) made in 1985. CIT v/s. West Bengal
Industrial Development Corporation Ltd. – [(1993) 203 ITR 422, 430 (Cal)].

3 . Literal rule : Language of Statute should be read as it is :

The first and the most elementary rule of construction is that it is to be assumed that the
words and phrases of legislation are used in their technical meaning if they have acquired
one, or otherwise in their ordinary meaning, and the second is that the phrases and sentences
are to be construed according to the rules of grammar. Krishi Utpadan Mandi Samiti v. UOI
(2004) 267 ITR 460 (All.) .

Pure, simple and grammatical sense of language used by Legislature is best way of
understanding as to what Legislature intended. Coal Mines Officers’ Association of India v.
UOI (2004) 266 ITR 429 (Cal.).
If the language of the statute is clear and unambiguous, words must be understood in their
plain meaning. The wordings of the Act must be construed according to its literal and
grammatical meaning, whatever the result may be.

While interpreting tax statute, the function of the court of law is not to give words in the
statute a strained and unnatural meaning to cover and extent its applicability to the areas not
intended to be covered under the said statute. Vidarbha Irrigation Dev. Corpn. v/s ACIT
[(2005) 278 ITR 521 (Bom)].

It is not permissible to construe any provision of a statute, much less a taxing provision, by
reading into it more words than its contains. CIT v/s. Vadilal Lallubhai [(1972) 86 ITR 2
(SC)]

Literal construction means that there is no room for any intendment. Nothing is to be read in,
nothing is to be implied. One can only look fairly at the language used.

ICAI vs. Price Waterhouse, (1997) 90 Comp. Case 113, 140, 141 (SC)

State of West Bengal vs. Scene Seven P. Ltd. AIR 2000 SC 3089, 3094

Harbajan Singh vs. Press Council of India (2002) 3 SCC 722, 727.

District Registrar and Collector v. Canara Bank, (2005) 1 SCC 496.

4. The Mischief Rule of Interpretation (Heyden’s rule)

A statute is to be construed so as to suppress the mischief in the law and advance the remedy.
This was set out in Heydon’s case (1584) 3 Co. Rep. 7a. Under this rule the judge will look at
the Act to see what was its purpose and what mischief in the common law it was designed to
prevent.

Broadly speaking, the rule means that where a statute has been passed to remedy a weakness
in the law, the interpretation which will correct that weakness is the one to be adopted. This
rule is also one of the cardinal rules of interpretation when the words of a taxing statute are
ambiguous and incapable of a literal interpretation and generally takes into account four
parameters, namely

i) What was the Law prior to enactment of the statute in question;

ii) What was the defect or mischief for which the earlier law did not provide;

iii) What remedy had the Legislature intended to remedy the defect;

iv) The true Legislative intent behind the remedy.

This rule would come into play only if the words of the taxing statute were silent or
ambiguous on an issue and the General Clauses Act also did not throw light on the
interpretation

CIT vs. Shahzada Nand & Sons. (1966 ) 60 ITR 392 (SC)
Classic Builders & Developers vs. UOI (2001) 251 ITR 492, 497 (MP)

Reckitt Colman of India Ltd. vs. ACIT (2001) 252 ITR 550 (Cal.).

5) The Golden Rule : Purposive interpretation

This rule is to some extent an extension of the literal rule and Mischief Rule and under it the
words of a statute will as far as possible be construed according to their ordinary, plain, and
natural meaning, unless this leads to an absurd result. It is used by the courts where a
statutory provision is capable of more than one literal meaning and leads the judge to select
the one which avoids absurdity, or where a study of the statute as a whole reveals that the
conclusion reached by applying the literal rule is contrary to the intention of Parliament. One
of the principle laid down by the courts is that regard should be given to the object and
purpose of the introduction of a particular provision in the Income-tax Act. It emerges that
this rule of interpretation has been often applied in India.

The object and the rules of Interpretation being what they are it is only natural that the rules
of interpretation should not be static but dynamic. Rules of interpretation are not the rules of
law and have to evolve constantly to ensure that they lie in sync with the march of the
society. It is in this context that the Supreme Court in Kehar Singh vs. State (A.I.R. 1988
Supreme Court 1883) gave a go-by to the golden rule by which statutes were to be interpreted
according to the grammatical and ordinary sense of the word.

The Golden rule implies that if a strict interpretation of a statute would lead to an absurd
result then the meaning of the words should be so construed so as to lead to the avoidance of
such absurdity. A further corollary to this rule is that in case there are multiple constructions
to effect the Golden rule the one which favours the assessee should always be taken. This rule
is also known as the Rule of Reasonable Construction. However the application of this rule in
the interpretation of taxing statutes is rather limited since the literal rule is more often
applicable and it is oft remarked that equity and taxation are strangers.

A construction which would defeat the very object of the legislature should be avoided.

Keshavji Ravji & Co. vs. CIT (1990) 183 ITR 1 (SC)

CIT vs. Gwalior Rayon Silk Mfg. Co. Ltd. (1992) 196 ITR 149 (SC)

Vikrant Tyres Ltd vs. ITO (2001) 247 ITR 821, 826 (SC)

6) Strict construction :

A tax is imposed for public purpose for raising general revenue of the state. A taxing statute
is to be strictly construed. Lord Hasbury and Lord Simonds stated : "The subject is not to be
taxed without clear words for that purpose; and also that every Act of Parliament must be
read according to the natural construction of its words."

It is settled law that a taxation statute in particular has to be strictly construed and there is no
equity in a taxing provision. H.H. Lakshmi Bai v/s. CIT - [(1994) 206 ITR 688, 691 (SC)].

“The subject is not to be taxed without clear words for that purpose …..”
CIT vs. Provident Inv. Co. Ltd. (1954) 32 ITR 190 (SC)

J.K. Steel Ltd. vs. UOI AIR 1970 SC 1173

CIT vs. Indo Oceanic Shipping Co. Ltd. (2001) 247 ITR 247 (Bom)

Hansraj & Sons vs. State of J & K (2002) 6 SCC 227, 237-39

In A.V. Fernandez v/s. State if Kerala, [AIR 1957 SC 657] His Lordship Bhagwati J. has
stated the principle of taxing laws 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 Associated Cement Co. Ltd. Vs. Commercial Tax Officer AIR 1981 SC 1887, E.S.
Venkataramiah J. of the Supreme Court, speaking for the majority said

"Tax, interest and penalty are three different concepts. Tax becomes payable by an assessee
by virtue of the charging provision in a taxing statute. Penalty ordinarily becomes payable
when it is found that an assessee has wilfully violated any of the provisions of the taxing
statute. Interest is ordinarily claimed from an assessee who has withheld payment of any tax
payable by him and it is always calculated at the prescribed rate on the basis of the actual
amount of tax withheld and the extent of delay in paying it. It may not to be wrong to say that
such interest is compensatory in character and not penal."

Remedial statutes are known as welfare, beneficial or social justice oriented legislations.
Penal statutes, on the other hand, are those which provide for penalties for contravention of
the law and are directed against the offender in relation to the state by making him liable to
imprisonment, fine, forfeiture or other penalty.

A remedial statute receives a liberal construction, whereas a penal statute is strictly

construed. In case of remedial statutes the doubt is resolved in favour of the class of persons
for whose benefit the statute is enacted; whereas in case of penal statutes the doubt is
resolved in favour of the alleged offender.

The principle applied in constructing a penal act is that if, in construing the relevant
provisions, “there appears any reasonable doubt or ambiguity”, it will be resolved in favour
of the person who would be liable to the penalty. If there are two reasonable constructions we
must give the more lenient one. The court must always see that the person to be penalised
comes fairly and squarely within the plain words of the enactment. It is not enough that what
he has done comes substantially within the mischief aimed at by the statute.

