Question

Which of the following is correct?

• A. Where the construction of any taxing entry is changed, the burden of proof to justify the change lies on the department.
• B. Although equity and taxation are quite strangers, but a construction which results in equity rather than in injustice, should be preferred to the literal construction.
• C. Where the literal interpretation leads to absurd or unintended results, the language of the statute can be modified to accord with the legislative intention and to avoid absurdity also applies in interpreting a taxing statute.
• D. All of the above

Hint:

Even in tax law, literal interpretation can give way to avoid injustice or absurd outcomes, aligning with legislative intent.

Answer 1

The Correct Option is D

Step 1: General principles of interpretation in taxation.
- Tax statutes are strictly construed, but principles of fairness and prevention of absurd results still apply.
Step 2: Application to each statement.
- (a) True — the burden of proof lies on the department when changing a settled interpretation.
- (b) True — while equity generally doesn’t override tax law, equitable interpretation may be preferred if literal meaning leads to injustice.
- (c) True — the “absurdity rule” allows departure from literal meaning to reflect legislative intent.
Since all are correct, the answer is (d). \[ \boxed{(d)} \]