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Commissioner of Gift-tax Vs. Budur Thippaiah - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAndhra Pradesh High Court
Decided On
Case NumberG.T.C. No. 2 of 1971
Judge
Reported in[1976]103ITR189(AP)
ActsGift Tax Act, 1958 - Sections 5(1)
AppellantCommissioner of Gift-tax
RespondentBudur Thippaiah
Appellant AdvocateP. Rama Rao, Adv.
Respondent AdvocateE. Subrahmanyam, Adv.
Excerpt:
.....appearing for the assessee, contended that the comma at the end of the sentence 'to any relative dependent upon him for support and maintenance 'is a disjunctive involving separation of that part of the sentence with the rest 'on the occasion of the marriage of the relative, subject to a maximum of rupees ten thousand in value in respect of the marriage of each such relative 'and, therefore, the construction placed by the tribunal on clause (vii) of section 5(1) is correct and clearly brings out the intention of the legislature. 5. the case of the revenue is that there are two conditions to be satisfied: o'connor [1890] 24 qb 468 lord esher observed :to my mind, however, it is perfectly clear that in an act of parliament there are no such things as brackets any more than there..........of the first part of the sentence. according to the tribunal, that part of the sentence ' to any relative dependent upon him for support and maintenance ' stands by itself and, therefore, the latter part of the sentence cannot be read in conjuction with the first part of the sentence. it is in that view that the gifts made to any relative dependent upon the donor were held to be exempt from the gift-tax.3. mr. e. subrahmanyam, appearing for the assessee, contended that the comma at the end of the sentence ' to any relative dependent upon him for support and maintenance ' is a disjunctive involving separation of that part of the sentence with the rest ' on the occasion of the marriage of the relative, subject to a maximum of rupees ten thousand in value in respect of the marriage of.....
Judgment:

Obul Reddy, C.J.

1. The question referred for our decision under Section 26(6) of the Gift-tax Act by the Income-tax Appellate Tribunal is :

'Whether the gift of Rs. 5,000 made by the assessee to his mother is exempt under Section 5(1)(vii) of the Gift-tax Act, 1958 ?'

2. The facts necessary for determination of the question are these : The assessee was a partner of M/s. Budur Thippaiah & Sons, Rayadrug. He had a sum of Rs. 1,22,217.85 to his credit as on 30th April, 1963, in the books of the said firm. Out of that amount, he made several gifts. We are not, in this case, concerned with the gifts made in favour of his sons and daughters. In addition to these gifts, he made a gift of Rs. 5,000 to his mother and claimed exemption under Section 5(1)(vii) of the Gift-tax Act (hereinafter referred to as ' the Act') as it was made for the maintenance of his mother, who was dependent upon him. The Gift-tax Officer rejected the assessee's plea for exemption and subjected that amount to gift-tax. The assessee then preferred an appeal to the Appellate Assistant Commissioner, who upheld the order of the Gift-tax Officer. On further appeal to the Income-tax Appellate Tribunal, the Tribunal construed Section 5(1)(vii) and held that gifts made to relatives dependent on the donor for maintenance are also exempt in addition to gifts made to dependent relatives at the time of their marriage subject to the exemption limit of Rs. 10,000. In so construing the provision, the Tribunal relied upon the ' comma ' at the end of the first part of the sentence. According to the Tribunal, that part of the sentence ' to any relative dependent upon him for support and maintenance ' stands by itself and, therefore, the latter part of the sentence cannot be read in conjuction with the first part of the sentence. It is in that view that the gifts made to any relative dependent upon the donor were held to be exempt from the gift-tax.

3. Mr. E. Subrahmanyam, appearing for the assessee, contended that the comma at the end of the sentence ' to any relative dependent upon him for support and maintenance ' is a disjunctive involving separation of that part of the sentence with the rest ' on the occasion of the marriage of the relative, subject to a maximum of rupees ten thousand in value in respect of the marriage of each such relative ' and, therefore, the construction placed by the Tribunal on Clause (vii) of Section 5(1) is correct and clearly brings out the intention of the legislature.

4. If we accept the construction placed upon Clause (vii) by the Tribunal and relied upon by the learned counsel for the assessee, it will result in this : A donor can make a gift of a sum not exceeding Rs. 10,000 to any relative, provided he is dependent upon him for support and maintenance. The occasion for making such a gift need not be the occasion of the marriage of a relative who depends upon the assessee for the support and maintenance.

