Introduction
“Statute law is the will of the Legislature; and the object of all judicial interpretation of it is to determine what intention is conveyed, either expressly or by implication, by the language used, so far as it is necessary for determining whether the particular case or state of facts presented to the interpreter falls within it.” – Maxwell on the interpretation of statutes
It is often said that “Judges ought to remember that their office is jus dicere and not jus dare, to interpret law and not to make law, or give law”. Interpretation is the art of finding out the true sense of words. When interpreting a statute, judges may use both internal and external aids, apart from legal doctrines, maxims, interpreting rules etc, to help them understand the meaning and purpose of the law. An Aid is a device that helps or assists. These are the mechanisms that help to appreciate the true meaning of the statute.
This paper is an endeavour to find out the true meaning of “proviso”, one of the internal aids to interpret the statute, and its implication and consequences.
Internal Aids
Internal aids to interpretation are the tools or materials found within the statute itself that can help in interpreting the meaning and purpose of a particular provision or section of the statute, though they may not be part of enactment. These internal aids include, long title, preamble, headings, marginal notes, illustrations, punctuation, proviso, schedule, transitory provisions, etc.
Proviso
In some sections of a statute, after the main provision is spelled out, a clause is added, with the opening words “provided that…” The part of the section commencing with the words “Provided that…” is called Proviso. Basically a proviso is a clause which is added to a section to accept something from enacting clause or to limit its applicability. The proviso has no independent existence; it is totally dependent on the main enactment. If the main enactment is repealed by the court, the provision of that enactment will also be repealed automatically.
Interpretation of proviso
A “Proviso” can be interpreted in many ways. Different courts of law have analysed the proviso in such a way so that its enactment is given full effect. Further, it is also treated in such a manner so that it does not become redundant. But there is no guideline in any judgement as to when a particular interpretation is the proper interpretation. It all depends upon the context and object.
As such, the function of a proviso is to qualify something or to exclude, something from what is provided in the enactment which, but for proviso, would be within the purview of enactment.
1. PROVISO is to except something out of the enactment or to qualify something enacted therein which but for the PROVISO would be within the purview of the enactment- [Kedarnath Jute Manufacturing Co. Ltd. v. Commercial Tax Officer, AIR 1966 SC 12]. When one finds a proviso to a section the natural presumption is that, but for the proviso, the enacting part of the section would have included the subject-matter of the proviso.
The definition of “consideration” u/s 2(31) of the CGST Act, 2017 can be a good example. For ready reference, the definition is reproduced below:-
Section 2 (31) “consideration” in relation to the supply of goods or services or both includes ––
(a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government;
(b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government:
Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply.
Deposits would be considerd to be consideration when the “supplier applies the deposit ‘as’ consideration”, otherwise deposit is excluded from the definition of “consideration.” Had the Proviso not used to the clause (31), then any deposit given in respect of the supply will come under the ambit of consideration for such supply. The function of proviso in this case is to qualify or carve out an exception to the main provision.
Similarly, first proviso to sub-section(1) of section 22 of CGST Act,2017, creates an exception for the special category states by reducing the threshold aggregate turnover limit from twenty lakh rupees to ten lakh rupees to get registered.
Again, the second proviso to sub-section (1) of section 22, makes another exception to the first proviso by empowering the Government to enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees, at the request of a special category State and on the recommendations of the Council, and subject to such conditions and limitations, as may be so notified.
Over again, the third proviso to that above sub-section craves out another exception by authorising the Government to enhance the aggregate turnover from twenty lakh rupees to such amount not exceeding forty lakh rupees in case of supplier who is engaged exclusively in the supply of goods.
Therefore, all the provisos create an exception to the main enactment.
2. It is a cardinal rule of interpretation that a proviso to a particular provision of statute only embraces the-field which is covered by the main provision. It carves out an exception to the main provision to which it has been enacted as a proviso and to no other – M/s Ram Narain Sons Ltd. v. Asst. Commissioner of Sales Tax and others, [1955]2 SCR 483. A proviso does not travel beyond the provision to which it is a provision.
It was, therefore, held that the proviso appended to article 286(2) of the Constitution authorising the president to lift the ban imposed by the said provision was not available to lift the ban imposed by Article 286(1).
Likewise, the proviso appended to sub-section (4) of Section 37 of the CGST act, 2017 authorising the Government to allow a registered person or a class of registered persons to furnish the details of outward supplies under sub-section (1), even if he has not furnished the details of outward supplies for one or more previous tax periods, does not available to the proviso appended to sub-section (10) of section 39.
It is a cardinal rule of interpretation that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision. It should be construed to the section to which it is appended.
3. In Union of India v. Dileep Kumar Singh, it has been held that though a proviso does not travel beyond the provision to which it is appended, golden rule is to read the whole Section, inclusive of the proviso in such manner that they mutually throw light on each other and result in a harmonious construction.
