Some important legal maxims and their use in taxation & commercial litigation

Introduction

Legal Maxims are the base for learning any jurisprudence. A Legal Maxim is an recognized principle or proposition of law. Latin maxims were developed in the Medieval era in European countries that used Latin as their language in courts of law.

Actori incumbit onus probandi

Sh. Kedar Nath Kohli vs Sh. Sardul Singh on 7 December, 2011  Delhi District Court RCA No. 29/11

It is the settled position of law that it is the duty of the plaintiff/propounder to establish the relevant facts, which constitute the genesis of his claim, by credible evidence. The rule of law is 'actori incumbit onus probandi' i.e. the burden of proof lies on the plaintiff or the prosecution. The plaintiff's case has to stand on its own legs and plaintiff cannot claim his claim to be established on account of the weakness of the defendant's case.

Mr Arvind Kumar vs M/S Care Plus Advisory Services on 24 February, 2015 C.S. No.: 227/14 Delhi District Court

In cases which are exparte, the propounder does not get absolved of its duty to establish the relevant facts, which constitute the genesis of its claim, by some credible evidence. The rule of law is 'actori incumbit onus probandi' i.e. the burden of proof lies on the plaintiff. Mere absence of the adversary does not ipso­facto means that plaintiff has acquiesced in the existence of or the truth of the facts pleaded in the plaint. Such absence of the defendant does not by itself justify a presumption that the plaintiff's case is true.

contemporanea expositio est optima et fortissima in lege

D. Mahesh Kumar vs State Of Telangana, Department of on 16 November, 2016 Andhra High Court W.A.Nos.259 of 2016

The understanding of the Executive regarding the interpretation of a statutory provision does not bind the Court. Contemporanea expositio est optima et fortissima in lege is a maxim meaning Contemporaneous exposition is the best and strongest in the law.  Where the words of an instrument are ambiguous, the Court may call in aid acts done under it as a clue to the intention. (Watcham v. Attorney General of the East Africa Protectorate). Contemporanea expositio is a well settled principle or doctrine which applies only to the construction of ambiguous language in old statutes but not in interpreting Acts which are comparatively modern. Even if persons who dealt with the statute understood its provisions in another sense, such mistaken construction of the statute does not bind the Court so as to prevent it from giving it its true construction. The rule of construction, by reference to contemporanea exposition, must give way where the language of the Statute is plain and unambiguous.

North East Gases Pvt. Ltd. And Anr. vs State Of Assan And Ors. on 12 January, 2007 Gauhati High Court

Equivalent citations: 2007 (2) GLT 341

17. As it is, the best and surest mode of construing an instrument is to read it in the sense, which would have been applied when it was drawn up (Contemporanea Expositio Est Optima Et Fortissima In Lege). Prescription of rental charges at different rates beyond the first 15 days of supply of the cylinders per se therefore in the above conspectus of facts does not establish any transaction evidencing transfer of right of use of the empty cylinders in favour of the dealers/purchasers on a lease to render the amounts realized on that count to be a taxable turnover liable to be assessed and tax under Section 8(1)(f) of the Act.

Impotentia Excusat Legem

Financial Software & Systems vs Assessee on 22 June, 2016 I.T.A. Nos.822, 823 & 824/Mds/2016 Income Tax Appellate Tribunal - Chennai

We find much force in the above contention advanced by the learned counsel appearing for the assessee. Here also, it is a subsequent amendment with retrospective effect. As held by ITAT, Mumbai Bench, in such cases, the assessee is constrained by impossibility of performance. The dictum impossibiliun nulla obligation est, states that there is no obligation to do impossible things. It is to be seen that the law does not compel to do the impossible as enshrined in the principle lex non cogit ad impossibilia. The jurisprudence has also accepted as a basic dictum, impotentia excusat legem, that impossibility is an excuse in law.

Rolcon Engineering Co. Ltd. vs State Of Gujarat And 5 Ors. on 2 March, 2006 Special Civil Application No.2033 of 2004.

If there is impossibility on the part of a person to perform an obligation, law would not expect the person to do that impossible thing. The said maxim, which has been accepted by our judicial system, has been very well explained in 'Broom's Legal Maxims' (10th Edition) as under:

It is then, a general rule which admits of ample practical illustration, that impotentia excusat legem; where the law creates a duty or charge, and the party is disabled to perform it, without any default in him, and has no remedy over, there the law will in general excuse him (t): and though impossibility of performance is in general no excuse for not performing an obligation which a party has expressly undertaken by contract, yet when the obligation is one implied by law, impossibility of performance is a good excuse.