A penal provision has to be construed strictly. ACIT v. Velliappa Textiles Ltd. (2003) 263 ITR
550 (SC)

7) Ejusdem generis rule :

Under this rule where general words follow particular words the general words are construed
as being limited to persons or things within the class outlined by particular words. The words
used together should be understood as deriving colour and sense from each other. They
should be read together as one.

The true scope of the rule of ‘ejusdem generis’ is that the words of general nature following
specific and particular words should be construed as limited to things which are of the same
nature as those specified. When the particular words pertaining to a class, category or genus
are followed by general words, the general words are construed as limited to the things of the
same kind as those specified. The phrase “any other person” in rule 6D(2) of the Income-tax
Rules, 1962, would draw its colour from the preceding word, namely, “employee”. Held
accordingly, that a trustee was not an employee or not akin to an employee and the amounts
paid to trustees by the trust could not be disallowed under rule 6D(2). CIT v. Shivalik Drug
(Family Trust) (2008) 300 ITR 339 (All.)

The rule of ejusdem generis is to be applied “with caution” and “not pushed too far”. It may
not be interpreted too narrowly or unnecessarily if broad based genus could be found so as to
avoid cutting down words to dwarf size.

— U.P. State Electricity Board vs. Hari Shanker Jain AIR 1979 SC 65

— Rohit Pulp & Paper Mills Ltd. vs. Collector of Central Excise AIR 1991 SC 754

8) Expressio unius est exclusio alterius:

The expression of the thing implies the exclusion of another. It conveys an important rule of
interpretation to signify the circumstances where the express mention of one person or thing
results in totality the exclusion of another. In other words, in any particular provision where
the statutory language is plain or straight and its meaning is apparently clear, there is no
scope of applying the rule. However, this maxim could be accepted as a valuable servant but
it is definitely a dangerous master in the construction of statutes and documents. It is used
when there is imperfect enactment of statutory language.

Coming corollary to this maxim is expressum facit cessare facitum which states that when
there is express mention of certain things, then anything not mentioned is excluded.

III. AIDS TO CONSTRUCTION OF STATUTE :

A. INTERNAL AID TO CONSTRUCTION OF STATUE

1. Long title

It is now settled that the long title of an Act is a part of the Act and is admissible as an aid to
its construction. A long title of a Legislation may not control, circumscribe or widen the
scope of the legislation, if the provisions thereof are otherwise clear and unambiguous, but if
the terms of the legislation are capable of both a wider and a narrower construction, that
construction which would be in tune with the avowed object manifested in the preamble or
declared in the long title, ought to be accepted. The title although a part of the Act is in itself
not an enacting provision and though useful in case of ambiguity of the enacting provisions is
ineffective to control their clear meaning. [Manoharlal v/s. State of Punjab AIR 1961 SC
418]; [Urmila Bala Dasi vs. Probodh Chandra Ghosh (1990) 184 ITR 604 (Cal)].

2. Marginal notes and headings

The courts have held that ₹Headings’, ₹Marginal Notes’ and ₹Marginal Headings’ can be
referred to while interpreting the particular provision of the act. It has been held by Courts
that Headings etc. do not decide the construction of the section, but Headings etc. are
indicative of the meaning and purpose of the section.

“The marginal note to a section cannot be referred to for the purpose of construing the section
but it can certainly be relied upon as indicating the drift of the section or to show what the
section is dealing with. It cannot control the interpretation of the words of a section,
particularly when the language of the section is clear and unambiguous but, being part of the
statute, it prima facie furnishes some clue as to the meaning and purpose of the section.”
[K.P. Varghese vs. ITO 131 ITR 597 (SC)].

“Marginal notes are not decisive in interpreting a substantive provision of law, but, in case of
doubt, they can be relied upon as one of the aids for construction.” R.B. Shreeram Religious
& Charitable Trust vs. CIT (1988) 172 ITR 373 (Bom)]

“The marginal note for section 44F reads “Avoidance of tax by sales-cum-dividend”. This
marginal note also gives an indication as to what exactly was the mischief that was intended
to be remedied. The legislature was evidently trying to circumvent the devices adopted by
some of the assessees to convert their revenue receipts into capital receipts. The marginal
note also throws light on the intention of the legislature”. CIT v. Vadilal Lallubhai 86 ITR 2
(SC) 11

3. Punctuation

Punctuation marks cannot control, vary or modify the plain and simple meaning of the
language of the statute. At the most they can aid in the construction of ambiguous statutes.

“There are three activities serially set out in that sub-clause, namely, construction,
manufacture or production. A comma is, therefore, legitimately and as per the rules of
grammar, required after the first activity to separate it from the second activity of
manufacture. Since the second activity is followed by the word “or”, no comma is required
after the second activity to separate it from the third activity. Therefore, punctuation is put as
grammatically required. It does not disclose any intention of providing for a separate kind of
business altogether. Punctuation, in any case, is a minor element in the construction of a
statute. Only when a statute is carefully punctuated and there is no doubt about its meaning
can weight be given to punctuation. It cannot, however, be regarded as a controlling element
for determining the meaning of a statute.” [Hindustan Construction vs. CIT (1994) 208 ITR
291 (Bom)].

4. Non-obstante clauses

The expression ‘’ non obstante “ means notwithstanding. Ordinarily, it is a legislative device

to give such a clause an overriding effect over the law or provision that qualifies such clause.
When a clause begins with “notwithstanding anything contained in the Act or in some
particular provision/provisions in the Act”, it is with a view to give the enacting part of the
section, in case of conflict, an overriding effect over the Act or provision mentioned in the
non obstante clause. It conveys that in spite of the provisions or the Act mentioned in the non
obstante clause, the enactment following such expression shall have full operation. It is used
to override the mentioned law/provision in specified circumstances.

“A non-obstante clause is usually used in a provision to indicate that the provision should
prevail despite anything to the contrary in the provision mentioned in such non-obstante
clause. In case there is any inconsistency or a departure between the non-obstante clause and
another provision, one of the objects of such a clause is to indicate that it is the non-obstante
clause which would prevail over the other clause.” [Parasuramaiah vs. Lakshamma AIR
1965 AP 220]

It is fairly common in different enactments to use the expression ‘notwithstanding anything

contained in this Act or other Acts’ in order to make such provision as superseding to the
other provisions.’ The Supreme Court in Maharashtra Tubes Ltd. vs. State Industrial and
Investment Corporation of Maharashtra Ltd. (1993) 78 Comp Case 803 has held in no
uncertain terms that where two statutes contain similar non obstante clauses, it is the latter
which is to prevail over the former, for, the Legislature is supposed to be aware of the fact
that the statute already in force contains a non obstante clause but still incorporates such non
obstante clause in order to obliterate the effect of the non obstante clause contained in the
former statute.

5. Definition clause and undefined words

(a) Judicially defined words

“It has long been a well-established principle to be applied in the construction of an Act of
Parliament that where a word of doubtful meaning has received a clear judicial interpretation,
the subsequent statute which incorporates the same word or the same phrase in a similar
context, must be construed so that the word or phrase is interpreted according to the meaning
that has previously been assigned to it.” [Barras vs. Aberdeen Steam Trawling and Fishing
Co. Ltd. (1933) AC 402 (HL)]

“Interpretation of a provision in a taxing statute rendered years back and accepted and acted
upon by the department should not be easily departed from.” [CIT vs. Balkrishna Malhotra
(1971) 81 ITR 759 (SC)]

b) Definitions in other statute :

When a particular expression is clearly defined, the court has no alternative but to give the
meaning to expression as defined in the statute.

