THE TRAGIC TRAIT OF THE U.S.-LED PRESENT-DAY WORLD

THE TRAGIC TRAIT OF THE U.S.-LED PRESENT-DAY WORLD

THE CLASH OF CIVILIZATIONS

 

Note: Please read this extract from my Autobiographical Memoir, On the Loom of Time  pp. 385-387. We all wish well of humanity.

 

“The article on ‘International Relations’ in the Encyclopedia Britannica (Vo. 21 p.897: the 15th ed.) concludes with the following observations:

“that the world might soon be rent by a “clash of civilizations” pitting the democracies against militant Islam and an imperial China; by the spread of “chaos” as millions of refugees from the southern half of the world invaded the wealthy lands of the north; by ecological and demographic disasters touched off by the spread of industry and disease in the developing world; or by the spread of nuclear and missile technology into the hands of terrorists.”

It is most unfortunate that a lot of foolish persons have theorized pretending to provide intellectual underpinnings to the ideas which have the inevitable effect to aggravate this “clash of civilizations” On 26 August 2005 I addressed a gathering of intellectuals, presided over by Justice D. P. Wadhwa, a former Judge of the Supreme Court of India, at the India International Centre, New Delhi on the occasion of the release of my book, The Judicial Role in Globalised Economy.I mentioned in my speech how hubris of the capitalism’s think-tanks led Francis Fukuyama, in The End of History and the Last Man (1992), to consider the liberal democracy of the Globalised Economy of our day as the ‘endpoint of mankind’s ideological evolution’. I said:

“It is said that the civilization of India, Pakistan, Iran, Malaysia, and Indonesiais medieval and decaying. Arrogance reaches its nauseat- ing height when it is shamelessly stated that Christianity is more “evolved” than other religions and philosophies. The days have gone when Bloomfieldconsidered Panini the greatest monument of human intelligence, when Frederich Schlege marveled at Indian philosophy and Schopenhauer (1788-1860) preferred religions of India. Gone are days when Spangler and Toynbee saw great light in the East, when Aldus Huxley and Isherwood found in the Vedant the culmination of human thought, when T.S. Eliot and Somerset Maugham got most stimulating and illuminating thought in Indian Literature. To think of the breakup of theUSSR as an evidence of the global triumph of free- market economy is flawed.”

The theory pertaining to the ‘clash of civilizations was developed, in the early years of 1990s, with a measure of paranoia by Huntingtonin The Clash of Civilizations and the Remaking of World Order (1996). The neoliberal thinkers were angry with those civilizations which had austere commitments to their values which made those societies the potential challengers of the present-day consum- erist society of the West. It seems that whilst they intended to use Christianity to promote their brand of capitalism (as they had done right from the heydays of the Roman Catholic Church), they feared the passionate commitment of the Hindus and the Muslims to their values, and religious thoughts capable to enable them to withstand all the strategies of the neoliberals and the global corporations. They know that the Hindus are largely introverts. The Hindus have great inner strength to remain faithful to their values, but are, when all is said, conspicuously deficient

 

385

 

 

in assertive responses to challenges. The Islamic society has had enormous inner strength of deep commitments and also external assertiveness turning into combativeness.

My reflections have led me to conclude that the whole idea of the ‘clash civilizations’ is baseless, mischievous, and unfortunate. As a student of world’s major civilizations, I am of the considered view that civilizations never clash: they co-exist enriching each other through interactions. Clashes are brought about only by those who use cultural values (of which one species is ‘religion’) for extraneous and unworthy purposes. The great Islam, in itself, is perfect, and is; capable of promoting peace and welfare of people under the aspects of justice. I have developed my position on this point in Chapter 20 in the Section dealing with ‘Krishnaand Muhammad’. The ideas of Jesus are as great as those of the Qur’an, or of the Bhagavad-Gita. The imperialists had used Islam or Christianity for their own purposes in the changing contexts of history right from the Middle Ages.

It is extremely saddening and most unfortunate that some of us exhibit idiocy which might aggravate cleavage between, or amongst, the great civilizations of modern times. I read with shock and surprise in Chomsky’s Hegemony or Survival (at p. 160) that some Western powers saw Hindus and Jews (plus Christian) as forming a ‘strategic alliance’ against Islam and Confucianism.”37  It is unwise to think that way. The Hindus, the Islamic people, and Christians must live to co- exist and promote peace and justice. We must treat the story of crusade closed, and closed for ever, and wholly forgotten. Our tender modern world would remain disturbed, running the risk to turn into smithereens, unless we resist the emergence such ideas.

