Government of India v Taylor [1955] AC 491 (sometimes called Re Delhi Electric Supply & Traction Co Ltd) is a judicial decision of the House of Lords relating to the enforceability of foreign tax claims under English law. The House of Lords unanimously upheld the general rule at common law that foreign tax claims are non-justiciable in England under the Act of state doctrine. Accordingly, a claim with respect to foreign taxes was not an admissible claim in the liquidation of a United Kingdom company. The English courts may not, directly or indirectly, enforce the tax claims of another sovereign state.[1][2]
The Delhi Electric Supply & Traction Co Ltd was an English company which was formed in 1906. It was incorporated for the purpose of operating an electricity supply and tramway under an operating licence granted by the Municipality of Delhi. The company carried on business in India until approximately 1947 when it sold the whole of its undertakings to the Government of India on 2 March 1947.[2] On 18 April 1947 India passed the Indian Income Tax and Excess Profits Tax (Amendment) Act 1947. On 25 May 1949 the company went into voluntary liquidation. Samuel Taylor and John Lovering[3] were appointed as liquidators, having previously acted as directors of the company. On 24 October 1951 the Commissioner of Income Tax at Delhi served a notice claiming tax on the surplus from the sale of undertaking.[4]
The liquidators rejected the claim, and sought directions from the court as to whether the claim was an admissible claim in the liquidation.
The House of Lords held unanimously that the claim failed. Viscount Simonds gave the lead judgment.
My Lords, I will admit that I was greatly surprised to hear it suggested that the courts of this country would and should entertain a suit by a foreign State to recover a tax.
He summarised the general prohibition at common law, citing various earlier cases on point, including King of Hellenes v Broston (1923) 16 Ll L Rep 190, Re Visser [1928] Ch 877 and Sydney Municipal Council v Bull [1909] 1 KB 7. Having cited the general rule, he then discussed the two alternative grounds upon which counsel for the Government of India was arguing that an exception should be made:
Firstly, that as India was a republic within the Commonwealth, recognising the Queen as Head of the Commonwealth, it should not be treated in the same way as other wholly foreign countries; and
Secondly, that the general rule applied to natural persons and personal claims - neither consideration should apply to a company in winding-up, which is required to make provision for all claims made against it.
Viscount Simonds rejected both arguments, describing them as "frail weapons with which to attack a strong fortress".[5] He noted that the general common law had tacit Parliamentary approval in the passing of the Foreign Judgments (Reciprocal Enforcement) Act 1933, section 1(2)(b).[6] He ultimately summarily rejected both arguments.
Lord Keith gave a short concurring judgment, specifically endorsing the recent judgment in Peter Buchanan Ltd v McVey [1954] Ir 89[7] (unreported at the time).
Lord Somervell also gave a short concurring speech, affirming the general statement of Lord Mansfield CJ in Holman v Johnson (1775) 1 Cowp 341 at 343 that "no country ever takes notice of the revenue laws of another." He then went on to state that "after considerable research no case of any country could be found in which taxes due to State A had been enforced in the courts of State B."
Significance
Government of India v Taylor remains good law today. It forms the central basis of Rule 3 of Dicey Morris & Collins on The Conflict of Laws, and is one of the primary authorities cited in support of that rule:
RULE 3 - English courts have no jurisdiction to entertain an action (1) for the enforcement, either directly or indirectly, of a penal, revenue or other public law of a foreign State; or (2) founded upon an act of state.[1]
However it has been qualified by subsequent authorities, including by the Privy Council in Webb v Webb[2020] UKPC 22. In QRS 1 Aps v Frandsen [1999] 1 WLR 2169 it was held that to uphold a contractual indemnity for the payment of taxes would not constitute indirect enforcement of a foreign tax claim.
