Law of Evidence not special for fiscal laws

This is an old subject but recently some fresh observations have been made by the Supreme Court in the case of Mauri Yeast India Pvt. Ltd vs State of UP. The issue involved in this case under the UP Trade Tax Act, 1948, was about the classification of yeast under the heading chemical. However, while arguing the case the question arose about the burden of proof that it was a chemical. Revenue argued that having regard to the provision containing under Section 101 of the Indian Evidence Act, the burden could be on the assessee. The Supreme Court observed that "the provisions of the Evidence Act have no application". It is on this observation that I am writing this treatise now. My respectful submission is that the Indian Evidence Act is undoubtedly applicable to fiscal statutes as well. This general observation of the SC that the Evidence Act has no application (obviously for fiscal statutes) is not exactly born out by its own previous judgements that fiscal statutes are no exception to general statutes. In the case of CIT vs Shahzada Nand & Sons the court observed: "The fundamental rule of construction is the same for all statutes whether fiscal or otherwise". In the case of Commissioner of Wealth Tax vs H. Begum the Supreme Court quoted with approval the judgement in the case of Lord Russel of Killowen in Attomey General v. Carlton Bank which is as follows: "I see no reason why special canons of construction should be applied to any Act of Parliament, and I know of no authority for saying that a Taxing Act is to be construed differently from any other Act. The duty of the Court is, in my opinion, in all cases the same, whether the Act to be construed relates to taxation or to any other subject,..." In the present case of Mauri Yeast vs State of UP although the observation of the SC is general, it has been made in the context of burden of proof. So the SC could have meant that the Section 101 of the Indian Evidence Act does not apply to fiscal statutes. If that is the limited meaning that we attribute to the general observation of the Supreme Court, then also the limited meaning is not fully in consonance with other judgements. Section 101 is the following: "Burden of Proof – Whoever desires any court to give judgement as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist. When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person". This is a general principle. However, in the case of fiscal statutes the Burden of Proof has followed some special principles. The exigibility of goods or the classification of the goods under a tariff entry is the burden on the Revenue, as held by the SC and several cases. Still in all these judgements the SC has observed that Revenue can ask for the basic facts relevant for classification. And in case of exemption, the burden is squarely on assessee. The conclusion is that if the observation of the Supreme Court regarding Section 101 is taken as a general observation, then it is against the accepted law laid down by the court itself earlier. Even if it is taken only for relating to Burden of Proof, then also it cannot be said that the law about Burden of Proof is inapplicable to fiscal statutes. Only they are some what modified. By Ms.Bobby Aanand, Metropolitan Jury.

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