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2020 ] NOTIFICATION — WHEN PROSPECTIVE/ RETROSPECTIVE A195

Notably, many years ago, Lord Cairns in Partington v. Attorney-General [(1869) LR
4 HL 100] famously observed that :
“As I understand the principle of all fiscal legislation it is this: If the person
sought to be taxed comes within the letter of the law he must be taxed, how-
ever great the hardship may appear to the judicial mind to be. On the other
hand, if the Crown, seeking to recover the tax, cannot bring the subject within the let-
ter of the law, the subject is free, however apparently within the spirit of the law the
case might otherwise appear to be.”
Thus, in case there arises any ambiguity/doubt regarding the exigibility of the
subject then, such confusion has to be resolved in the favour of assessee as no tax
can be imposed on the subject by way of implication. This view is further sup-
ported by long-standing settled position of law which is reflected in the follow-
ing four observations made by Hon’ble Supreme Courts :
(1) In Billings v. U.S. [232 U.S. 261, at p. 265 : 34 S. Ct. 421 (1914)],
Hon’ble Supreme Court (USA) clearly acknowledged this and ob-
served that :
“Tax Statutes... should be strictly construed, and, if any ambiguity
be found to exist, it must be resolved in favor of the citizen.”
(2) In United States v. Merriam [MANU/USSC/0315/1923 : 263 U.S.
179 : 44 S. Ct. 69 (1923)], Hon’ble Supreme Court (USA) clearly stat-
ed at pp. 187-88 that :
“On behalf of the Government it is urged that taxation is a practical
matter and concerns itself with the substance of the thing upon
which the tax is imposed rather than with legal forms or expres-
sions. But in statutes levying taxes the literal meaning of the words
employed is most important, for such statutes are not to be extend-
ed by implication beyond the clear import of the language used. If
the words are doubtful, the doubt must be resolved against the Govern-
ment and in favor of the taxpayer.”
(3) In Vatika Township Private Limited [Supra note 15], Hon’ble Supreme
Court observed that :
“If the concerned provision of the taxing statute is ambiguous and
vague and is susceptible to two interpretations, the interpretation
which favours the subjects, as against there the revenue, has to be
preferred.”
(4) Commissioner of Income Tax, Patiala and Ors. v. Shahzada Nand & Sons
and Ors. [(1966) 3 SCR 379]
“10. Before we advert to the said arguments, it will be convenient
to notice the relevant Rules of construction. The classic statement of
Rowlatt, J., in Cape Brandy Syndicate v. IRC [(1921) 1 KB 64, 71] still
holds the field. It reads :
“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.”
To this may be added a rider : in a case of reasonable doubt, the
construction most beneficial to the subject is to be adopted.”

EXCISE LAW TIMES  15th June 2020  41