To Octavio Paz it was a surprise that Hinduism and Islam have co-existed over centuries. “Between Islam and Hinduism there is not only an opposition, but incompatibility.”38   But his surprise was only on account of ignorance of facts. I have dealt with the factors in Chapter 20 to show how Hinduism and Islam are the fraternal faiths.. Paz wondered how the monotheism of Islam could co-exist with the polytheism of Hinduism. I wish someone would have told him that Hinduism’s most fundamental idea is absolute monism of Brahma. Other gods are themselves the creations subject to the cyclic process in time. Shankaracharya believed in absolute monism. But such metaphysical differences easily get dissolved in harmony. Paz should have considered why Christianity and Islam, the two flowers of the same tree, have carried on conflicts which seem unresolved even to-day. I pray to God that our world leaders and the intellectual heavy- weights would have the wisdom to see the pros and cons before they brag such things. The French Emperor could have solved his people’s problems, and saved his own head during the French Revolution. But he did not do that: and there was a deluge that washed him away. Nehru has insightfully commented on the Fall of Bastille in the French Revolution:

“It is curious how these people become even more foolish as the crisis deepens, and thus help in their destruction. There is a famous Latin saying which just fits them —-quem dues perdere vult, prius dementat, whom God wishes to destroy, he first makes mad. There is an almost exact equivalent in Sanskrit —-vinash kale viparit buddhi.”39

 

 

386

 

 

 

In the Mahabharata the great Vyasa tells  Arjuna:  vinash  kale  viprit a  buddhi   (when bad times come, wisdom and intelligence depart).

In fact, the grammar of the Bhagavadgita is fully shared by Islam at the fundamentals. Rather, I believe that there is no religion in the world, no scientist anywhere, that does not share the vision of life and the creation that we get in the shlokas 18 and 28 of the Chapter 11of the Bhagavadgita. Their import has been thus rendered into English by Dr. S. Radhakrishnan: to quote —

“Thou art the Imperishable, the Supreme to be realized. Thou art the ultimate resting-place of the universe; Thou art the undying guardian of the eternal law. Thou art the Primal Person, I think.” (Chapt. XI.18)

“As the many rushing torrents of rivers race towards the ocean, so do these heroes of the world of men rush into Thy flaming mouths.” (Chapt. XI.28)

Advertisements

FDI & Our Consolidated Fund

We are being taught in these locust-eaten years that our constitutional mission is not expressed in our Constitution, but in the writings Prof. Hayek, Milton Friedman and all those who reject the ideas of ‘social justice’ and ‘equality’. The worst specimen of the Devil quoting scriptures is when their devotees and the propagandists invoke our Constitution only to break its heart. Lavng the larger issues for later days, let me reflect on the FDI to see whether it is an unalloyed boon, or an outright bane.
Joseph Stiglitz has an undoubted authority to speak on the relevance of FDI, and he has posed serious embarrassing questions about it in his Globalization and its Discontents. Some of his points are cryptically quoted from that book for my readers to reflect on them to draw, and to appraise what follows from them. Stiglitz says:

“There is more to the list of legitimate complaints against foreign direct investment. Such investment often flourishes only because of special privileges extracted from the government.”
“The foreign direct investment comes only at the price of undermining democratic processes. This is particularly true for investments in mining, oil, and other natural resources, where foreigners have a real incentive to obtain the concessions at low prices.”

‘There is more to the list of legitimate complaints against foreign direct investment. Such investment often flourishes only because of special privileges extracted from the government. While standard economics focuses on the distortions of incentives that result from such privileges, there is a far more insidious aspect: often those privileges are the result of corruption, the bribery of government officials. The foreign direct investment comes only at the price of undermining democratic processes. This is particularly true for investments in mining, oil, and other natural resources, where foreigners have a real incentive to obtain the concessions at low prices.” (at p. 71

