Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: VAT Audit :: articles on VAT and GST in India :: empanelment :: form 3cd :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: VAT RATES :: cpt :: due date for vat payment
News Headlines »
 How to save income tax? Best tips for young earners
 Forgot to verify your income tax return? Here's help
 Notification of Government e-Marketplace (GeM) under section 138 of the Income-tax Act
 Income tax returns can be filed even if you missed deadline
 What is the difference between a tax return and a tax refund?
 Improving tax compliance in India
 How to invest in the new LTCG tax regime
 5 Tips to help you save tax
 Why to file income tax return?
  Income Tax For Individuals – Assessment Year 2019–20
 RBI mentions 5 tax implications on investments and savings

Principle of equity in legal interpretation
November, 05th 2007
In one of the latest judgments, the Supreme Court has reiterated the principle of equity that is the rule of fairness. This principle was not always followed earlier.
The earlier attitude was that nothing should be read into the words of law. The attitude towards interpretation in favour of fairness and equity developed in later years in the judgments of the Supreme Court.
In the case of Empire Industries vs UOI, 1985 (20) ELT 179 (SC), while the Supreme Court held that in some cases hardship may result in a particular interpretation but that would not influence Court in the construction of statute, the Court hastened to add that in this particular case there was no hardship.
More and more judgments came from the Supreme Court, which underlined the importance of equity in an interpretation. The theory came to be crystallised that if there is only one interpretation and no other, and that interpretation is not in favour of equity, then the Court has to adopt that interpretation. However, if there are two possible interpretations, the one leading to hardship and another in favour of equity, the latter should be preferred.
On principle, equity is no part of law but a moral virtue which qualifies and moderates the rigor, hardness and edge of the law and is an universal truth. It also assists the law where it is defective and weak in the construction, which is the life of law. It also defends the law from crafty evasion, delusions and subtleties, invented and contrived to evade and delude the common law.
In this case of ONGC Ltd Vs. Commissioner of Customs, Mumbai (2007(215) ELT 166 (SC), the issue was that a certain claim of exemption was denied at the original stage but granted later by the Apex Court The rate of 12 per cent asked for by the ONGC was not agreed to. The Supreme Court further held that this entitlement to interest on the amount deposited is on the basis of the application of the principle of restitution.
Several interesting issues arise from this judgment of the Supreme Court.
Firstly, it is not a matter of Customs law but one of the principles of restitution. So it is clear that this principle cannot be applied in any indirect law per se. This principle laid down by the Supreme Court would be applicable only if it is a case of restitution, on which the jurisdiction can only lie with the Court and not with the Executive.
Secondly, the rate itself is subject to fixation by the Court. There is no fixed rate in any law. If the Court had ruled that the actual borrowing or lending rates from the banks would be applied that would mean a measurable amount. Whereas the ONGC asked for 12 per cent interest while the Supreme Court granted 6 per cent without giving any hint to the basis of this fixation. Therefore the rate of interest has been left to uncertainty and to the discretion of the Supreme Court.
Thirdly, in the decision of the Supreme Court to consider equity, a major component is the fact that the ONGC is a public sector undertaking. It gives the impression that the principle of equity would not apply in the case of private companies.
The conclusion is that this decision of the Supreme Court in regard to equity is a qualified one and cannot be applied in general to all companies even if the circumstances of those cases are exactly or substantially equal to those of the present case. It can hardly be cited as a precedent which all Supreme Court judgments are.

Sukumar Mukhopadhyay
Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Achievements

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions