The main legal point established in the judgment is the principle of construction to be applied to taxing statutes, which favors the taxpayer in case of two equally opposite constructions, and the intention of the legislature to tax all incorporated companies, including English companies with capital in foreign currency.

Walter Salis Schwabe, K.C., C.J.

1. The question for decision is whether an English company with sterling capital is liable to assessment under the heading " Tax on Companies " under the Madras City Municipal Act, IV of 1919. This depends on the proper interpretation of S. no and of Rule 7 of Schedule IV which must be read together. That section runs: " Every incorporated company transacting business within the City for profit...shall pay by way of licence fee ...a half-yearly tax on its paid-up capital on the scale shown in the taxation rules in Schedule IV but in no case exceeding rupees one thousand, if and as soon as it has transacted business in the city for the period prescribed in Section 113." Turning to Rule 7 of Schedule IV it runs: "Companies shall be assessed by the Commissioner on the following scale:

Paid-up capital--lakhs of rupees. Half-yearly tax. A. More than twenty ... ... Rs. 1,000. B. More than ten, less than twenty ... Rs. 500.

etcetera." This has been slightly amended by the Madras Act VII of 1922, which substituted " twenty and more than twenty" and " ten and more than ten " for the words under (A) and (B), the object being to bring in to tax companies whose capital was exactly twenty or ten lakhs which might have been excluded by the use of the words " more than " and " less than."

2. The principle of construction to be applied to taxing statutes is that, if the words of the statute are capable of two otherwise equally opposite constructions, the construction to be adopted is that in favour of the taxpayer but, to ascertain whether the two possible constructions are equally opposite, the ordinary rules of construction of statutes are to be applied. As pointed out by Rowlatt, J. in Cape Brandy Syndicate v. Inland Revenue Commissioners (1921) I KB 64, the maxim that clear words are necessary in order to tax the subject does not mean, as often contended, " that words are to be unduly restricted against the taxing authority. It simply means that in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." That was enunciating no new principle, and I think the matter was clearly stated by Lord Russel, C. J., in Attorney-General v. Carlton Bank (1899) II Q B 158 at 164 when he said, "I see no reason why special canons of construction should be applied to any Act of Parliament, and I know of no authority for saying that a Taxing Act is to be construed differently from any other Act. The duty of the Court is, in my opinion, in all cases the same, whether the Act to be construed relates to taxation or to any other subject, namely to give effect to the intention of the legislature as that intention is to be gathered from the language employed, having regard to the context in connection with which it is employed. The Court must no doubt ascertain the subject matter to which the particular tax is by the statute intended to be applied, but when once that is ascertained, it is not open to the Court to narrow or whittle down the operation of the Act by seeming considerations of hardship or of business convenience or the like. Courts have to give effect to what the legislature has said." Now, in this case, we have to see what was the intention of the legislature to be deduced from the words used and the surrounding circumstances. The Act purports to impose a tax on every incorporated company (which words it is admitted includes English companies) carrying on business within the city, and in terms imposed on its paid-up capital a tax on the scale shown in the rules in the schedule. So far the language clearly indicates an intention to tax all incorporated companies. Turning to the rule in the schedule, we find that the company has to pay license fee at a varying rate in rupees according as its capital is more