The way FDI is invited in our country, and the way it operates in our economy, is, it seems on good grounds, only designed to help the extractive investors, who reap short-range profits somehow, and vanish without any loyalty for our country. What goes into the productive process that too becomes worrisome as its maximum benefits are reaped by a few only. A lot of that is siphoned off to other jurisdictions, some of which are brought back through layerings facilitated by corporate structures from the foggy lands and misty space, about which I shall have many things to say in some other articles.
It is time for us to consider that the effect of more and more FDI is to make a small band of creatures amass lot of wealth trying to appease the critical eyes by theorizing on the ‘trickle down effect of their wealth’. If the tax laws are bent to promote FDI, a horrendous consequence would ensue. The rich would get richer, but the Consolidated Fund of India is likely to suffer unless we believe that by providing abundant cake to the rich, the poor can hope to get some scrums sometimes someday. The judgment is likely to promote neo-liberalism, rather than the vision of the constitutional socialism dear to our Constitution. It would delight those who believe in neo-constitutionalism, and the neo-liberal agenda of the Economic globalization. This point can be appreciated if we keep in mind the role of the Consolidated Fund, to which the taxes and other public resources go, in discharging public commitments and obligations. My reflections had led me to make the following comment in my book On the Loom of Time (p. 362)
“I fail to
understand the wisdom to starve our Consolidated Fund meant for welfare
of our nation by crafting such terms in the Double Taxation Agreements
which facilitate our country’s loot, even unmindful of national security
issues, thus creating the evident conditions for the emergence of two Indias:
one of the common-run of ‘We, the People’, the suffering millions whose
existence is being fast forgotten, and the other, the ‘High Net Worth
Individuals’, corporations, fraudsters, tricksters, masqueraders operating through mist and fog from various tiny-tots of the terra firma and cyberspace.”

.Article 292 of our Constitution ‘provides that the executive power of the Union extends to borrowing upon the security of the Consolidated Fund of India’. In terms of Article 266, all revenues, go to the Consolidated Fund of India are to be spent in accordance with our Constitution’s provisions, and under a close Parliamentary control. Such resources are under trust to meet expenditure for public cause. FDI, on the other hand, comes and goes for the corporate benefits, and the High Net Worth Persons, and the global economic gladiators over whom, under the present-day WTO regime, our Parliament has no control. Greed is their loadstone, and Deception their strategy.

VODAFONE: FDI: THIS CRAZE AT LOGGERHEADS WITH WISDOM

The supreme vector, shaping the premises in the reasoning in this Vodafone Case is, it is respectfully submitted, the neoliberal zest to promote FDI. It is interesting to note that our Government countered this quest for FDI through its Review Petition before the Supreme Court, which was rejected in chamber. After the Vodafone Judgement, we find that all hell broke loose in India and abroad. Under high pressure advertisement many pleaded, countering aggressively the Government’s effort to knock down legislatively the law that led the Court to do what it did, that our Government was on its holiday from wisdom in doing so. This cacophonous orchestra, dexterously played by the Rogue Finance (and its political mentors, and hired lobbyists) has become too much for ordinary people. It seems the conspirators have run amok in their zest for a cause about whose worth we differ. It is duty of our citizenry not to allow our Republic to be dragged to corporate servitude making our Constitution a parchment of studied farce. In this, and in some other short articles to come, I intend to concentrate on this topic for my readers as informed citizenry is the pre-condition for a democracy. .
The Vodafone’s “contextual of facts” called for, in the wisdom of this humble self, no judicial quest for conditions to create conditions for facilitating FDI, as the corporate structuring involved, about which I would tell you in some subsequent articles, was not designed to bring any FDI to India. But the Judgement was cast in the form of a simple categorical syllogism that ran: the major premise: that which promotes the incoming of FDI is good; the minor premise: that the Department’s view of the tax law, as adopted in the Vodafone Case, does not ( or is unlikely to) promote that policy; hence the conclusion: the Department’s view is not good.
The Hon’ble Judges, it is submitted, cast aside their judicial robe of detachment, and virtually turned to play the role of economic advisors with the neoliberal commitments. They did not realize that that was not their judicial function. The Hon’ble Judges are seldom competent to decide the legality and propriety of policy-loaded complex economic issues. The Hon’ble Court failed to consider the very mission of our Constitution, and also failed to evaluate the role of FDI in the economic management of our country. Some of the reasons, which have led this humble self to submit this, are summarized thus:
The Judges seldom have the credentials to decide socio-economic issues of this sort. If such issues were to be decided, the decision-makers would have studied all the shades of views, and the short-term and long-term effects of such untested economic assumptions in the context of our polity: law and the Constitution; and should have heard in the open court persons with sound proficiency in socio-management: persons like Dr. Amartya Sen, Joseph Stiglitz, Noam Chomsky, or even Dr. Manmohan Singh himself! The Hon’ble Judges should have kept in mind what Justice Holmes had said in his classic dissent in Lochner v. New York :
“This case is decided upon an economic theory which a large part of the country does not entertain. If it were a question whether I agreed with that theory, I desire to study it further and long before making up my mind.”

