Statutes Must Be Interpreted In A Just, Reasonable And Sensible Manner: Supreme Court

A statute must be interpreted in a just, reasonable and sensible manner, the Supreme Court observed while dismissing Special Leave Petition against a Rajasthan High Court judgment.

In this case, the contention of the SLP petitioner [Commercial Taxes Officer] was that a single transaction of purchase of a motor vehicle does not bring a person within the definition of "Casual Trader" under Rajasthan Tax on Entry of Motor Vehicle into Local Areas Act 1988. According to it, "Casual Trader" envisages occasional transactions of business involving buying and selling of goods and therefore plurality of transactions is a condition precedent for treating a trader as a "Casual Trader". The contention therefore was that since there was only a single transaction in this case, the assessee could not be termed as a 'casual trader'. The High Court had upheld the Appellate Authority order which set aside the Assessment Order holding that the assessee was a "Casual Trader" and, therefore, the limitation for passing an Assessment Order against him was only 2 years from the date of the transaction.

The Legislature could not, possibly, have intended that a person making 2 or 3 transactions should be treated as a "Casual Trader", but a person making only one transaction should be treated at par with regular traders, the bench comprising Justices Indira Banerjee and Sanjiv Khanna said disagreeing with the petitioner's contentions.

The court noted that the definition of casual trader in the Act makes it clear that a person with occasional transactions of buying/selling are to be treated as casual traders, for whom a shorter time limit for assessment has been imposed under Section 10B(iii) read with Section 10A of the Rajasthan Sales Tax Act 1954. 

Referring to observations made by Justice Venkatarama Aiyar in Tirath Singh v. Bachittar Singh AIR 1955 SC 830, the bench observed:

It is well settled that in construing a statutory provision, words in the singular are to include the plural and vice versa, unless repugnant to the context in which the expression has been used, as provided in Section 13(2) of the General Clauses Act, 1897 and provisions identical thereto in State enactments pertaining to General Clauses. ..The Court must interpret a statute in a manner which is just, reasonable and sensible. If the grammatical construction leads to some absurdity or some repugnancy or inconsistency with the legislative intent, as may be deduced by reading the provisions of the statute as a whole, the grammatical construction may be departed from to avoid anomaly, absurdity or inconsistency.

Following observations made in Tirath Singh are quoted in the judgment:

"Where the language of a statute, in its ordinary meaning and grammatical construction, leads to a manifest contradiction of the apparent purpose of  the enactment, or to some inconvenience or absurdity, hardship or injustice, presumably not intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence." 

Observing thus, the bench dismissed the SLP.

Case: Commercial Taxes Officer, Circle-B, Bharatpur vs. M/s Bhagat Singh [Special Leave Petition (C) No.15870/2020]

Coram: Justices Indira Banerjee and Sanjiv Khanna 

Counsel: Adv Vishal Meghwal, AOR Milind Kumar 

Citation: LL 2021 SC 44

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