Judicial Interpretation Of Tax Statutes In The Digital Economy: Balancing Legislative Intent And Economic Realities
- IJLLR Journal
- May 1
- 1 min read
Kashish Verma, BA LLB, Manav Rachna University, Faridabad
ABSTRACT
The rapid expansion of the digital economy, encompassing areas such as e- commerce, crypto currency, and financial transactions facilitated by artificial intelligence, has presented unprecedented challenges to traditional tax frameworks. In contrast to traditional business paradigms, digital transactions frequently surpass geographical constraints, thereby complicating jurisdictional tax assertions and the enforcement of extant tax regulations. Judicial bodies worldwide have faced considerable obstacles in interpreting tax legislation in a manner that remains consistent with legislative intent whilst also adapting to the fluid realities of the digital economy. The continuously evolving nature of digital transactions demands a flexible judicial methodology that reconciles rigorous statutory interpretation with current economic necessities.
This manuscript explores the fundamental tenets of tax law interpretation, encompassing strict construction, the purposive approach, and the substance- over-form doctrine, which are pivotal in addressing ambiguities within digital taxation. A comparative evaluation of judicial methodologies in India and various international jurisdictions illuminates prevailing judicial trends, landmark case law, and the degree of legislative shortcomings in tackling emerging digital tax dilemmas. Additionally, the research emphasizes the pressing requirement for modernized tax frameworks that promote equity, mitigate tax avoidance, and furnish legal certainty for digital enterprises and regulatory authorities. Given the escalating trends of digitalization and globalization, tax legislation must adapt to reflect economic realities while upholding the foundational principles of fairness and efficiency in taxation.