In the Vodafone Judgement there is not even a whisper to suggest that the relevance of the issue of FDI was subjected to the deliberative process in course of arguments. This point stands corroborated by the words, tone, and tenor of the Government’s Review Petition. If this sublime passion for FDI is begotten by the Hon’ble Judges’ private research, the outcome of their intellectual odyssey should not have gone into the judgement. Lord Bridge L.J. in Goldsmith v. Sperrings Ltd [1977] 2 ALL ER 566 at 590 had aptly said
“….But the fourth and most important reason is that this part of the Master of Rolls’ judgment decides against the plaintiff on a ground on which Mr. Howser, for the plaintiff, has not been heard. This is because Mr. Comyn never took this point, and the Court did not put the point to Mr. Howser during the argument. Hence there is a breach of the rule of audi alteram partem which applies alike to issues of law as to issues of fact. In a court of inferior jurisdiction this would be ground for certiorari ; and I do not think that this Court should adopt in its own procedure any lower standards than those it prescribes for others.” ( italics supplied).
.

The supreme vector, shaping the premises in the reasoning in this Vodafone Case is, it is respectfully submitted, the neoliberal zest to promote FDI. It is interesting to note that our Government countered this quest for FDI through its Review Petition before the Supreme Court, which was rejected in chamber. After the Vodafone Judgement, we find that all hell broke loose in India and abroad. Under high pressure advertisement many pleaded, countering aggressively the Government’s effort to knock down legislatively the law that led the Court to do what it did, that our Government was on its holiday from wisdom in doing so. This cacophonous orchestra, dexterously played by the Rogue Finance (and its political mentors, and hired lobbyists) has become too much for ordinary people. It seems the conspirators have run amok in their zest for a cause about whose worth we differ. It is duty of our citizenry not to allow our Republic to be dragged to corporate servitude making our Constitution a parchment of studied farce. In this, and in some other short articles to come, I intend to concentrate on this topic for my readers as informed citizenry is the pre-condition for a democracy. .
The Vodafone’s “contextual of facts” called for, in the wisdom of this humble self, no judicial quest for conditions to create conditions for facilitating FDI, as the corporate structuring involved, about which I would tell you in some subsequent articles, was not designed to bring any FDI to India. But the Judgement was cast in the form of a simple categorical syllogism that ran: the major premise: that which promotes the incoming of FDI is good; the minor premise: that the Department’s view of the tax law, as adopted in the Vodafone Case, does not ( or is unlikely to) promote that policy; hence the conclusion: the Department’s view is not good.
The Hon’ble Judges, it is submitted, cast aside their judicial robe of detachment, and virtually turned to play the role of economic advisors with the neoliberal commitments. They did not realize that that was not their judicial function. The Hon’ble Judges are seldom competent to decide the legality and propriety of policy-loaded complex economic issues. The Hon’ble Court failed to consider the very mission of our Constitution, and also failed to evaluate the role of FDI in the economic management of our country. Some of the reasons, which have led this humble self to submit this, are summarized thus:
The Judges seldom have the credentials to decide socio-economic issues of this sort. If such issues were to be decided, the decision-makers would have studied all the shades of views, and the short-term and long-term effects of such untested economic assumptions in the context of our polity: law and the Constitution; and should have heard in the open court persons with sound proficiency in socio-management: persons like Dr. Amartya Sen, Joseph Stiglitz, Noam Chomsky, or even Dr. Manmohan Singh himself! The Hon’ble Judges should have kept in mind what Justice Holmes had said in his classic dissent in Lochner v. New York :
“This case is decided upon an economic theory which a large part of the country does not entertain. If it were a question whether I agreed with that theory, I desire to study it further and long before making up my mind.”

