TaxTonic Session: Statutory Interpretation - A Battle Between “Text” & “Context”!

Episode Duration:
85 minutes

Episode Background:
'TaxTonic', a 'subscriber only' thought leadership series, is Taxsutra's endeavour to consistently deliver top notch technical content to it's readers. The labyrinth of tax rulings on convoluted transactions keeps the world of taxation unpredictable and ever-evolving. This series will feature engrossing presentations, incisive analyses and a deep-dive by the tax experts on burning issues & controversies. So, gear up for a 'tonic' to chisel your tax mind and challenge your wit.

Speaker:
Mr. K. K. Chythanya (Senior Advocate)

Moderator:
Mr. Sachin Sastakar (Chartered Accountant)

What shall the episode cover?

The first part of the Golden Rule of Interpretation expects that the words of a statute are understood in their natural, ordinary, or popular sense and phrases and sentences are construed according to their grammatical meaning. As per the second part of the Golden Rule of Interpretation, the first part should ordinarily prevail unless it leads to some absurdity or  there is something in the context or in the object of the statute to suggest to the contrary.

Easier said than done! Tax payers, tax consultants and tax department are often faced with different views on a legal provision. The battle between the text and the context further affects the day to day functioning for the taxpayer as also blocks the tax dues that the Government lawfully wants to collect and multiplies the burden of the Courts.

Taxsutra presents the next episode of TaxTonic, to analyse and decipher the complexities on interpretation arising due to conflict in the text and the context. The discussion primarily covers:

1. Interpretation of Prospective v. Retrospective effect of a provision along with:
a. Retroactive effect of the tax provision.
b. Constitutional support for enactment of retrospective laws.
c. Application to Substantive and Procedural provisions

2. Interpretation of the term “May” and “Shall” to understand:
a. Mandatory v. Directory purpose.
b. Substantive and Procedural provisions with the terms “May” and “Shall”