Shaw Wallace & Co. Ltd. v. UOI (2004) 267 ITR 248 (Cal.)(High Court)

The word “means” can only have one meaning that is, it is an exclusive definition: P.
Kasilingam vs. P. S .G. College of Technology 1995 Supp. 2 SCC 348. In Krishi Utpadan
Mandi Samiti vs. Shankar Industries 1993 Supp. 3 SCC 361 (II), question arose for inter-
pretation about the definition of “Agricultural Produce”. The Supreme Court observed at
Page 364 as
follows :—

“It is a well settled rule of interpretation that where the Legislature uses the words “means”
and “includes” such definition is to be given a wider meaning and is not exhaustive or
restricted to the items contained or included in such definition. Thus the meaning of
“agricultural produce” in the above definition is not restricted to any products of agriculture
as specified in the Schedule but also includes such items which come into being a processed
form and further includes such items which are called as gur, rab, shakkar, khandsari and
jaggery.”

Similarly in CIT v. Raja Benoy Kumar Sahas Roy 32 ITR 466 (SC) 476 observed as under:

“Whether the narrower or the wider sense of the term “agriculture” should be adopted in a
particular case depends not only upon the provisions of the various statutes in which the same
occurs but also upon the facts and circumstances of each case. The definition of the term in
one statute does not afford a guide to the construction of the same term in another statute and
the sense in which the term has been understood in the several statutes does not necessarily
throw any light on the manner in which the term should be understood generally”.

6. Schedule

The Schedules appended to a statute form part of it. They are generally added to avoid
encumbering the statute with matters of excessive details, guidelines to work out the policy of
the statute, transitory provisions, rules and forms which need frequent amendment and the
like. Much importance is not given to the forms unless they contain requirements of a
mandatory nature.

7. Exemptions

An exemption clause in a taxing statute must be, as far as possible, liberally construed and in
favour of the assessee, provided no violence is done to the language used. [CIT vs.
Dungarmal Tainwala (1991) 191 ITR 445 (Patna)]

“It is true that an exemption provision should be liberally construed, but this does not mean
that such liberal construction should be made even by doing violence to the plain meaning of
such exemption provision. Liberal construction will be made wherever it is possible to be
made without impairing the legislative requirement and the spirit of the provision.” [Petron
Engineering Construction Pvt. Ltd. vs. CBDT (1989) 175 ITR 523 (SC)]

8 . Proviso:

The function of a proviso is generally to provide an exception to the main provision. A

proviso cannot be read independently of the section under which it is incorporated and vice –
a-versa. Proviso may either carve out an exception to the section or may qualify a part of the
section.

Provisions for deduction, exemption and relief should be interpreted liberally, reasonably and
in favour of the assessee. CIT vs. South Arcot District Co-operative Marketing Society Ltd.
(1989) 176 ITR 117 (SC), CIT v/s. Gwalior Rayon Silk Mfg. Co. Ltd. – [(1992) 196 ITR 149
(SC)]

Proviso should be read as if providing something by way of addition to main provision CIT
v/s. Udaipur Distillery Co. [(2004) 274 ITR 429 (Raj)].

In Allied Motors, 224 ITR 677, the Supreme Court has held :

“A proviso which is inserted to remedy unintended consequences and to make the provision
workable, a proviso which supplies an obvious omission in the Section and is required to be
read into the Section to give the Section a reasonable interpretation, requires to be treated as
retrospective in operation, so that a reasonable interpretation can be given to the Section as a
whole.”

In Shah Bhojraj Kuverji Oil Mills & Ginning Factory v. Subhash Chandra Jograj Sinha,
AIR, 1961 SC 1596, at page 1600 , the parameters of a proviso was summed up by the
Supreme Court : “The Law with regard to provisos is well-settled and well-understood. As a
general rule, a proviso is added to an enactment to qualify or create an exception to what is in
the enactment and ordinarily, a proviso is not interpreted as stating a general rule.”

Proviso to a section would normally be controlled by main section; proviso normally should
be construed strictly and more so when it relates to fiscal provisions even inviting penalty
consequences, whenever there is default in compliance. Sony India Ltd. v. CIT (2005) 276
ITR 278 (Delhi)

A provision in a taxing statute granting incentives for promoting growth and development
should be construed liberally; and since a provision for promoting economic growth has to
be interpreted liberally the restriction on it too has to be construed so as to advance the
objective of the provision and not to frustrate it Bajaj Tempo Ltd. v/s. CIT [(1992) 196 ITR
188 (SC)]

9. Explanation:

It is understood that an Explanation is incorporated in a particular section to explain a phrase

or certain words in that section. An explanation may be appended to a section to explain the
meaning of the words used in the section. There is no presumption that an Explanation which
is inserted subsequently introduces something new which was not present in the section
before. Ordinarily, an Explanation is inserted to clear up any ambiguity in the section and it
should be so read as to harmonise it with the section and to clear up any ambiguity in the
main section. CIT v/s. Banque Nationale De Paris – [(1992) 194 ITR 167 (Bom) 168] ;
Keshavji Ravji & Co. v. CIT [ 183 ITR 1 (SC) ]

An Explanation appended to a section or a sub - section becomes an integral part of it and has
no independent existence apart from it. CIT v/s. Reunion Engg. Co. – [(1993) 203 ITR 274
(Bom)].

Explanation below a particular sub-section or a clause is intended to explain that particular

sub-section or a clause only. But when Explanation is at the end of the section it is meant to
explain the entire section. (A.Y. 2003-04)
DIT (Exemption) v. Bagri Foundation (2010) 192 Taxman 309 (Delhi)

An explanation, if it changes the law, is not presumed to be retrospective irrespective of the

fact that phrase used is “it is declared” or “for removal of doubts”. Sedco Forex International
Drill Inc. & Others v. CIT (2005) 279 ITR 310 (SC)

10.  CASUS OMISSUS:

The Court only interprets the law and cannot legislate. To legislate is the prerogative of the
Parliament or the State Legislature. A casus omissus should not be readily inferred and for
the purpose all the parts of the statute or section must be construed together and every clause
of a section should be construed with reference to the context and other clauses thereof so
that the construction to be put on a particular provision makes a consistent enactment of the
whole statute. It is not open to court to add something or read something in statute on basis of
some supposed intendment of statute. The maxim “Judicis estjus dicere, non dare’’ pithily
expounds the duty of the Court. It is to decide what the law is and apply it, not to make. ACIT
v. Velliappa Textiles Ltd. (2003) 263 ITR 550 (SC)

Normally the Court cannot supply any assumed omission in the statute except in case of
necessity, within the four corners of the statute. (Union of India –vs. Rajiv Kumar (AIR 2003
SC 2917)

The courts have held that a Casus Omissus cannot be supplied by the court except in the case
of clear necessity and when reason for it is found in the four conrners of the statute itself.
However a Casus Omissus should not be readily inferred and for that purpose all the parts of
a statute or section must be construed together and every clause of a section should be
construed with reference to the context and other clauses thereof so that the construction to be
put on the particular provisions makes a consistent enactment to the whole statute.

In CIT v. National Taj Traders 121 ITR 535 (SC ). The court was considering the period of
limitation for passing order in Revision by the Commissioner. In that context it was held as
under at page 541 :

“Two principles of construction – one relating to casus omissus and the other in regard to
reading the statute as a whole –appear to be well settled. In regard to the former the following
statement of law appears in Maxwell on the Interpretation of Statutes (12th end.) at page 33 :

“Omissions not to be inferred.- It is a corollary to the general rule of literal construction that
nothing is to be added to or taken from a statute unless there are adequate grounds to justify
the inference that the legislature intended something which it omitted to express. Lord
Mersey said : ₹It is a strong thing to read into an Act of Parliament words which are not
there, and in the absence of clear necessity it is a wrong thing to do’. ₹We are not entitled’,
said Lord Loreburn L.C., ₹to read words into an Act of Parliament unless clear reason for it
is to be found within the four corners of the Act itself’. A case not provided for in a statute is
not to be dealt with merely because there seems no good reason why it should have been
omitted, and the omission appears in consequences to have been unintentional”.