In the Vodafone Judgement there is not even a whisper to suggest that the relevance of the issue of FDI was subjected to the deliberative process in course of arguments. This point stands corroborated by the words, tone, and tenor of the Government’s Review Petition. If this sublime passion for FDI is begotten by the Hon’ble Judges’ private research, the outcome of their intellectual odyssey should not have gone into the judgement. Lord Bridge L.J. in Goldsmith v. Sperrings Ltd [1977] 2 ALL ER 566 at 590 had aptly said
“….But the fourth and most important reason is that this part of the Master of Rolls’ judgment decides against the plaintiff on a ground on which Mr. Howser, for the plaintiff, has not been heard. This is because Mr. Comyn never took this point, and the Court did not put the point to Mr. Howser during the argument. Hence there is a breach of the rule of audi alteram partem which applies alike to issues of law as to issues of fact. In a court of inferior jurisdiction this would be ground for certiorari ; and I do not think that this Court should adopt in its own procedure any lower standards than those it prescribes for others.” ( italics supplied).
.

The nature of the retrospective changes proposed in the Finance Bill, 2012: they say what is obvious

Linguistic analysis of any provision, of law or letters, is a plastic art. Words mean, they reasonably mean, they can to persuaded to mean, and they can be coerced to mean. It is well-known that “in a debate on what has become the Statute of Westminster, 1932, Mr. Winston Churchill and the Solicitor-General agreed that there was no obscurity in the provisions concerning the Irish Free State, although they took diametrically opposite views concerning their effect.” Such situations abound illustrating both the beauty and bane of English language. Our Constitutional principle is that the law is what the legislature intends through the words used. The function to explore the legislative intention is of the courts. If the legislature finds that on some legal provisions the judiciary missed to catch the meaning intended by it, it can make clarificatory amendments in the existing provisions by adding explanations. I am not reflecting on the retrospective operation of what is called the substantive provisions. In this short article, I focus only on the changes in the Finance Bill relevant to the Vodafone context. In my assessment the changes are merely clarificatory so that the intent of the law makers is not frustrate under forensic process rich in logomachy and semantic sophistry.
While construing Section 9(1)(i) of the Income-tax Act, the intention of the law makers is clear as the word ‘indirectly’ governed all the four situations, and the word ‘through’ was comprehensive enough ( Shorter Oxford English Dictionary ) to take within its sweep even ‘indirect’ transfers demanding ‘look through’ approach. This is how the CBDT Circular No. 372, dated 8th December, 1983 understood it, and wanted others to understand. It was a contemporaneous exposition so deserved due weight ( Verghese Case AIR 1981 SC 1922).
It is worthwhile to reflect that whilst Sections 4 and 5 contemplate normal situations of tax charge on the conventional basis of territorial jurisdiction of the State, Section 9 (1) pertains to ‘Income deemed to accrue or arise in India’, which is not concerned with ‘territoriality’. This ‘deeming’ colours and controls all the concepts incorporated in Section 9 of the Income-tax Act. The Bill seeks to explain what is obviously fair and just; and are designed to clarify what is obvious in common sense, but often not known to our experts in the forensic process. But such thins keep on happening, and such remedies are frequently provided.
The concepts of “property” in the Section 2(14), ‘capital asset’ in Section 9(1)(i) have been clarified through the insertions of explanations. Whilst all rights are merely legally protected interests, ‘property’ is, in the ultimate analysis, a mere bundle right. The word ‘transfer’ cannot merely mean the transfer of papers, when through that act rights are being vested and divested in India. It matters not how the arrangement is choreographed. The words ‘through’, and ‘situate’ are being legislatively made to mean what they precisely mean even in the Concise Oxford Dictionary. What the words ‘property’ ‘transfer’ ‘through’ ‘situated in India’ mean in the legal provisions in the Vodafone context, cannot be understood without taking account of the context that all the prime commercial operations, and contractual obligations, adding value and worth to ‘shares’, had their trajectory in India, had their nexus with the economic matrix in India, and thus had close and vital nexus with the territory of India. The shares, wherever they could be transferred in terms of the Company Law, acquired relevance and value on account of the subjacent capital asset in India. All the ‘Explanations’ introduced in Section 9 of the Act, are clarificatory. We must not forget that sophistry and hyper-technicality cannot highjack what is in all fairness due to the Consolidated Fund of India. Viscount Simonds said in Collco Dealings’ Case [1961] 1AllER 762: “I would answer that neither comity nor rule of international law can be invoked to prevent a sovereign state from taking steps to protect its own revenue laws from gross abuse or save its own citizens from unjust discrimination in favour of foreigners.”
And for recovering taxes from such non-residents’, the only just ways is, what constitutes the heart of Section 195 of the Income-tax Act, to collect due share of tax before it vanishes in the thin air. In Clark (Inspector of Taxes) v. Oceanic Contractors Inc. (1983) 1 ALL ER 133, 152, the British Judge rightly said: the right question to be asked was s “who … is within the legislative grasp, or intendment, of the statute under consideration?”’
In short, the aforementioned changes proposed in the Finance Bill simply clarify the legislative intention of our law- as originally. Besides, the legislative effort is fair and just to all conflicting claims.