It has also been noted that in practice the effect of the rule is widely circumvented by international treaties.[8]
1 2 P.M. North and J.J. Fawcett (1992). Cheshire & North's Private International Law (12thed.). Butterworths. p.114. ISBN0406530815. Although it has been generally accepted, at any rate since the time of Lord Mansfield, that no action lies in England for the enforcement of a foreign revenue law, authority for the proposition long remained a little nebulous ... All doubts were, however, stilled in 1955 by the decision of the House of Lords in Government of India v Taylor
↑ Lovering would later die, and on 9 July 1953 was replaced by William Hume as joint liquidator
Constitutional law is a body of law which defines the role, powers, and structure of different entities within a state, namely, the executive, the parliament or legislature, and the judiciary; as well as the basic rights of citizens and, in federal countries such as the United States and Canada, the relationship between the central government and state, provincial, or territorial governments.
The Government of India is the government of the Republic of India, located in South Asia, consisting of 36 states and union territories. The government is led by the prime minister who exercises the most executive power and selects all the other ministers. The country has been governed by a NDA-led government since 2014. The prime minister and their senior ministers belong to the Union Council of Ministers—its executive decision-making committee being the cabinet.
The legal system of India consists of civil law, common law, customary law, religious law and corporate law within the legal framework inherited from the colonial era and various legislation first introduced by the British are still in effect in modified forms today. Since the drafting of the Indian Constitution, Indian laws also adhere to the United Nations guidelines on human rights law and the environmental law. Personal law is fairly complex, with each religion adhering to its own specific laws. In most states, registering of marriages and divorces is not compulsory. Separate laws govern Hindus including Sikhs, Jains and Buddhist, Muslims, Christians, and followers of other religions. The exception to this rule is in the state of Goa, where a uniform civil code is in place, in which all religions have a common law regarding marriages, divorces, and adoption. On February 7, 2024, the Indian state of Uttarakhand also incorporated a uniform civil code. In the first major reformist judgment for the 2010s, the Supreme Court of India banned the Islamic practice of "Triple Talaq". The landmark Supreme Court of India judgment was welcomed by women's rights activists across India.
R v Secretary of State for Transport was a judicial review case taken against the United Kingdom government by a company of Spanish fishermen who claimed that the United Kingdom had breached European Union law by requiring ships to have a majority of British owners if they were to be registered in the UK. The case produced a number of significant judgements on British constitutional law, and was the first time that courts held that they had power to restrain the application of an Act of Parliament pending trial and ultimately to disapply that Act when it was found to be contrary to EU law.
In law, the enforcement of foreign judgments is the recognition and enforcement in one jurisdiction of judgments rendered in another ("foreign") jurisdiction. Foreign judgments may be recognized based on bilateral or multilateral treaties or understandings, or unilaterally without an express international agreement.
Pepper v Hart [1992] UKHL 3, is a landmark decision of the House of Lords on the use of legislative history in statutory interpretation. The court established the principle that when primary legislation is ambiguous then, in certain circumstances, the court may refer to statements made in the House of Commons or House of Lords in an attempt to interpret the meaning of the legislation. Before this ruling, such an action would have been seen as a breach of parliamentary privilege.
The Ministry of Law and Justice in the Government of India is a cabinet ministry which deals with the management of the legal affairs, legislative activities and administration of justice in India through its three departments namely the Legislative Department and the Department of Legal Affairs and the Department of Justice respectively. The Department of Legal Affairs is concerned with advising the various Ministries of the Central Government while the Legislative Department is concerned with drafting of principal legislation for the Central Government. The ministry is headed by Cabinet Minister of Law and Justice Arjun Ram Meghwal appointed by the President of India on the recommendation of the Prime Minister of India. The first Law and Justice minister of independent India was Dr. B. R. Ambedkar, who served in the Prime Minister Jawaharlal Nehru's cabinet during 1947–51.