In regard to the latter principle the following statement of law appears in Maxwell at page
47 :
“A statute is to be read as a whole. – It was resolved in the case of Lincoln College (1595) 3
Co. Rep. 58b, at p. 59b, that the good expositor of an Act of Parliament should ₹make
construction on all the parts together, and not of one part only by itself’. Every clause of a
statute is to ₹be construed with reference to the context and other clauses of the Act, so as, as
far as possible, to make a consistent enactment of the whole statute'.’ (Per Lord Davey in
Canada Sugar Refining Co. Ltd. v. R (1898) AC 735, 741 (PC)”.

External Aids to construction:

1. Legislative history and background

For determining the purpose or object of the legislation, it is permissible to look into the
circumstances which prevailed at the time when the law was passed and which necessitated
the passing of that law. For the limited purpose of appreciating the background and the
antecedent factual matrix leading to the legislation, it is permissible to look into the
Statement of Objects and Reasons of the Bill which actuated the step to provide a remedy for
the then existing malady.

To sustain the presumption of constitutionality, consideration may be had even to matters of

common knowledge, the history of the times and every conceivable state of facts existing at
the time of legislation which can be assumed. Even though for the purpose of construing the
meaning of the enacted provision, it is not permissible to use these aids, yet it is permissible
to look into the historical facts and surrounding circumstances for ascertaining the evil sought
to be remedied.. [Shashikant Laxman Kale vs. Union of India 185 ITR 104 (SC)]

“The Court may consider the general history of the statute, including its derivation, that is,
the various steps leading up to and attending its enactment in its effort to ascertain the
intention of the Legislature where it is in doubt”. [S.P. Gupta vs. Union of India and Another
(1982) AIR 149 (SC)]

“The dominant purpose in construing a statute is to ascertain the intention of the Legislature
as expressed in the statute considering it as a whole and in its context. That intention, would,
therefore give the meaning of the statute and is primarily to be sought in the words used in
the statute itself, which must, if they are plain and unambiguous, be applied as they stand.”
[(1988) 2 SCC 299 Doypack Systems P. Ltd.]

2. Circulars and interpretation by tax authorities:

The circulars issued by the CBDT would be binding on officers and persons employed in the
execution of the Income-tax Act and the effect of the circular was taken into account in
deciding the constitutionality of a provision contained in the Act. [Navnitlal Zaveri vs. K.K.
Sen (1965) 56 ITR 198 (SC)]

Circulars issued by the Central Board of Direct Taxes can bind the Income-tax Officer but
will not bind the appellate authority or the Tribunal or the court or even the assessee. [ITO vs.
V.D. Manoharlal Kothari, 236 ITR 357 (Mad.)].

The interpretation placed by the department in the Income-tax Manual has been held not to be
a proper guide when the construction of a statute is involved. [CIT vs. V. K. Srinivasan and
K. Gopalan (1953) 23 ITR 87 (SC)].
The officers of the department are bound to follow the circulars issued by the Board. [CIT vs.
Sanwarmal Shivkumar (1988) 171 ITR 377 (Raj)]

Whenever there is any instruction which is in favour of the assessee, the income-tax
authorities would not be permitted to go back on these instructions or circulars. This principle
is based on the principle of estoppel. However, a circular or a direction cannot be permitted to
curtail the provisions of the Act. They cannot curtail the statute or whittle down its effect.
Instructions cannot cut down the scope of a notification prescribing qualifications for a
certain exemption. [State of Madhya Pradesh & Anr. vs. G.S. Dall & Flour Mills (1991)
187 ITR 478 (SC)]

3. Speech of a Minister:

Except for the limited purpose of ascertaining the mischief which the Act seeks to remedy,
the speech of the Minister should not be looked into.

(1991) 190 ITR 418 (Cal) Soorajmal Nagarmal vs. CIT

(1991) 190 ITR 361 (Gauhati) Assam Frontier vs. UOI

(1991) 189 ITR 81 (Delhi) Escorts Ltd. vs. UOI

(1988) 173 ITR 433 (Bom) B.R. Sound N Music vs. Bhardwaj (O.P.)

Finance Minister’s speech before parliament while introducing Bill, can be relied on to throw
light on object and purpose of provisions. Kerala State Industrial Development Corp. Ltd. v.
CIT (2003) 259 ITR 51 (SC)

Speeches by Chief Minister and Finance Minister that such tax would be abolished. Dealers
relying upon statements and providing benefit to milk producers. State Government is bound
by such promise. Not entitled to demand purchase tax on milk till the date of a contrary
decision by the cabinet. State of Punjab v. Nestle India Ltd. & Anr. (2004) 269 ITR 97 (SC).

In Builders Association vs. Union of India (1994) 209 ITR 877 (SC) the court held that the
opinion of law minister and reply of minister in Parliament regarding a taxing provision
cannot be treated as binding on the Court.

“It is true that the speeches made by the Members of the Legislature on the floor of the House
when a bill for enacting a statutory provision is being debated are inadmissible for the
purpose of interpreting the statutory provision but the speech made by the mover of the bill
explaining the reasons for the introduction of the bill can certainly be referred to for the
purpose of ascertaining the mischief sought to be remedied by the legislation and the object
and the purpose for which the legislation is enacted. This is in accord with the recent trend in
juristic thought not only in western countries but also in India that interpretation of a statute
being an exercise in the ascertainment of intention of the Legislature, everything which is
logically relevant should be admissible.” [K.P. Varghese vs. ITO (1981) 131 ITR 597 (SC)]

“The Lok Sabha Debates and the Rajya Sabha Debates are reported in the journals of the two
Houses of Parliament which are printed and published by them. The Court has to take judicial
notice of the proceedings of both the Houses of Parliament and is expected to treat the
proceedings of the two Houses of Parliament as proved on the production of the copies of the
journals or the reports containing proceedings of the two Houses of Parliament which are
published by them.” [Baburao alias P.S. Samant vs. Union of India and Others (1988) AIR
440 (SC)]

Letter simpliciter written by Finance Minister to a Member of Parliament will not have any
statutory force Vinod Rathore v. Union of India (2005) 278 ITR 122 (MP)(High Court)

If there is no ambiguity in the language of a particular provision, notes on clauses and

memorandum explaining the provision cannot be referred to as aid in interpretation. [CIT vs.
Central Bank of India Ltd. (1990) 185 ITR 6 (Bom) (FB)]

4. Statement of objects and reasons

Courts have held that if the language of the statute is unambiguous, it is not required to
consider the history of Parliament in making or amending a particular statutory provision.
However the Statement of Objects and Reasons has been referred to by the Courts where the
words used in statute do not have clarity. In this regard the following decision is relevant.

(i) S.C. Prashar v. Vasantsen Dwarkadas 49 ITR 1 (SC)

If the language of the statute is clear and admits of no ambiguity, recourse to the statement of
objects and reasons for the purpose of construing a statutory provision is not permissible.
(1985) 155 ITR 144 (SC) Govind Saran Ganga Saran.

It is well settled that the Objects and Reasons are only an aid to the construction and a statute
may undergo a metamorphosis during its passage in the Legislature. Where the language of
the statute is clear and categoric, the same cannot be nullified by what might, at the initial
stage, have been the views of the proposer of the bill in introducing it in the Legislature.

The Income-tax Act is a consolidating and amending statute. The Courts must, therefore,
construe the provisions of the Act as forming a code complete in itself and exhaustive of the
matters dealt with therein and ascertain what their true scope is [Rao Bahadur Ravulu Subba
Rao & Ors. vs. CIT (1956) 30 ITR 163 (SC)].