Linguistic analysis of any provision, of law or letters, is a plastic art. Words mean, they reasonably mean, they can to persuaded to mean, and they can be coerced to mean. It is well-known that “in a debate on what has become the Statute of Westminster, 1932, Mr. Winston Churchill and the Solicitor-General agreed that there was no obscurity in the provisions concerning the Irish Free State, although they took diametrically opposite views concerning their effect.” Such situations abound illustrating both the beauty and bane of English language. Our Constitutional principle is that the law is what the legislature intends through the words used. The function to explore the legislative intention is of the courts. If the legislature finds that on some legal provisions the judiciary missed to catch the meaning intended by it, it can make clarificatory amendments in the existing provisions by adding explanations. I am not reflecting on the retrospective operation of what is called the substantive provisions. In this short article, I focus only on the changes in the Finance Bill relevant to the Vodafone context. In my assessment the changes are merely clarificatory so that the intent of the law makers is not frustrate under forensic process rich in logomachy and semantic sophistry.
While construing Section 9(1)(i) of the Income-tax Act, the intention of the law makers is clear as the word ‘indirectly’ governed all the four situations, and the word ‘through’ was comprehensive enough ( Shorter Oxford English Dictionary ) to take within its sweep even ‘indirect’ transfers demanding ‘look through’ approach. This is how the CBDT Circular No. 372, dated 8th December, 1983 understood it, and wanted others to understand. It was a contemporaneous exposition so deserved due weight ( Verghese Case AIR 1981 SC 1922).
It is worthwhile to reflect that whilst Sections 4 and 5 contemplate normal situations of tax charge on the conventional basis of territorial jurisdiction of the State, Section 9 (1) pertains to ‘Income deemed to accrue or arise in India’, which is not concerned with ‘territoriality’. This ‘deeming’ colours and controls all the concepts incorporated in Section 9 of the Income-tax Act. The Bill seeks to explain what is obviously fair and just; and are designed to clarify what is obvious in common sense, but often not known to our experts in the forensic process. But such thins keep on happening, and such remedies are frequently provided.
The concepts of “property” in the Section 2(14), ‘capital asset’ in Section 9(1)(i) have been clarified through the insertions of explanations. Whilst all rights are merely legally protected interests, ‘property’ is, in the ultimate analysis, a mere bundle right. The word ‘transfer’ cannot merely mean the transfer of papers, when through that act rights are being vested and divested in India. It matters not how the arrangement is choreographed. The words ‘through’, and ‘situate’ are being legislatively made to mean what they precisely mean even in the Concise Oxford Dictionary. What the words ‘property’ ‘transfer’ ‘through’ ‘situated in India’ mean in the legal provisions in the Vodafone context, cannot be understood without taking account of the context that all the prime commercial operations, and contractual obligations, adding value and worth to ‘shares’, had their trajectory in India, had their nexus with the economic matrix in India, and thus had close and vital nexus with the territory of India. The shares, wherever they could be transferred in terms of the Company Law, acquired relevance and value on account of the subjacent capital asset in India. All the ‘Explanations’ introduced in Section 9 of the Act, are clarificatory. We must not forget that sophistry and hyper-technicality cannot highjack what is in all fairness due to the Consolidated Fund of India. Viscount Simonds said in Collco Dealings’ Case [1961] 1AllER 762: “I would answer that neither comity nor rule of international law can be invoked to prevent a sovereign state from taking steps to protect its own revenue laws from gross abuse or save its own citizens from unjust discrimination in favour of foreigners.”
And for recovering taxes from such non-residents’, the only just ways is, what constitutes the heart of Section 195 of the Income-tax Act, to collect due share of tax before it vanishes in the thin air. In Clark (Inspector of Taxes) v. Oceanic Contractors Inc. (1983) 1 ALL ER 133, 152, the British Judge rightly said: the right question to be asked was s “who … is within the legislative grasp, or intendment, of the statute under consideration?”’
In short, the aforementioned changes proposed in the Finance Bill simply clarify the legislative intention of our law- as originally. Besides, the legislative effort is fair and just to all conflicting claims.