DELEGATUS NON POTEST DELEGARE

The Barium Chemicals Ltd. And Anr vs The Company Law Board 1967 AIR 295        

But the maxim "delegatus non potest delegare" must not be pushed too far. The maxim does not embody a rule of law. It indicates a rule of construction of a statute or other instrument conferring an authority. Prima facie, a discretion conferred by a statute, on any authority is intended to be exercised by that authority, and. by no other. But the intention may be negatived by any contrary indications in the language, scope or object of the statute. The construction that would best achieve the purpose and object of the statute should be adopted.

Prakash Parcel Service Limited vs State Of U.P. & Others on 31 May, 2013 Allahabad High Court

WRIT TAX No. - 1302 of 2011

It has been laid down that the maxim "Delegatus Non Potest Delegare" does not embody a Rule of Law. It will depend upon the construction of Statute and the intention to show whether a discretion conferred by a Statute on any authority is intended to be exercised by that authority and no other. On invocation of language of the Apex Court, the construction that would best achieve the purpose and object of the Statute should be adopted, we find that the form in dispute is to curb the tax evasion and not more than that. It does not cause any tax burden or financial burden on a dealer. The driver or incharge of the vehicle is required to get the down loaded the document in the shape of the form and after filling up the blanks by supplying requisite information which are with him but spread over, in a consolidated form, shall carry the document.

M/S Ngef Ltd vs M/S Chandra Developers Pvt. Ltd. & ... on 29 September, 2005 Supreme Court of India

Appeal (civil)  5199-5201 of 2004 

BIFR had admittedly power to sell the assets of the Company but the High Court until a winding up order is issued does not have the same. BIFR in its order dated 02.08.2002 might have made an observation to the effect that the Company may approach the High Court in case it intended to dispose of its property by private negotiation but the same would not mean that BIFR could delegate its power in favour of the High Court. BIFR being a statutory authority in absence of any provision empowering it to delegate its power in favour of any other authority had no jurisdiction to do so. 'Delegatus non potest delegare' is a well-known maxim which means unless expressly authorized a delegatee cannot sub-delegate its power. Moreover, the said observations of BIFR would only mean that the Company Court could exercise its power in accordance with law and not de'hors it. If the Company Court had no jurisdiction to pass the impugned order, it could not derive any jurisdiction only because BIFR said so.

EXPRESSION UNIUS EST EXCLUSION ALTERIUS

India Medtronic P.Ltd, Mumbai v. Assistant Commissioner of Income-tax- 10(1)(1),  IT(TP)A No.2160/Mum/2017

Income Tax Appellate Tribunal - Mumbai

The aforesaid provision applies to an assessee who is claiming deduction of expenditure while computing his business income. The Explanation provides an embargo upon allowing any expenditure incurred by the assessee for any purpose which is an offence or which is prohibited by law. This means that there should be an offence by an assessee who is claiming the expenditure or there is any kind of prohibition by law which is applicable to the assessee. Here in this case, no such offence of law has been brought on record, which prohibits the pharmaceutical company not to incur any development or sales promotion expenses. A law which is applicable to different class of persons or particular category of assessee, same cannot be made applicable to all. The regulation of 2002 issued by the Medical Council of India (supra), provides limitation/curb/prohibition for medical practitioners only and not for pharmaceutical companies. Here the maxim of "Expressio Unius Est Exclusio Alterius" is clearly applicable, that is, if a particular expression in the statute is expressly stated for particular class of assessee then by implication what has not been stated or expressed in the statute has to be excluded for other class of assessee. If the Medical Council regulation is applicable to medical practitioners then it cannot be made applicable to Pharma or allied health care companies. If section 37(1) is applicable to an assessee claiming the expense then by implication, any impairment caused by Explanation1 will apply to that assessee only. Any impairment or prohibition by any law/regulation on a different class of person/assessee will not impinge upon the assessee claiming the expenditure under this section.

M/S Swastik Gases P.Ltd vs Indian Oil Corp.Ltd on 3 July, 2013 Supreme Court of India CIVIL  APPEAL NO. 5086  OF 2013

13. While doing so, this Court held that when a certain jurisdiction is specified in a contract, an intention to exclude all others from its operation may be inferred; the exclusion clause has to be properly construed and the maxim “expressio unius est exclusio alterius” (expression of one is the exclusion of another) may be applied.