Reason for using a certain language in a draft Bill and a different expression in the provision
ultimately enacted cannot be gathered from mere comparison of the two sets of provisions.
There may be variety of reasons as to why the ultimate provision varies from the original
draft. Therefore, it would be unsafe to refer to or rely upon the drafts, amendments, debates
etc. for interpretation of a statutory provision when the language used is not capable of
several meanings. CIT .vs. Sikandarkhan N. Tunvar & Ors. (2013) 357 ITR 312 (Guj.)(HC)

5. Reports of Commissions:

The Recommendation of Select Committee cannot be admitted for interpreting a statutory

provision. However it can be used as an aid to understand the interpretation of Parliament in
bringing about the change in the statute. CIT v. Smt. P.K. Noorjahan 237 ITR 570 (SC) 573

Similarly it was held in the case of R. S. Nayak vs. A.R. Antulay (1984) AIR 684 (SC)]
“More often an Expert Committee or a Joint Parliamentary Committee examines the
provisions of the proposed legislation. But language being an inadequate vehicle of thought
comprising intention, the eyes scanning the statute would be presented with varied meanings.
If the basic purpose underlying construction of a legislation is to ascertain the real intention
of the Parliament, why should the aids which Parliament availed of such as report of a
Special Committee preceding the enactment, and the object sought to be achieved, be denied
to Court whose function is primarily to give effect to the real intention of the Parliament in
enacting the legislation. Such denial would deprive the Court of a substantial and illuminating
aid to construction. Therefore, departing from the earlier English decisions we are of the
opinion that reports of the Committee which preceded the enactment of the legislation,
reports of Joint Parliamentary Committee, report of a Commission set up for collecting
information leading to the enactment are permissible external aids to construction.”

6. Integrated scheme of direct taxation and equities

In a taxing Act one has to look merely at what is clearly said. There is no room for any
intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to
be read in, nothing is to be implied. One can only look fairly at the language used. [CIT vs.
Ajax Products Ltd. (1965) 55 ITR 741 (SC)] [CED vs. Sileshkumar R. Mehta (1990) 181 ITR
10 (Mad) (FB)]

“Where, however, the provisions are couched in language which is not free from ambiguity
and admits of two interpretations a view which is favourable to the subject should be adopted.
The fact that such an interpretation is also in consonance with ordinary notions of equity and
fairness would further fortify the court in adopting such a course.” [CIT vs. Madho Prasad
Jatia (1976) 105 ITR 179 (SC)]

7. Dictionary meanings

The dictionary meaning of a word cannot be looked at where the word has been statutorily
defined or judicially interpreted. But where there is no such definition or interpretation, the
court may take aid of dictionaries to ascertain the meanings of a word in common parlance,
bearing in mind that a word is used in different senses according to its context and a
dictionary gives all the meanings of a word and the court has, therefore, the context in which
it has to interpret that word. [Titaghur Paper Mills Co. Ltd. vs. State of Orissa (1983) 142
ITR 663 (SC)]

“Words in the section of a statute are not to be interpreted by having those words in one hand
and the dictionary in the other. In spelling out the meaning of the words in a section, one
must take into consideration the setting in which those terms are used and the purpose that
they are intended to serve.” [CGT vs. N.S. Getti Chettiar (1971) 82 ITR 599 (SC)]

The fair rule, therefore, is to adopt a reasonable construction of the words used in the Act
without leaning to the one side or the other, i.e., neither as a guardian of the revenue nor as
the protector of the subject. The duty of the
Court is colourless. [M.C.T. Bank Ltd. (in liquidation) vs. CIT (1963) 48 ITR 678 at 692
(Mad.)]
IV. SUBSIDIARY RULES:

1.  SPECIAL LAW OVERRIDES GENERAL LAW

The accepted rule of interpretation is that special provisions will prevail when there is a
conflict between the two :

This rule of interpretation has been highlighted in CIT v. Shahzada Nand & Sons 60 ITR 32
(SC)

However, as the name suggests, it is a general law and will always be overridden or
superseded by a special law as per the canons of judicial interpretation. The Latin maxim
“Generalia specialibus non derogant” is one of the cardinal maxims of interpretation and
means that a general law will always be superseded by a special law. (State of Gujarat vs.
Ramjibhai AIR 1979 SC 1098)

Thus since taxing statutes are always special laws and most often self contained enactments
which even oust the jurisdiction of Courts in many cases, they would most definitely prevail
over the General Clauses Act, 1897, when they define the scope of terms or procedures.

However the general rule would apply wherever the special statute does not define the scope
or restricts the scope, the general rule would apply as controlled or cut down by the special
rule. (South India Corporation Pvt. Ltd. vs. Board of Revenue AIR 1964 SC 207)

2. CHARGING SECTION SHOULD BE STRICTLY CONSTRUED WHILE THE

PROCEDURAL SECTIONS SHOULD BE LIBERALLY INTERPRETED .

This is also a very practical rule in the interpretation of taxing statutes and the charging
section should be liberally construed while the procedure should have the widest possible
ambit so as to ensure that no one has a vested right of procedure.

This is a very important and practical rule of interpretation and generally resorted to while
interpreting the sections pertaining to incentives, exemptions and deductions where the spirit
is to promote exports, increase earnings in foreign convertible exchange, promote
industrialisation, infrastructure development etc. A provision for appeal should also be
liberally construed.

(a) CIT vs. Naga Hills Tea Co. Ltd. 89 ITR 236, 240 (SC); CIT vs. Contr ED vs.
Kanakasabai 89 ITR 251, 257(SC)

A provision for exemption or relief should be construed liberally and in favour of the
assessee even if it results in his obtaining “a double advantage”. Gursahai Saigal vs. CIT 48
ITR (SC) 1

Those sections which impose the charge or levy should be strictly construed; but those which
deal merely with the machinery of assessment and collection should not be subjected to a
rigorous construction but should be construed in a way that makes the machinery workable.

Principle for interpretation of exemption notification and exception thereto – Held, an

exemption notification under an enactment has to be construed strictly – However, an
exemption notification issued for implementing an industrial policy of the State, which had
promised tax exemption for setting up new industries in backward area, held, should be
construed not strictly but liberally keeping in view the objects of such policy.

State of Jharkhand & Ors. v. Tata Cummins Ltd. & Anr. (2006) 4 SCC 57

3 THE STATUTE MUST BE READ AS A WHOLE :

An interpretation clause, which extends the meaning of a word, does not take away its
ordinary meaning. It should be borne in mind that an interpretation clause is not meant to
prevent the word receiving its ordinary, popular and natural sense whenever that would be
properly applicable. However it is to enable the word as used in the Act, when there is
nothing in the context or the subject-matter to the contrary, to be applied to some things to
which it would not ordinarily be applicable.

4.. CONJUNCTION DISJUNCTION

The word “or” is generally used disjunctively while “and” is used conjunctively. In certain
situations however, these words may be interchanged. In the words of Lord Halsbury these
words cannot be interchanged unless the clear intent of the statute requires that to be done.
The Supreme Court considered this issue in the leading case of Chamarbaugwala (AIR 1957
S.C. 699) with a view to give effect to the clear intention of the Legislature as evidenced from
the statute as a whole.

5. THE JUDGMENT OF FOREIGN COURTS HAVE ONLY PERSUASIVE VALUE.

L.G. Electronics India P. Ltd v. ACIT (2013)140 ITD 41 (SB) (Delhi) (Trib.)

6 . AVOIDING ADDITION OR SUBSTITUTION OF WORDS :

Normally the courts would avoid addition or substitution of words where the meaning is plain
and unambiguous. However if it is felt that some words are missing then it is permissible to
implant the missing words.

7. CREATIVE INTERPRETATION :

The Act was enacted in the year 1948. Information Technology at that time far from being
developed was unknown. Constitution of India is a living organ. Creative interpretation had
been resorted to by the Court so as to achieve a balance between the age old and rigid laws on
the one hand and the advanced technology, on the other. The Judiciary always responds to the
need of the changing scenario in regard to development of technologies. It uses its own
interpretative principles to achieve a balance when Parliament has not responded to the need
to amend the statute having regard to the developments in the field of science.