Medellín v. Texas, 552 U.S. 491 (2008), was a decision of the United States Supreme Court that held even when a treaty constitutes an international commitment, it is not binding domestic law unless it has been implemented by an act of the U.S. Congress or contains language expressing that it is "self-executing" upon ratification. The Court also ruled that decisions of the International Court of Justice are not binding upon the U.S. and, like treaties, cannot be enforced by the president without authority from Congress or the U.S. Constitution.
United Kingdom administrative law is part of UK constitutional law that is designed through judicial review to hold executive power and public bodies accountable under the law. A person can apply to the High Court to challenge a public body's decision if they have a "sufficient interest", within three months of the grounds of the cause of action becoming known. By contrast, claims against public bodies in tort or contract are usually limited by the Limitation Act 1980 to a period of 6 years.
The constitution of the United Kingdom comprises the written and unwritten arrangements that establish the United Kingdom of Great Britain and Northern Ireland as a political body. Unlike in most countries, no official attempt has been made to codify such arrangements into a single document, thus it is known as an uncodified constitution. This enables the constitution to be easily changed as no provisions are formally entrenched.
British Eagle International Air Lines Ltd v Cie Nationale Air France [1975] 1 WLR 758 is a UK insolvency law case, concerning priority of creditors in a company winding up.
The concept of the separation of powers has been applied to the United Kingdom and the nature of its executive, judicial and legislative functions. Historically, the apparent merger of the executive and the legislature, with a powerful Prime Minister drawn from the largest party in parliament and usually with a safe majority, led theorists to contend that the separation of powers is not applicable to the United Kingdom. However, in recent years it does seem to have been adopted as a necessary part of the UK constitution.
Cayman Islands bankruptcy law is principally codified in five statutes and statutory instruments:
Hague v Nam Tai Electronics refers to a pair of legal decisions of the Privy Council on appeal from the British Virgin Islands. The first was a unanimous decision given by Lord Hoffman, reported at [2006] UKPC 52, which focussed upon the anti-deprivation rule and secured creditor's rights. The second was a unanimous decision given by Lord Scott, reported at [2008] UKPC 13, and concerned the liability of a company liquidator. The second decision was much more widely reported.
Hong Kong insolvency law regulates the position of companies which are in financial distress and are unable to pay or provide for all of their debts or other obligations, and matters ancillary to and arising from financial distress. The law in this area is now primarily governed by the Companies Ordinance and the Companies Rules. Prior to 2012 Cap 32 was called the Companies Ordinance, but when the Companies Ordinance came into force in 2014, most of the provisions of Cap 32 were repealed except for the provisions relating to insolvency, which were retained and the statute was renamed to reflect its new principal focus.
Stichting Shell Pensioenfonds v Krys[2014] UKPC 41 was a decision of the Privy Council on appeal from the British Virgin Islands relating to an anti-suit injunction in connection with an insolvent liquidation being conducted by the British Virgin Islands courts.
Ayerst v C&K (Construction) Ltd [1976] AC 167 was a decision of the House of Lords relating to revenue law and insolvency law which confirmed that where a company goes into insolvent liquidation it ceases to be the beneficial owner of its assets, and the liquidator holds those assets on a special "statutory trust" for the company's creditors.
The rule against foreign revenue enforcement, often abbreviated to the revenue rule, is a general legal principle that the courts of one country will not enforce the tax laws of another country. The rule is part of the conflict of laws rules developed at common law, and forms part of the act of state doctrine.
Akers v Samba Financial Group[2017] UKSC 6, [2017] AC 424 is a judicial decision of the Supreme Court of the United Kingdom relating to the conflict of laws, trust law and insolvency law.
Antony Gibbs & Sons v La Societe Industrielle et Commerciale des Metaux (1890) 25 QBD 399 is a judicial decision of the Court of Appeal of England and Wales in relation to the effect of foreign bankruptcy upon a domestic contract.
This page is based on this Wikipedia article Text is available under the CC BY-SA 4.0 license; additional terms may apply. Images, videos and audio are available under their respective licenses.
