MAY 15, 2019

By Vijay Kumar

PLEASE have a look at the following provisions of the CGST Act

Section 10 (5): If the proper officer has reasons to believe that a taxable person has paid tax under sub-section (1) despite not being eligible, such person shall, in addition to any tax that may be payable by him under any other provisions of this Act, be liable to a penalty and the provisions of section 73 or section 74 shall, mutatis mutandis, apply for determination of tax and penalty.

Section 21: Where the Input Service Distributor distributes the credit in contravention of the provisions contained in section 20 resulting in excess distribution of credit to one or more recipients of credit, the excess credit so distributed shall be recovered from such recipients along with interest, and the provisions of section 73 or section 74, as the case may be, shall, mutatis mutandis, apply for determination of amount to be recovered.

Section 35 (6): Subject to the provisions of clause (h) of sub-section (5) of section 17, where the registered person fails to account for the goods or services or both in accordance with the provisions of sub-section (1), the proper officer shall determine the amount of tax payable on the goods or services or both that are not accounted for, as if such goods or services or both had been supplied by such person and the provisions of section 73 or section 74, as the case may be, shall, mutatis mutandis, apply for determination of such tax.

Section 129 (2): The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances.

Section 137 (3): Where an offence under this Act has been committed by a taxable person being a partnership firm or a Limited Liability Partnership or a Hindu Undivided Family or a trust, the partner or karta or managing trustee shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly and the provisions of sub-section (2) shall, mutatis mutandis, apply to such persons.

What is this mutatis mutandis ?

I heard a lawyer explaining this to another lawyer. He said that it means identical application. Unfortunately, it does not mean that. On the contrary, it actually means with necessary changes. It means  'the necessary changes having been made'; 'having substituted new terms'; 'with respective differences taken into consideration'; 'With the necessary changes in points of detail'; 'With such change as may be necessary'

In a recent judgement reported by us as 2019-TIOL-180-SC-VAT, the Supreme Court referred to an earlier decision wherein the Court explained the expression "mutatis mutandis" which is to the following effect:

……we have to understand the meaning of the expression 'mutatis mutandis'.

Earl Jowitt's The Dictionary of English Law (1959) defines 'mutatis mutandis' as 'with the necessary changes in points of detail'.

Black's Law Dictionary (Revised 4th Edn., 1968) defines 'mutatis mutandis' as "with the necessary changes in points of detail, meaning that matters or things are generally the same, but to be altered when necessary, as to names, offices, and the like.

Housman v. Waterhouse. In Bouvier's Law Dictionary (3rd Revision, Vol. II), the expression 'mutatis mutandis' is defined as "[T]he necessary changes.

This is a phrase of frequent practical occurrence, meaning that matters or things are generally the same, but to be altered when necessary, as to names, offices, and the like".

Extension of an earlier Act 'mutatis mutandis' to a later Act brings in the idea of adaptation, but so far only as it is necessary for the purpose, making a change without altering the essential nature of the thing changed, subject of course to express provisions made in the later Act.

Section 3(2) of the Act shows that the State legislature intended not to depart substantially from the principal Act except with regard to matters in respect of which express provision had been made in the Act. The assumption made by the High Court that the Act was an independent Act having nothing to do with the principal Act is not correct. The Act only levied some extra sales tax in addition to what had been levied by the principal Act. The nature of the taxes levied under the Act and under the principal Act was the same and the legislature expressly made the provisions of the principal Act mutatis mutandis applicable to the levy under the Act. The additional sales tax was in the nature of a surcharge over and above what was due and payable by an assessee under the principal Act. The Act, though it had a long title, a short title and other usual features of every statute, could not be considered as an independent statute. It had to be read together with the principal Act to be effective. In the circumstances the conclusion reached by the High Court that the two Acts were independent of each other was wrong. We are of the view that it is necessary to read and to construe the two Acts together as if the two Acts are one, and while doing so to give effect to the provisions of the Act which is a later one in preference to the provisions of the principal Act wherever the Act has manifested an intention to modify the principal Act.

The following observations of Lord Simonds in Fendoch Investment Trust Co. v. Inland Revenue Commissioners made in connection with the construction of certain fiscal statutes are relevant here. He said at p. 144:

"My Lords, I do not doubt that in construing the latest of a series of Acts dealing with a specific subject matter, particularly where all such Acts are to be read as one, great weight should be attached to any scheme which can be seen in clear outline and amendments in later Acts should if possible be construed consistently with that scheme."

In another judgement, the Supreme Court observed,

"Thus, the phrase "mutatis mutandis" implies that a provision contained in other part of the statute or other statutes would have application as it is with certain changes in points of detail."

In Fairdeal Polychem case - 2016-TIOL-46-HC-DEL-CUS, it was submitted that the 'rule' of mutatis mutandis is one of adaptation and not of adoption.

In case of Corporation of Calcutta v. Sirajuddin & Ors, the expression "mutatis mutandis" came to be interpreted as:

The expression 'mutatis mutandis' in Section 364(2) of the Calcutta Municipal Act of 1923 is an adverbial phrase qualifying the verb 'shall apply' and meaning 'those changes being made which must be made'. Literally therefore, sub-section (2) of Section 364 means nothing more and nothing less than this that in applying Section 363(2) to proceedings under Section 364(1) those changes must be made which the exigencies of the case may require. Necessarily then no changes need be made where none are called for and even where some changes are called for they must be kept within that bare minimum without which Section 363(2) cannot possibly be applied to the proceedings under section 364(1) regard of course, being had to the nature and the scope of the proceedings to which it has to be applied".

The words 'mutatis mutandis' mean with the necessary changes being made'. Some changes in Section 363(2) are considered by the Legislature necessary, when it is applied to a proceeding instituted under Section 364. In other words, some changes must be made for mutatis mutandis does not mean 'with such changes' if any, as may be necessary but 'with the necessary changes being made'....."

In Upper Doab Sugar Mills case - 2011-TIOL-1009-CESTAT-DEL, the Member(J) of the CESTAT observed,

We do appreciate that the expression 'mutatis mutandis' is not appearing in the notification. But spirit of the notification is to be understood keeping in view the social philosophy attached to the notification.

The same Member in Ajanta Offset case - 2010-TIOL-901-CESTAT-DEL observed,

In absence of Mutatis Mutandis provisions in Rule 27 for adoption of provision in any Rule there cannot be any automatic invocation of jurisdiction which is neither expressly provided nor impliedly patent from the scheme of law.

EQUAL JUSTICE UNDER LAW: I visited the US Supreme Court day before yesterday. Above the main entrance are written these words, "EQUAL JUSTICE UNDER LAW". The Supreme Court is a collegial court of nine judges delivering less than a hundred judgements in a year. On 13.5.2019, when I visited the Court, three judgements were delivered. I was given printed copies of all the three orders immediately after I came out of the Court Hall.

I also attended a sitting of the Senate.

I can only say what applies to the US Senate or Supreme Court does not apply mutatis mutandis to our Rajya Sabha and Supreme Court.

Until next week