An interpretation of a provision which renders certain other provisions redundant or otiose

cannot be accepted.

State of Punjab and Others v. Amritsar Beverages Ltd. & Ors. (2006) 7 SCC 607 ; Sadhu
Singh v. Gurudwara Sahib Narike (2006) 8 SCC 75
8. RETROSPECTIVE:

Every statute is prima facie prospective unless it is expressly or by necessary implication

made to have retrospective operation.

GEM Granites v. CIT (2005) (2004) 271 ITR 322 (SC)

It is well settled that all procedural laws are retrospective unless the Legislature expressly
states to the contrary. It has been held that the procedural laws in force must be applied at the
date when the suit or proceeding comes on for trial or disposal. It has been held that a Court
is bound to take notice of the change in the law and is bound to administer the law as it was
when the suit came up for hearing. It has been held that if a Court has jurisdiction to try the
suit, when it comes on for disposal, it then cannot refuse to assume jurisdiction by reason of
the fact that it had no jurisdiction to entertain it at the date when it was instituted.

Sudhir G. Angur & Ors. v. M. Sanjeev & Ors. (2006) 1 SCC 141

The test of the length of time covered by the retrospective operation can not by itself
necessary be a decisive test. Account must be taken of the surrounding facts and
circumstances relating to the taxation and the legislative back ground of the provision.
Retrospective legislation is valid. Concession of the Solicitor General for India before the
High Court that amendment would apply only to assessments which were yet to be finalised
can not be relevant consideration in up holding the amendment if it were found to be
constitutionally infirm.

National Agricultural Co-operative Marketing Federation of India Ltd. & Anr. v. UOI & Ors.
(2003) 260 ITR 548 (SC)

A statute, which impairs vested rights or the legality of past transactions should not prima
facie be held to be retrospective.

Sanjay Khetan v. CIT (2004) 266 ITR 453 (All.)(High Court)

V. DOCTRINE OF NATURAL JUSTICE:

Natural justice is an important concept in administrative law. In the words of Megarry, J it is

₹justice that is simple and elementary, as distinct from justice that is complex, sophisticated
and technical. Natural justice has meant many things to many writers, lawyers and systems of
law. It has many colours and shades and many forms and shapes. It is also known as
₹substantial justice’, ₹fundamental justice’, ₹universal justice’ or ₹fair play in action’. It is
not possible to define precisely and scientifically the expression ₹natural justice’.

Wade states that the rules of natural justice operate as implied mandatory requirements, non
observance of which invalidates the exercise of the power. He adds, ₹the presumption is, it
(natural justice) will always apply, however silent about it the statute may be.

The doctrine of natural justice seeks not only to secure justice but also to prevent miscarriage
of justice’. The norms of natural justice are based on two ideas:
1. Audi alteram partem, - No one should be condemned unheard; the person, who has to be
effected by a decision has a right to be heard; and

2. Nemo judex in re sua – No one should be made a judge in his own cause or the rule against
bias;the authority deciding the matter should be free from bias.

APPLICATION & SCOPE.

The Doctrine focuses on the rule of fair hearing, which is one of the essential rules of the
Natural Justice.

However the applicability of the principles of natural justice depends upon the facts and
circumstances of each case. The Supreme Court has reiterated that the principles of natural
justice are neither rigid nor they can be put in a straight jacket but are flexible. It is well
established that rules of natural justice are not rigid rules, they are flexible and their
application depends upon the setting and background of statutory provisions, nature of the
right which may be affected and the consequences which may entail, its application depends
upon the facts and circumstances of each case. 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, i.e., which may not be against sense of ‘fairness’ and
‘good conscience’.

It is settled law and there is no dispute that the principles of natural justice are binding on all
the courts judicial bodies and quasi judicial authorities. But the important questions are:
Whether these principles are applicable to administrative authorities? Whether those bodies
are also bound to observe them? Whether an administrative order passed in violation of these
principles is ultra vires on that ground.

It is now well settled that a statutory body, which is entrusted by statute with a discretion,
must act fairly. It does not matter whether its functions are described as judicial or quasi
judicial on the one hand, or as administrative on the other hand.

Moresover, the principle of natural justice apply not only to the legislation or State action but
also apply where any tribunal, authority or body of persons, not falling within the definition
of “State” under Article 12, is charged with the duty of deciding a matter/In such a case, the
principles of natural justice require that it must decide such a matter fairly and impartially.

The reason for the flexibility of natural justice is that the concept is applied to a wide
spectrum of the decision-making bodies. Principles of Natural Justice apply both to judicial &
administrative Acts. Uma Nath Pandey & Ors v/s. State of UP AIR 2009 SC 2375.

The assessing officer should observe the principle of natural justice while making the
assessment. Dhakeswari Cotton Mills vs. CIT (1954) 26 ITR 775. SC

The right is so fundamental that the failure to observe the principles of natural justice cannot
be made good in appeal. Lack of opportunity before the Assessing Officer cannot be rectified
by the appellate authority by giving such opportunity.

Tin Box Co. vs. CIT (2001) 249 ITR 216 (SC)
· A reassessment completed without furnishing the reasons actually recorded by the AO for
reopening of assessment is not sustainable in law. The subsequent supply of the reasons
would not make good of the illegality suffered at the stage of reopening of the assessment.

Tata International Ltd. vs. Dy. CIT (2012) 52 SOT 465 (Mum);

CIT vs. Videsh Sanchar Nigam Ltd. (2012) 340 ITR 66 (BOM)

The Commissioner must give an opportunity to the assessee if he desires to use the evidence
collected against the assessee through reports of subordinate authorities. On the facts the
court held that order passed by Chief Commissioner denying approval under section 10(23C)
(vi), relying upon certain adverse material without supplying the same to the petitioner and
without allowing an opportunity of rebuttal thereof does not fully meet the requirement of
principles of natural justice and therefore, it can be sustained.

Rastra Sahayak Vidyalaya Samiti v. CCIT (2012) 246 CTR 154 (Raj.)(High Court)

· Assessing Officer is awarded cost for not following the direction of Tribunal and for
passing the order without following the principle of natural justice.

Sushila Suresh Malge v. ACIT (Mum.)(Trib).www.itatonline.org.

Ouster clauses 
An ouster clause can be defined as an effort of the legislature to preclude the actions or
rulings of any public authority from being questioned before the courts. Such clauses are
formed in order to signal to the decision-makers that they may perform without any fear of
intrusion from the court. There are two main types of ouster clauses, which are discussed
below. 

Types of ouster clause 

Partial ouster or time limit clause

Unlike the total ouster clause, which eliminates judicial review completely, a partial ouster or
time limit clause provides a certain time period, after which no remedy shall be attained.
These types of clauses are generally quite efficacious unless the public authority has acted
with mala fide intent.  
The partial exclusion of the judiciary was given consent in the case of Sampath Kumar vs.
UOI. In this case, it was held that the decision of the administrative tribunal can be excluded
from judicial review by the high court if the tribunal constitutes a ‘judicial element’. In order
to completely preclude judicial review, an appeal procedure has to be established, but this is
not very much appreciated in the Indian continent as it is believed that judicial review cannot
be barred completely even if there were other remedies in cases where the tribunals used
powers that were ultra vires.  

Total ouster or finality clause 

Total or finality clause means the decision by any agency ‘shall be final’. In simple words, it
means the decision of the judge or tribunal is final and cannot be challenged by any court. 

In the case of Shri Kihota Hollohon vs. Mr. Zachilhu and Others (1992), a reference was
made to a statement by Professor Wade that said “Finality is a good thing, but justice is
better”. He also made an observation that many statutes render that some decisions are
“final” and that these provisions act as a bar to any appeal, but such provisions do not hamper
the operation of judicial review as the courts forbid them to act in such a way. Thus, the
normal effect of the finality clause is to not give rise to any further appeals.