Linguistic analysis of any provision, of law or letters, is a plastic art. Words mean, they reasonably mean, they can to persuaded to mean, and they can be coerced to mean. It is well-known that “in a debate on what has become the Statute of Westminster, 1932, Mr. Winston Churchill and the Solicitor-General agreed that there was no obscurity in the provisions concerning the Irish Free State, although they took diametrically opposite views concerning their effect.” Such situations abound illustrating both the beauty and bane of English language. Our Constitutional principle is that the law is what the legislature intends through the words used. The function to explore the legislative intention is of the courts. If the legislature finds that on some legal provisions the judiciary missed to catch the meaning intended by it, it can make clarificatory amendments in the existing provisions by adding explanations. I am not reflecting on the retrospective operation of what is called the substantive provisions. In this short article, I focus only on the changes in the Finance Bill relevant to the Vodafone context. In my assessment the changes are merely clarificatory so that the intent of the law makers is not frustrate under forensic process rich in logomachy and semantic sophistry.
While construing Section 9(1)(i) of the Income-tax Act, the intention of the law makers is clear as the word ‘indirectly’ governed all the four situations, and the word ‘through’ was comprehensive enough ( Shorter Oxford English Dictionary ) to take within its sweep even ‘indirect’ transfers demanding ‘look through’ approach. This is how the CBDT Circular No. 372, dated 8th December, 1983 understood it, and wanted others to understand. It was a contemporaneous exposition so deserved due weight ( Verghese Case AIR 1981 SC 1922).
It is worthwhile to reflect that whilst Sections 4 and 5 contemplate normal situations of tax charge on the conventional basis of territorial jurisdiction of the State, Section 9 (1) pertains to ‘Income deemed to accrue or arise in India’, which is not concerned with ‘territoriality’. This ‘deeming’ colours and controls all the concepts incorporated in Section 9 of the Income-tax Act. The Bill seeks to explain what is obviously fair and just; and are designed to clarify what is obvious in common sense, but often not known to our experts in the forensic process. But such thins keep on happening, and such remedies are frequently provided.
The concepts of “property” in the Section 2(14), ‘capital asset’ in Section 9(1)(i) have been clarified through the insertions of explanations. Whilst all rights are merely legally protected interests, ‘property’ is, in the ultimate analysis, a mere bundle right. The word ‘transfer’ cannot merely mean the transfer of papers, when through that act rights are being vested and divested in India. It matters not how the arrangement is choreographed. The words ‘through’, and ‘situate’ are being legislatively made to mean what they precisely mean even in the Concise Oxford Dictionary. What the words ‘property’ ‘transfer’ ‘through’ ‘situated in India’ mean in the legal provisions in the Vodafone context, cannot be understood without taking account of the context that all the prime commercial operations, and contractual obligations, adding value and worth to ‘shares’, had their trajectory in India, had their nexus with the economic matrix in India, and thus had close and vital nexus with the territory of India. The shares, wherever they could be transferred in terms of the Company Law, acquired relevance and value on account of the subjacent capital asset in India. All the ‘Explanations’ introduced in Section 9 of the Act, are clarificatory. We must not forget that sophistry and hyper-technicality cannot highjack what is in all fairness due to the Consolidated Fund of India. Viscount Simonds said in Collco Dealings’ Case [1961] 1AllER 762: “I would answer that neither comity nor rule of international law can be invoked to prevent a sovereign state from taking steps to protect its own revenue laws from gross abuse or save its own citizens from unjust discrimination in favour of foreigners.”
And for recovering taxes from such non-residents’, the only just ways is, what constitutes the heart of Section 195 of the Income-tax Act, to collect due share of tax before it vanishes in the thin air. In Clark (Inspector of Taxes) v. Oceanic Contractors Inc. (1983) 1 ALL ER 133, 152, the British Judge rightly said: the right question to be asked was s “who … is within the legislative grasp, or intendment, of the statute under consideration?”’
In short, the aforementioned changes proposed in the Finance Bill simply clarify the legislative intention of our law- as originally. Besides, the legislative effort is fair and just to all conflicting claims.