5. The case of the revenue is that there are two conditions to be satisfied: (1) The gift should be to a relative dependent upon the assessee for support and maintenance; and (2) it should be on the occasion of the marriage of such a relative. The absence of the word 'such 'is also relied upon by Mr. Subrahmanyam to contend that, if it were the intention of the legislature that this provision could be availed of only at the time of the marriage of the relative, then the word ' such ' would have been prefixed to the word ' relative ' instead of the word ' the '.

6. Very little importance is attached to punctuation or brackets in the Acts of the British Parliament prior to 1849. In Duke of Devonshire v. O'Connor [1890] 24 QB 468 Lord Esher observed :

'To my mind, however, it is perfectly clear that in an Act of Parliament there are no such things as brackets any more than there are such things as stops.'

7. Dealing with the consequences of punctuation; Maxwell quoted Lord Reid :

' ' Before 1850 there was no punctuation in the manuscript copy of an Act which received the Royal Assent, and it does' not appear that the printers had any statutory authority to insert punctuation thereafter. So even if punctuation in more modern Acts can be looked at (which is very doubtful), I do not think, that one can have any regard to punctuation in older Acts.'. In the same way, the manner in which a statute has been printed, the indentation of the paragraphs and so on, is irrelevant.' (See Maxwell on the Interpretation of Statutes, twelfth edition, page 13).

8. In Pre$ident-of Shire of Charlton v. Ruse [1912] 14 CLR 220 Griffith C.J., observed :

' I think that stops, which may be due to a printer's or proof-reader's error, ought not to control the sense if the meaning is otherwise tolerably clear.'

9. Likewise was the view expressed by Lord Hobhouse in Maharani of Burdwan v. Krishna Kamini Dasi ILR [1887] Cal 365 that it was an error to rely on punctuation in construing the Acts of the legislature.

10. In Veeraraghavulu v. President of the Corporation of Madras ILR [1910] Mad 130 it was however opined that punctuation furnished a clue for the interpretation of the provisions.

11. Sundara Aiyar and Sadasiva Aiyar JJ., in Secretary of State v. Kalekhan [1912] 16 IC 947; AIR 1914 Mad 502 again considered the effect of punctuation on the statutes. They relied upon the consequence of a comma used in the language of the provision which they were construing. The learned judge, Sundara Aiyar, observed :

' There is, no doubt, authority in English cases for this position but no Indian cases had been cited to us, and it may be permissible to express a doubt whether the consideration which induced judges in England to lay down such, a rule would be equally applicable in the construction of statutes in this country. The question, however, does not depend on the punctuation alone.'

12. The learned judge, however, laid great emphasis on the punctuation in the case before them and observed :

' But if this were the meaning, we think more appropriate language would be used to indicate it. The respondent's construction requires in effect the omission of the comma after the word ' Council' and the insertion of one after the word ' officer'. '

13. In Taylor v. Charles Bleach ILR [1914] 39 Bom 182 ; [1915] 27 IC 494 Scott C. J. observed :

' I can see no reason why the punctuation of the editions of the Act issued by the Government of India should be disregarded, for so far as I am aware there is not in India any unpunctuated original Statute Book. '

14. In A. K. Gopalan v. State of Madras, : 1950CriLJ1383 Chief Justice Kania, while construing Sub-clause (7) of Article 22 of the Constitution, expressed the view that :

' The use of the word ' which ' twice in the first part of the sub-clause, read with the comma put after each, shows that the legislature wanted these to be read as disjunctive and not conjunctive.'

15. This opinion has been strongly relied upon by the learned counsel for the assessee to show that the comma occurring here should be read as disjunctive and that is its significance.

16. As Scott L.J., said:

' Where the words of an Act of Parliament are clear, there is no room for applying any of these principles of interpretation, which are merely presumptions in cases of ambiguity in the statute.' (See Croxford Universal Insurance Co. [1936] 1 All ER 151)

17. Again Evershed M.R. said :

' I prefer to avoid exegeses of the statutory language unless they are absolutely necessary : for the result would otherwise tend thereafter to substitute for the problem of construction of parliamentary language the problem of the construction of the judgments of the courts.' (See Bewlay (Tobacconists) Ltd. v. British Bata Shoe Co. Ltd. [1959] 1 WLR 45).

18. Rules of construction are only a guide. The words used have to be understood in their natural sense and meaning. As stated by Lord Goddard C.J. in Barnes v. Jarvis [1953] 1 WLR 649 :

'A certain amount of common sense must be applied in construing statutes. The object of the Act has to be considered.'