Khemka & Co vs State Of Maharashtra on 27 February, 1975 Supreme Court of India

Equivalent citations: 1975 AIR 1549, 1975 SCR (3) 753

If the provisions relating to penalties, such as those found in the Central Act and the State Acts, are really special provisions which can be invoked in the special ,circumstances given in each statute, we must interpret the reference to penalties in the concluding portion of Section 9(2), preceding the proviso, to relate only to the special provisions relating to penalties ,Provided for specifically in the Central Act. I think that the maxim of interpretation to apply here is "Expressio Unius exclusio alterius". This is explained as follows in Maxwell on the Interpretation of Statutes (12th Edn. p, 293);

"By the rule usually known in the form of this Latin Maxim, mention of one or more things of a particular class may be regarded as silently excluding all other members of the class; expressum facit cessare tacitum".

No doubt this maxim has been described as "a useful servant but a dangerous master". I can, however, think of no kind of case more apt for its application than the one before us. As the Privy Council said long ago, with regard to a statute purporting to impose a charge in Oriental Bank Corporation v. Wright,(1) that in such a case, the rule to be applied is "that the intention to impose a charge upon the subject, must be shown by clear and unambiguous language". If the language leaves room for coming to the conclusion that only penalties specified in the Central Act are enforceable by the machinery for enforcement of liability under the general Sales Tax law of a State, I think that the legislative intent could safely be presumed to be to confine penalties mentioned in the concluding part of Section 9(2)to only those mentioned specifically in the Central Act. For the reasons given above, I respectfully concur with the opinion expressed and the orders proposed by May Lord the Chief Justice.

FALSUS IN UNO FALSUS IN OMNIBUS

Amal Kumar Chakraborty vs Commissioner Of Income-Tax Calcutta High Court  1994 207 ITR 376 Cal

Here, we are to go by the dictum "falsus in uno falsus in omnibus". Though applicable in criminal law, it is a sound principle to apply in taxation when the matter is one of finding of fact on the basis of statements of a witness and their judicial evaluation. It is seen that in 1975, the assessee gave a false statement by stating that he had no connection with the bank deposits. Later he makes a volte face and says that the deposits are from the money supposedly declared in 1971. Therefore, the later statements of the assessee cannot be credited as the source of the deposits.

Prem Singh & Ors vs State Of Haryana on 6 May, 2009 Supreme Court of India

CRIMINAL APPEAL NO. 934OF 2009

13. It is now a well settled principle of law that the doctrine `falsus in uno falsus in omnibus' has no application in India.

In Jayaseelan vs. State of Tamil Nadu [2009 (2) SCALE 506], this Court held:

"The maxim "falsus in uno falsus in omnibus" has not received general acceptance nor has this maxim come to occupy the status of rule of law. It is merely a rule of caution. All that it amounts to, is that in such cases testimony may be disregarded, and not that it must be disregarded. The doctrine merely involves the question of weight of evidence which a Court may apply in a given set of circumstances, but it is not what may be called 'a mandatory rule of evidence."

GENERALIA SPECIALIBUS NON DEROGANT

R.P.C. Industries Ltd. vs Asstt. Cit  
2003 85 ITD 105 Kol
Income Tax Appellate Tribunal - Kolkata

As rightly observed by the learned Accountant Member, whereas section 73 read with Explanation is a specific provision applicable in respect of losses suffered in speculation business, sections 70, 71and 72 are general provisions and thus applying the principle of generalia specialibus non derogant, the special provision in section 73 overrides the general provisions in sections 70, 71 and 72 of the Act. I concur with the reasonings as well as findings of the learned Accountant Member in regard to this particular aspect of the matter. So, however, the contention of the learned counsel for the assessee is that such a provision is subject to the condition that there is nothing in the general provision expressed or implied indicating an intention to the contrary. The learned counsel, as already pointed out, relied upon the decision of the Supreme Court in the case of Shahzada Nand & Sons (supra). On perusal of all the provisions of Chapter VI relating to set off and carry forward of losses I am unable to find, either express on implied, intention of the legislature enabling to overrule the principle of generalia specialibus non derogant therefore, do not find substance in this contention advanced on behalf of the assessee.

Suresh Nanda vs C.B.I on 24 January, 2008 Supreme Court of India Appeal (crl.)  179 of 2008 

5. In our opinion, even the Court cannot impound a passport. Though, no doubt, Section 104 Cr.P.C. states that the Court may, if it thinks fit, impound any document or thing produced before it, in our opinion, this provision will only enable the Court to impound any document or thing other than a passport. This is because impounding a passport is provided for in Section 10(3) of the Passports Act. The Passports Act is a special law while the Cr.P.C. is a general law. It is well settled that the special law prevails over the general law vide G.P. Singh's Principles of Statutory Interpretation (9th Edition pg. 133). This principle is expressed in the maxim Generalia specialibus non-derogant. Hence, impounding of a passport cannot be done by the Court under Section 104 Cr.P.C. though it can impound any other document or thing.

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