Further, in the case of Union of India and Anr. vs. Tulsiram Patel and Ors. (1985), the
Hon’ble Supreme Court was dealing with Article 311(3) of the Constitution, which attaches
finality to the order of the disciplinary authority regarding whether it was reasonably
practicable to hold an inquiry or not. The Court made an observation that the ‘finality’ clause
did not preclude jurisdiction, be that as it may, but it suggested that the jurisdiction is
bounded by certain grades. 

The legal issue associated with the ouster clause 

The main legal issue with the ouster clause is ‘whether it is truly feasible to eliminate the
jurisdiction of the courts by the use of carefully drafted laws?’

A professor in Singapore by the name of Thio Li-ann has observed that “courts generally
loathe ouster clauses as these contradict the rule of law whereby judges finally declare the
legal limits of power and also as the individual’s ultimate recourse to the law is denied.
Hence, courts try to construe these strictly to minimise their impact. In so doing, they may be
going against the grain of parliamentary will.”

A note must be taken that the ouster clause does not effectively debar judicial review of
errors of law that have an impact on the jurisdiction of the authority in the process of making
decisions. In the case of Regina vs. Medical Appeal Tribunal ex parte Gilmore; Re Gilmore’s
Application: CA 25 Feb (1957), Lord Alfred Denning stated that he finds it very “well settled
that the remedy by certiorari is never to be taken away by any statute except by the most
clear and explicit words. The word ‘final’ is not enough.” And in Anisminic Ltd. vs. Foreign
Compensation Commission (1968), it was stated that this type of clause is for making the
“decision final on the facts, but not final on the law. Notwithstanding that the decision is by a
statute made ‘final,’ certiorari can still issue for excess of jurisdiction or for error of law on
the face of the record.”
Interpretation of statutes: A complete study
to an aids to interpretation
1. What is interpretation of statutes?
Interpretation is the process which is employed by the judiciary to ascertain or to determine the
meaning of the statutes or legal provision. It is basically a process by which court seeks to ascertain
the true meaning of the expression or word or phrase which is in question in any statute before the
court and determine the true intention of the legislature behind such statutory provision.

A process of interpretation employed by the judiciary can be done through various tools or principles
of statutory interpretation which include seeking help from internal or external aids to
interpretation and applying primary or secondary rule of interpretation which has evolved over a
period of time by the court.

According to Salmond:
Interpretation and construction is the process by which the court seek to ascertain the meaning of
the legislature through the medium of authoritative forms in which it is expressed.[1]

According to Blackstone:
The most fair and rational method for interpreting a statute is by exploring the intention of the
legislature through texts, the subject matter, the effect and consequences or the spirit and reason of
law.[2]

2. What is construction of statutes?

Construction, in strict sense, is the process by which the court assign the meaning to the ambiguous
provision which is beyond the letter of law for the purpose to resolve the inconsistency. The judges
after taking into consideration the factual circumstances before the court give a particular meaning
to the expression or word or phrase in question. Although, such meaning must be within the ambit
of the objective of statute and could not be directly explained by the statute.
The word interpretation and construction are used interchangeably but there is thin line of
difference between both the concepts.

According to Cooley, �Interpretation is the art of finding out the true sense of any form of words
and enabling others to drive from them the same meaning which the author intended to convey,
whereas, construction is the process of drawing conclusions, respecting subjects that lie beyond the
direct expression of the text, which are in the spirit though not within the letter of law.[3]
Basically, interpretation is a process of discovering, from permissible data, the meaning and
intension of the legislature and if interpretation discloses clear meaning and intention of the
legislature it will be directly applied to factual circumstances but if interpretation doesn't disclose
clearly the meaning in context of factual circumstances, then construction will undergoes to seek to
assign meaning or intention to the words used by the legislature.[4] It is clearly drawn that
construction is more concerned with applying the meaning to the factual circumstances than mere
ascertaining the meaning of the words of provision.

Tabular difference between interpretation and construction

Interpretation Construction

It is the process by which court assign the

It is the process adopted by the court to
meaning to the ambiguous provision which
1 determine the true meaning of the legislative
is beyond the letter of law for the purpose
provision.
to resolve the inconsistency.

By construction one can find out the way to

By interpretation one can find out the true sense
2 apply the meaning to the factual
of any form of words in statue.�
circumstances before court.

Interpretation enables the linguistic meaning of Construction is more concerned in enabling

3
the legal text. conclusion to the situation.

3. Aids to interpretation of statutes

An Aid is considered as a tool or device which helps in interpreting a statute, the court can take help
from internal aids to interpretation (i.e. within statutes) or external aids to interpretation (i.e.
outside the statutes)

A. Internal aids to interpretation

Internal aids means those aids which are available in the statute itself, court can interpret the
statute by employing such aids which are as follows:

1. Title of the statute

There are basically two types of title-
I. Short Title

The short title of the Act is only its name which is given solely for the purpose of reference
and identification.
Short title is mention under Section 1 of the Acts and ends with the year of passing of the
Act.

Example- Section 1 of CPC says, This Act may be cited as Code of Civil Procedure, 1908.'
Section 1 of Indian contract Acts says, This Act may be called as Indian Contract Act, 1872.

II. Long Title

The long title is mention under certain acts whose purpose is to give a general description
about the object of the act.
However, it is not considered as a conclusive aid to interpretation of statutes as it doesn't
resolve ambiguity arising in words or expression under statutory provision but only provide a
 general idea of the act.

Example- The long title of CrPC says, An act to consolidate and amend the laws relating to
the criminal procedure. Also, the long title of CPC says, �An act to consolidate and amend
the laws relating to the procedure of the courts of civil judicature.
�
2. Preamble
Preamble is a tool for internal aid to interpretation as it contains the main objects and
reasons of the Act.
The rule of interpretation of preamble is that when a language of an enactment is clear and
unambiguous, the preamble has no part to play but if more than one interpretation is
possible, a help can be taken from preamble to ascertain the true meaning of the provision.
The preamble is mention on the very first page of the act but modern acts doesn't pass with
preamble which is declining its importance.

State of West Bengal v. Anwar Ali [5], the constitutionality of Section 5 of the West Bengal
special courts act, 1950 was challenged on the grounds of violative of Article 14 of the
constitution as the provision in the act authorize state government to select a particular case
which deserved to be tried by special courts having special procedure. The Supreme Court
take help of the preamble of the said Act and held that state government has discretion to
choose such cases.
�
3. Marginal notes
Marginal notes are inserted at the side of the sections in an act which express the effect of
the section but they are not part of statute.
They are also known as Side notes and are inserted by drafters and not legislators.

The rule of interpretation is that in olden times a help is used to be taken from marginal
notes when the clear meaning of the provision is in doubt but as per modern view of the
court, marginal notes doesn't have any role to play because either they are inserted by
legislators nor does they form the part of the statute.
However, for interpreting constitution many times marginal notes are referred because they
are made by constituent assembly.

Bengal Immunity Company v. State of Bihar [6], the Supreme Court held that the marginal
notes of Article 286 is the part of the Constitution of India which talks about Restrictions as
to imposition of the tax on the sale or purchase of goods therefore, it could be relied on to
furnish a clue to the purpose and meaning of the article.
�
4. Headings
Headings are prefixed to sections or a group or set of sections.
These headings have been treated by courts as preambles to those sections or sets of
sections.
The rule of interpretation is that the heading can't control the plain words of the provision
but if after the plain reading of the section more than one meaning is possible, only then the
court may seek guidance from the headings.

