NDLI: Union of India & Ors. Vs. Exide Industries Limited & Anr.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Income Tax Act Accounting
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Finance Act, 2001 (14 of 2001) Income Tax Act, 1961 (43 of 1961) Companies Act, 1956 (1 of 1956)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 Referred Case 10 Referred Case 11 Referred Case 12 Referred Case 13
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Income Tax Act, 1961:s. 43B(f) (as inserted by Finance Act, 2001) – Liability under leave encashment scheme – Subjected to exception u/s. 43B by inserting Clause (f) to s. 43B – Constitutional validity of – Held: s.43B is not an embargo upon the autonomy of the assessee in adopting a particular method of accounting, nor deprives the assessee of any lawful deduction – It merely operates as an additional condition for the availment of deduction qua the specified head – The only effect of insertion of clause (f) is to regulate the stated deduction by putting it in a special provision – The assessee has neither made a case of non-existence of competence nor demonstrated any constitutional infirmity in Clause (f) – s.43B (f) is held to be constitutionally valid and operative for all purposes.s.145 – Method of accounting – Is a prerogative falling in the domain of the assessee – However, the autonomy of assessee in adopting a system of accounting is controlled by the regulation notified by the Central Government.Judicial Review: Legislative enactment – Constitutionality – Determination of – Held: In exercise of judicial review, the Court starts with a basic presumption in favour of constitutionality – While testing the constitutional validity of a provision, the Court is to inspect the existence of enacting power, and once such power is found to be present, the next examination is to ascertain whether the enacted provision impinges upon any right enshrined in Part III of the Constitution – While adjudicating constitutionality of a duly enacted provision, Court cannot venture into hypothetical spheres –Unfounded limitation cannot be read into the process of judicial review – The process of testing constitutional validity is not to sneak into the prudence or proprieties of the legislature in enacting the impugned provision, nor to examine the culpable conduct of the legislature as an appellate authority over the legislature – The role of the Court is restricted to the finding of a constitutional infirmity in the provision, as it is placed before the Court.Fiscal statutes – Judicial review of – The approach of Constitutional Courts ought to be different while dealing with fiscal statutes – The general principles of exclusion and inclusion do not apply to taxing statutes with the same vigour unless the law reeks of constitutional infirmities – A larger discretion is given to the legislature in taxing statutes than in other spheres.Legislation: A law when declared to be invalid, by Court, legislature is free to diagnose such law and alter the invalid elements thereof – In doing so, the legislature is not declaring the opinion of the Court to be invalid.Interpretation of Statutes: Non-obstante clause – Interpretation of – Held: A nonobstante clause assumes an over-riding character against any other provision of general application. Objects and reasons of the statute – As an aid to interpretation of statute – Nature of – When the Court examines the validity of a provision, its primary concern is literal text of the provision – This constitutes first test of interpretation – Interpretation of statute cannot be unrelated to the nature of the statute – Objects and reasons of the Statute are the external aids to the interpretation and can be looked into for a limited purpose in the process of interpretation, especially when the Court is sitting over the interpretation of an ambiguous provision – The Court is not bound by such external elements – Therefore, the presence or absence of objects and reasons have no impact upon the constitutional validity of a provision as long as the literal features of a provision enable the Court to comprehend its true meaning with sufficient clarity
Judge	Hon'ble Mr. Justice A.M. Khanwilkar
Neutral Citation	2020 INSC 350
Petitioner	Union Of India & Ors.
Respondent	Exide Industries Limited & Anr.
SCR	[2020] 7 S.C.R. 1
Judgement Date	2020-04-24
Case Number	3545

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