19. Therefore, if the words are precise and unambiguous, nothing more is necessary than to interpret those words in their ordinary and natural sense. The words themselves bring out the intention of the legislature.

20. The Supreme Court in Rananjaya Singh v. Baijnath Singh, : [1955]1SCR671 observed :

'The spirit of the law may well be an elusive and unsafe guide and the supposed spirit can certainly not be given effect to in opposition to the plain language of the sections of the Act and the rules made thereunder. Ifall that can be said of these statutory provisions is that construed according to the ordinary, grammatical and natural meaning of their language they work injustice by placing the poorer candidates at a disadvantage the appeal must be to Parliament and not to this court.'

21. The Supreme Court again in Jugalkishore v. Raw Cotton Co. Ltd. AIR 1955 SC 376 observed :

' The cardinal rule of construction of statutes is to read the statute literally, that is by giving to the words used by the legislature their ordinary, natural and grammatical meaning. If, however, such a reading leads to absurdity and the words are susceptible of another meaning the court may adopt the same. But if no such alternative construction is possible, the court must adopt the ordinary rule of literal interpretation.'

22. In Amar Singhji v. State of Rajasihan : [1955]2SCR303 the Supreme Court once again said that recourse to rules of construction would be necessary only when a statute is capable of two interpretations.

23. It is true that, so far as the Acts of Indian legislature are concerned, punctuations in the statutes should not ordinarily be ignored; but the provisions of a statute, when interpreted on the basis of punctuations, should not lead to absurd results so as to defeat the very object of the statute. Commas or punctuation marks cannot control the meaning of the section. As observed by Sulaiman C.J., in Mansa v. Mt. Ancho : AIR1933All521 in construing a statute a court of law is bound to read without the commas inserted in the print.

24. A Full Bench of five judges of the Lahore High Court in Gurmukh Singh v. Commissioner of Income-tax dealing with the comma occurring in Sub-section (3) of Section 23 of the Indian Income-tax Act, 1922, before the words ' on specified points ', observed :

' In the interpretation of statues punctuation, not being a part of the statute to be construed, is not the determining factor and if the proviso as punctuated leads to an absurd result or conflicts with some other provision of the statute which is unambiguous and free from doubt, the punctuation must yield to an interpretation that is reasonable and makes it consistent with the other provisions of the Act.'

25. It is well settled by a long catena of decisions commencing with Heydon's case [1584] 3 Rep 7 a in In re Mayfair Property Co. [1898] 2 Ch 28 that, to arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope and object of the Act.

26. The object of Section 5 is to exempt certain kinds of gifts from gift-tax. All such kinds of gifts, which are exempt from gift-tax, are detailed in Clauses (i) to (xv) of Sub-section (1) of Section 5 of the Act. If it were the intention of Parliament to exempt every gift made to a relative dependent upon an assessee for support and maintenance, it would not have inserted the words 'on the occasion of the marriage of the relative ', in which event it would have mattered very little whether the gift was made on the occasion of the marriage of such a relative or at other times. It was, however, sought to be argued that, if the clause is to be interpreted as being applicable only to gifts made at the time of the marriage of the relative, tben it should deprive young or old relations, even aged parents depending upon an assessee, from being receipients of gifts. Prima facie, the argument looks sound, but such an intention cannot be spelt out from the language of the clause. A scrutiny of the language employed would make it abundantly clear that it is not enough if a relative is merely dependent upon the assessee for support and maintenance, for the assessee to avail of the benefit of this provision, but it could only be made on the occasion of the marriage of such a relative. The absence of the word 'such' before the word 'relative' makes absolutely no difference in so far as the meaning of the clause is concerned. We are, therefore, unable to agree with the Tribunal that the first part of Clause (vii) ' to any relative dependent upon him for support and maintenance ' is distinct and separate part from the other part ' on the occasion of the marriage of the relative ', The clause is not susceptible of such an interpretation. It is not a case where any importance can be given to punctuation in the interpretation of Clause (vii). When there is no ambiguity in the language, the comma used has no particular significance. We are, therefore, of the opinion that the Tribunal was in error in laying stress upon the use of the comma at the end of the first part of the clause. We therefore, answer the reference in the negative and against the assessee. Reference answered accordingly. No costs. Advocate's fee Rs. 250.


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