Tolley v. Giddings [7], interpretation of section 217 of Road Traffic Act was in question which
provides that a person could be held liable of an offence if he allowed himself to be driven
away in a motor vehicle without the consent of its master. The heading of the provision is
Miscellaneous and general' and sub heading is Penalization of taking motor vehicle without
 authority'. The court held that headings to the section clearly explain the intention of the
legislature and thus the passenger would be held liable of an offence.
�
5. Illustration
Illustration are appended to a section of a statute with a view to illustrating the law
explained in the provision.
Such illustration manifest the intention of the legislature and can be referred in the case of
ambiguity or repugnancy.
However, the court emphasis through various judgments that it doesn't explain the whole
principle explain in the section through illustration nor does it curtail the ambit of the
section.
In the case of repugnancy between section and illustration, section will prevail.

Example- Section 378 of theft in IPC has 16 illustrations attached to it.

�
6. Explanation
The explanations are inserted with the purpose of explaining the meaning of a particular
provision and to remove doubts which might creep up if the explanation had not been
inserted.
The purpose of explanations are to explain the meaning and intention of act, to clarify in
case of obscurity or vagueness and to provide additional support to the object of the act.
However, it doesn't expand or curtail the meaning of the provision but only tries to remove
uncertainty and in the case of conflict between explanation and main section, the duty of
the court is to harmonize the two.

Example- section 108 of IPC defines the word abettor' which has five explanation attach to it.
�
7. Definition or Interpretation clause
It define certain words used elsewhere in the body of statute with the purpose to avoid the
necessity of frequent repetitions in describing the subject matter and extend the natural
meaning of some words as per the statute. It also define intention of the legislature in
respect of words mention in statute and avoid confusion.

The rule of interpretation is that whenever the words means or means and include' are used
in definition, it makes the definition exhaustive and don't allow to interpret the definition
widely but if the word includes' is used in the definition it provide widest interpretation
possible to the definition or enlarge the ordinary meaning of the word.

However, if the definition clause will result in an absurdity, the court will not apply such
definitions and the definition clause of one act can't be used to explain same word used in
another statute except in the case of statutes in pari materia.

Mahalaxmi Oils Mils v. State of A.P [8], interpretation of word tobacco was in question
which said tobacco means any form of tobacco whether cured or uncured or manufactured
or not and includes leaf stalks and steams of tobacco plant. The SC held that the definition is
exhaustive and refused to include tobacco seeds under the definition of tobacco.
�
8. Punctuation
Punctuation are put in the form of colon, semi colon, comma, full stop, dash, hyphen,
brackets etc
In earlier times statutes are passed without punctuations and therefore, the courts were not
 concerned with looking at punctuations but in modern times statutes are passed with
punctuations.

The rule of interpretation is that while interpreting the provision in punctuated form, if court
feels repugnancy or ambiguity the court shall read the whole provision without any
punctuation and if the meaning is clear will so interpret it without attaching any importance.
�
9. Schedules
Schedule are the part of statutes which are mentioned at the end of the act.
It contains details prescribe form of working out policies and contains subjects in the form of
lists.
In the case of clash between schedule and the main body of an act, the main body shall
prevail.

Example- Article 1 of the constitution provides that India shall be union of states and in
schedule 1 name of the states with its territories are mention.
�
10. Saving Clause
Saving Clause are generally appended in cases of repeal and reenactment of a new statute. It
is inserted in the repealing statute.
By this the rights already created under repealed enactment are not disturbed nor are new
rights created by it.
In the case of clash between the main part of statute and a saving clause, the saving clause
has to be rejected.
�
11. Proviso
The proviso to a section has the natural presumption that enacting part of the section would
have included the subject matter of the proviso.
The proviso serve four different purposes- qualify or exempt certain provision, provide
mandatory condition to be fulfilled by to make enactment workable, act as optional addenda
and become integral part of the enactment.

The rule of interpretation of proviso is that it can neither nullify the implication of main
enactment nor can enlarge the scope of main enactment and can only be referred in case of
ambiguity in the section.

In case of conflict between main enactment and proviso, it must be harmoniously construct
or in the view of many jurist proviso will prevail as it is the last intention of the legislature.

Example- Article 16(4) is considered as proviso of Article 16(1) held in T. Devadasan v. Union
of India [9].
�
12. Exception
Exception are generally added to an enactment with the purpose of exempting something
which would otherwise fall within the ambit of the main provision.
In case of repugnancy between exception and main enactment, the latter must be relied
upon. However, in many cases exceptions are relied being the last intention of legislature.

Example: Section 300 of IPC has five exceptions attached to it.

Difference between proviso and exceptions

Proviso has a wider function than exception as, an exception only exempt certain things to fall in the
main enactment whereas, proviso not only exempt certain cases but also provide a mandatory
condition, qualification or an optional addenda to the enactment.
Proviso follows the main enactment whereas exception is the part of main enactment.

B. External aids to interpretation

External aids are the aids which are not available inside the statute but outside the statute, the court
may seek help to the external aids in case of repugnancy or inconsistency in the statutory provision
which are as follows:

1. Dictionaries
When a word used in the statute is not defined therein or if defined but the meaning is
unclear only in such situation, the court may refer to the dictionary meaning of the statute
to find out meaning of the word in ordinary sense.

The meaning of such words shall be interpreted so to make sure that it is speaking about the
particular statute because words bears different meaning in different context.
Motipur zamindary company private limited v. State of Bihar [10], the question was
whether sales tax can be levied on Sugarcane.

The applicant argued that it is green vegetable and should be exempted from tax. The
dictionary meaning of vegetable said anything which derived or obtained from the plants.
The SC rejected dictionary meaning and held that in common parlance vegetable is
something which is grown in kitchen garden and used during lunch and dinner and held that
sugarcane is not vegetable.
�
2. Text Books
The court while construing an enactment, may refer to the standard textbooks to clear the
meaning. Although, the courts are not bound to accept such view.
The court time and again referred to mulla, kautiliya, manu, arthshastra.

Example: in Kesavananda Bharthi case [11], judges quoted large number of books.
�
3. Statement of objects and reasons
The statement of object and reasons are attached to the bill which describe the objects,
purpose and the reason for the bill. It also gives understanding of the background, the
antecedent state of affairs and the object the law seeks to achieve.

The parliament before passing a bill must take into consideration that what object a bill
serve to achieve.
However, it is not considered as conclusive aid to interpretation because doesn't impart the
true meaning to the statutory provision.
4. Constituent Debates/Speech
It shall compromises all such debate which had taken place in the parliament at the time of
formation of Constitution of India.
In case of inconsistency or repugnancy in the Constitution the court can clearly refer to such
debates.

Indra Sawhney v. Union of India [12], the interpretation of the expression backward class of
 citizen' used in Article 16(4) was in question before the court. The SC under this case
referred to the speech given by B.R. Ambedkar to understand the context, background and
object behind its use of the given expression.
�
5. Legislative Debates/Speech
It is referred as to debates or speeches which are made in the course of passing a bill in the
parliament by the parliamentarians to put forth their view.
It is not considered as a conclusive aid to interpretation and is therefore, not admissible
because many times speeches are influenced by the political pressure or maybe incorrect to
rely upon.
�
6. Committee Reports
Before the framing of the Bill, usually the matter is referred to a committee to consider it in
detail and give its report thereon.
These reports of the commissions and committee have been referred to as evidence of
historical facts or of surrounding circumstances and used for interpreting the Act.
When there is an ambiguity in the meaning of a provision and the act was passed on the
recommendation of a committee report, aid can be taken from that report to interpret the
provision.
Example: the criminal amendment act was based on the recommendation by J.S. Verma
Committee Report such report can be referred in case of any ambiguity in amendment.
�
7. Foreign laws and decisions
Judges may refer to foreign laws and decision if the jurisprudence of both the countries is
same, similarity in political system and ideology, when there is no domestic law on point and
if the Indian court believe that decision passed by the foreign court is not arbitrary.
However, the foreign courts or decision have only persuasive value as the courts in India are
not bound by the foreign courts.