4. In Commissioner of Commercial Taxes … vs. Ramkishan Shrikishan Jhaver [AIR 1968 SC 59 A, 1967 66 ITR 664 SC, 1967 20 STC 453 SC], the officers of the Commercial Tax Department raided the premises of a company and seized a suit-case on information that it contained secrete accounts of the company. It was contended that on a proper construction of Section 41 of the Madras General Sales Tax Act, the officers of the Department had no authority to search the premises and seize either the account books or the goods found therein.
The section reads thus:
Section 41
(1)……
(2) All accounts, registers, records and other documents maintained by the dealer in the business, the goods in his possession and his offices, shops go-downs, vessels or vehicles shall be open to Inspection at all reasonable times by such officer:
Provided that no residential accommodation (not being a place of business-cum-residence) shall be entered into and searched by such officer except on the authority of a search warrant issued by a Magistrate having jurisdiction over the area, and all searches under this sub-section shall so far as may be, be made in accordance with the provisions of the Code of Criminal Procedure, 1898 (Central Act 5 of 1898).
The high court held that the main provision did not provide for search of a purely residential accommodation and hence the proviso was otiose and therefore the officer could not search. Allowing the appeal, it was held by the Hon’ble Supreme Court:
Let us now see what light is thrown on the interpretation of sub section (2) by the proviso and whether we have put on the main part of sub section (2) is supported by the proviso. Generally speaking, it is true that the proviso is an exception to the main part of the section; but it is recognised that in exceptional cases a proviso may be substantive proviso itself. It seems to us that the proviso under consideration now is of this exceptional nature. As we have already held, there is no provision in the main part of the sub-section for searching purely residential premises. Therefore when the proviso provides for such search it is providing for something independent of the main part of the sub-section. Further the second part of the proviso which talks of searches made under this sub-section shows that the power of inspection provided in the main part of the sub-section is tantamount to a power of search. We may in this connection refer to the following passage in Maxwell on Interpretation of Statutes, eleventh edition, at page 155, where it is observed:
“There is no rule that the first or enacting part is to be construed without reference to the proviso. The proper course is to apply course is to apply the board general rule of construction, which is that a section or enactment
must be construed as a whole, each portion throwing light, if need be, on the rest. The true principle undoubtedly is that the sound interpretation and meaning of the statute, on the view of the enacting clause, saving clause and proviso, taken and construed together is to prevail.”
But even without looking at the proviso, our conclusion is that the main part of the sub-section (2) provides for searches and the provision merely enforces that conclusion.
5. A proviso may sometimes contain a substantive provision. To read a proviso as providing something by way of an addendum or as dealing with a subject not covered by the main enactment or as stating a general rule as distinguished from an exception or qualification is ordinarily foreign to the proper function of a proviso. But this is only true for a real proviso. The insertion of a proviso is not always strictly adhered to its legitimate use and at times a section worded as a proviso may wholly or partly be in substance a fresh enactment adding to and not merely excepting something out of or qualifying what goes before.
For instance, the second provision appended to sub-section (2) of Section 16 of the CGST Act,2017 may be construed as a substantive provision where it is provided that “where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon.” This proviso does not seem to a qualification or an exception to the main enactment goes before. It serves as an independent provision.
6. Except as to cases dealt with by it, a proviso has no repercussion on the interpretation of the enacting portion of the section so as to exclude something by implication which is embraced by clear words in the enactment. So, if the language of the enacting part of the statute does not contain the provisions which are said to occur in it, no stipulation can be derived by implication from a proviso. So when on a fair construction the principle provision is clear, a proviso cannot expand or limit it.
7. A proviso will not be normally construed as reducing the purview of enactment to a nullity or to take away a right clearly conferred by the enactment but it has been held that if a proviso on its true construction is directly repugnant to the purview, the proviso shall stand and be a repeal of the purview, as it speaks the last intention of the makes.
8. On similar logic, it has also been held that if out of two provisos, the later is repugnant to the earlier one, the later prevails.
9. In Commissioner of Income-tax, Bhopal v. M/s. Shelly Products, the Supreme Court:
- While interpreting the proviso to Section 240 of the Income-tax Act, 1961 clarified that where a proviso consists of two parts, one part may be declaratory but the other part may not be so.
- Therefore, merely because one part of the proviso has been held to the declaratory, it does not follow that the second part of it is also declaratory.
- Since proviso (b) to Section 240 of the Act is declaratory, it was held to be retrospective in operation.
Conclusion
To sum up, the observation of Fazal Ali J. in S. Sundaram Pillai v. V.R. Pattabiraman, [(1985) 1 SCC 591 is worth mentioning here. The Hon’ble justice has observed that by and large a proviso may serve the following four different purposes:
(1) it may qualify or except certain provisions from the main enactment;
(2) it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable;
(3) it may be so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and
(4) it may be used merely to act as an optional addenda to the enactment with the sole object of explaining the real intendment of the statutory provision.”
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