Construction

1. Prof. S. P. Srivastava
Department of Law and Governance

2.  Means each of the words in a statute should be interpreted
by letter and no regard should be had to spirit beyond the
statute.
 It is known as:
A close or narrow reading and interpretation
of a statute or written document.
 Strict constructionists often look only at the literal meaning
of the words in question, or at their historical meaning at the
time the law was written.
 This is also referred as "strict interpretation" or "original
intent," because a person who follows the doctrine of strict
construction tries to ascertain the intent of the framers at
the time the document was written by considering what the
language they used meant at that time.

3.  In using a strict construction the exact
meaning of the content is considered along
with the purpose and intention of the law
makers while drafting the law.
 Strict construction occurs when ambiguous
language is given its exact and technical
meaning no other equitable consideration or
reasonable implications are made.

4.  The courts should recognize limitations on their powers in
interpreting statutes.They should recognize that the
legislature is supreme and must be followed to the extent
that it has passed laws which are clear and constitutional.
 The courts should recognize that the legislature has
become the most important lawmaker on major policy
questions.
 Certainty in the law enables planning of human affairs in
reliance on the law, and the realization of expectations
based on such planning.
 The purpose of strict construction was to mitigate the
rigour of such harsh sentences and sweeping
condemnations

5.  Express language is necessary for creation of
criminal offences, no act is to be deemed
criminal unless it is clearly so made by the
statute concerned.
 The words setting out the elements of an
offences are to be strictly construed.
 Punishment can be imposed only if the
circumstances of the case falls clearly within the
words of the enactment.
 Statutes dealing with the jurisdiction and
procedure should be strictly construed if they
relate to infliction.

6.  it was held as follows, ‘(a) Provision of exemption should
be strictly construed. It is not open to Court to ignore the
conditions prescribed in the exemption notification (b)
Mandatory rule must be strictly followed, while substantial
compliance might suffice in a directory rule (c) Whenever
the statute prescribed that a particular act is to be done in
a particular manner and also lays down that failure to
comply with the said requirement leads to severe
consequences, such requirement is mandatory (d) It is the
cardinal rule of the interpretation that where a statute
provides that a particular thing should be done, it should
be done in the manner prescribed and not in any other
way (e)Where a statute is penal in character, it must be
strictly construed and followed

7.  This rule is applicable with regard to taxing
and penal statutes.
 The Criminal Statutes must not be enlarged
by implication or intent beyond the fair
meaning of the language used or the
meaning that is reasonably justified by its
terms. Criminal statutes shall not be eligible
to encompass offences other than those
clearly described and provided for in their
language.

8.  If two possible constructions can be put upon a penal
provision, the court must lean towards that construction
which exempts the subject from the penalty rather than the
one which imposes penalty - Tolaram Relumal v. State of
Bombay - AIR 1954 SC 496
 Those not covered by express language of the penal statute
should not be roped in by stretching the language of the law.
Sanjay Dutt v. State - 1994 (5)SCC 402.
 Rule of strict construction of a regulatory/penal statute may
not be adhered to, if thereby the plain intention of the
Parliament to combat crimes of special nature would be
defeated. - Balram Kumawat v. UOI, AIR SC 4658

9.  if there is reasonable doubt or ambiguity, the principle
to be applied in construing a penal act is that such
doubt or ambiguity should be resolved in favour of the
person who would be liable to the penalty. (Isher Das
v. State of Punjab AIR 1972 SC 1295)
 Even with regard to penal provision, any
interpretation which withdraws life and blood of the
provision and makes it ineffective and a dead letter
should be averted. - . - Even if statute is penal, it is the
duty of Court to interpret it consistent with the
legislative intent and purpose so as to suppress
mischief and advance the remedy. NEPC Micon Ltd. v.
Magma Leasing Ltd. 96 CompCas 822

10.  Procedural delays and technicalities of law should not
be permitted to defeat the object sought to be
achieved by the Act. (State of Madhya Pradesh v.Shri
Ram Singh AIR 2000 SC 575).
 The Court must see that the thing charged as an
offence is within the plain meaning of the words used,
and must not strain the words on any notion that
there has been a slip, that there has been a casus
omissus;
 The power to define a crime and ordain its
punishment is vested in the legislature and not in the
judicial department

11.  Seksaria Cotton Mills Ltd v State of Bombay
 Alamgir v State of Bihar
 Chinu bhai v State of Bombay
 Sarjoo Prasad v State of Uttar Pradesh
 M.U Joshi v M.V Shimpi
 Rattan Lal v State of Punjab

12.  Tax laws are highly complex, complicated and
beyond understanding of a tax-payer it
should be objective in imposition of tax.
 There is no equity about tax.
 There is no presumption of tax intendment.
 Nothing is to be read in, nothing to be
implied.
 If there are two reasonable interpretations of
taxing statutes, the one that favors the
assessee has to be accepted

13.  Rowlatt J. in his classic statement in Cape Brandy Syndicate v
I.R.C. (1 KB 64, 71): "In a taxing statute 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 look fairly at the
language used." In the revenue satisfied 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 covered within the four
corners of the provision of the taxing statute, no tax can be
imposed by inference or by analogy or by trying to probe into the
intention of the legislature and by considering what was the
substance of the matter.Tax relief application is a mandatory
requirement for refund purpose. It is well settled principle that tax
exemptions are strictly against taxpayers.Tax refunds in the
nature of tax exemption, are resolved strictly against the claimant.

14.  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.“A.V. Fernandez v/s. State if Kerala, [AIR
1957 SC 657]

15.  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."

16.  he claimant in this case simultaneously filed both its application
for relief from double taxation and its claim for refund with the
InternationalTax Affairs Division (ITAD) more than one year from
the payment of its dividends to stockholders.The court noted that
the claimant did not comply clearly with the requirement provided
under Revenue
Memorandum Order (RMO) No. 1-2000 that the availment of tax
treaty relief should be preceded by such application at least 15
days before the payment of dividend. Consequently, the court
denied the claimant’s application for tax refund for failure to
comply with such conditions.
 The Court reiterated its position that an application for tax treaty
relief must be filed prior to any availment of tax treaty provision.

17.  held that such a notification has to be interpreted in the light of
the words employed by it and not on any other basis.This was so
held in the context of the principle that in a taxing statute, there is
no room for any intendment, that regard must be had to the clear
meaning of the words and that the matter should be governed
wholly by the language of the notification, i.e., by the plain terms
of the exemption. some of the provisions of an exemption
notification may be directory in nature and some are of mandatory
in nature. A distinction between provisions of statute which are of
substantive character and were built in with certain specific
objectives of policy, on the one hand, and those which are merely
procedural and technical in their nature, on the other, must be
kept clearly distinguished.