Word 'Tax' - Definition / Legal Terminology - Income Tax

Meaning of term Tax As per clause (43) of section 2 of the Income -tax Act 1961 Tax in relation to the assessment year commencing on the 1st day of April, 1965, and any subsequent assessment year means - income-tax chargeable under the provisions of this Act, and in relation to any other assessment year income-tax and super-tax chargeable under the provisions of this Act prior to the aforesaid date and in relation to the assessment year commencing on the 1st day of April, 2006, and any subsequent assessment year includes the fringe benefit tax payable under section 115WA ; In Matthews v. Chicory Marketing Board,147 Latham CJ defined- tax as a compulsory exaction of money by a public authority for public purposes, enforceable by law, and not a payment for services rendered. A tax has the following essential characteristics: (i) it is a compulsory exaction of money by a public authority; (ii) it is imposed under statutory power without the consent of the tax payer; (iii) the demand is enforceable by law; (iv) it is an imposition made for public purposes to meet the general expenses of the state without reference to any special benefit to be conferred on the payer of the tax; and (v) it is part of the common burden. MINERAL AREA DEVELOPMENT AUTHORITY- 2024 (7) TMI 1390 - SUPREME COURT (LB) Thomas M. Cooley in A Treatise on the Constitutional Limitations defined the taxes in following words: Taxes are defined to be burdens or charges imposed by the legislative power upon persons or property, to raise money for public purposes. The power to tax rests upon necessity, and is inherent in every sovereignty. The legislature of every free State will possess it under the general grant of legislative power, whether particularly specified in the constitution among the powers to be exercised by it or not.. JINDAL STAINLESS LTD. AND ANR. VERSUS STATE OF HARYANA AND ORS.- 2016 (11) TMI 545 - SUPREME COURT (LB) A Seven Judge Bench of this Court in Commissioner, Hindu Religious Endowments, Madras vs. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, 1954 (4) TMI 29 - SUPREME COURT has given definition of tax which has been repeatedly quoted and relied by this Court in large number of subsequent judgments. In paragraph 45 following was stated: 45 . A neat definition of what tax means has been given by Latham, C.J. of the High Court of Australia in Matthews v. Chicory Marketing Board. A tax , according to the learned Chief Justice, is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment for services rendered . This definition brings out, in our opinion, the essential characteristics of a tax as distinguished from other forms of imposition which, in a general sense, are included within it. It is said that the essence of taxation is compulsion, that is to say, it is imposed under statutory power without the taxpayer s consent and the payment is enforced by law. The second characteristic of tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax. This is expressed by saying that the levy of tax is for the purposes of general revenue, which when collected forms part of the public revenues of the State. As the object of a tax is not to confer any special benefit upon any particular individual, there is, as it is said, no element of quid pro quo between the taxpayer and the public authority. Another feature of the taxation is that as it is a part of the common burden, the quantum of imposition upon the taxpayer depends generally upon his capacity to pay.