TaxTMI 
05 Nov 2026 
Interpretation means the action of explaining the meaning of something; the way in which a performer expresses a creative work. It also implies explaining a thing or word or expression when a contrary view is also possible. In taxation, interpretation could relate to a statute, provisions, statutory or exemption notification, tariff, evidence, policy etc.
Every statute is enacted with a specific purpose, scope, and legislative intent. A definition framed in one Act is bound by the context of that specific Act. One can only look at the definition or use of a word in another statute if the two statutes are in pari materia—meaning they deal with the same subject matter, object, or person/thing. If two statutes serve entirely different legislative goals (for example, an educational coordination act versus an anti-corruption criminal act), technical definitions from one cannot be transferred to the other.
It is a settled principle of statutory interpretation that a particular word or a phrase or a section in any enactment has to be construed, interpreted and applied having regard to the context of the scheme, purpose and operational ambit of such statute. Every statute has in its subject matter as a distinguished context. Therefore, the same word occurring in the other statute cannot be bodily lifted and read as defined in the other statute for the purpose of applying the same, unless such word or definition or provision is provided to be read by the legislature by applying doctrine of reference or doctrine of incorporation.
For the purposes of interpretation of a word in a statute, the definition part plays a vital role. Once the problem of interpretation is involved at first the normal meaning of the said word, dictionary meaning is taken into account. Then the definition part is taken into account. If the particular word is defined in the Act, then the interpretation is to be done as per the definition of that word. Securities and Exchange Board of India has been formed under the Securities and Exchange of Board. The SEBI framed man regulations by virtue of powers given to it under the Act. SEBI made SEBI (Mutual Funds) Regulations, 2026. In this regulation the term ‘accredited investor’ is defined under Regulation 2(b) as having the same meaning as assigned to it in clause (ab) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012. This regulation does not define the expression ‘accredited investor’ exclusively but relied on the definition of the same expression in some other regulation and adopts the same.
The expression ‘accredited investor’ is defined under SEBI (Alternative Investment Funds) Regulations, 2012 as any person who is granted a certificate of accreditation by an accreditation agency or who is accredited by a specified SEBI registered/regulated entity as an accredited investor, as per the following eligibility conditions, in a manner as may be specified by the Board from time to time, -
(i) in case of an individual, Hindu Undivided Family, family trust or sole proprietorship has:
(A) annual income of at least Rs.2 crores; or
(B) net worth of at least Rs.7.5 crores, out of which not less than Rs.3.75 is in the form of financial assets; or
(C) annual income of at least Rs.1crore and minimum net worth of Rs.5crores, out of which not less than Rs.2.5 crores are in the form of financial assets; or
(D) securities market exposure of at least Rs.5 crores, as specified by the Board.
(ii) in case of a limited liability partnership set up under the Limited Liability Partnership Act, 2008, has net worth of at least Rs.50 crores or securities market exposure of at least Rs.20 crores, as specified by the Board, or each partner independently meets the eligibility criteria for accreditation under these regulations;
(iii) in case of a body corporate other than a limited liability partnership, has net worth of at least Rs.5 crore or securities market exposure of at least Rs.20 crore, as specified by the Board;
(iv) in case of a trust other than family trust, has net worth of at least Rs.50 crorees or securities market exposure of at least Rs.20 crores, as specified by the Board;
(v) in case of a partnership firm set up under the Indian Partnership Act, 1932, each partner independently meets the eligibility criteria for accreditation under these regulations:
Provided that the Central Government and the State Governments, developmental agencies set up under the aegis of the Central Government or the State Governments, funds set up by the Central Government or the State Governments, qualified institutional buyers as defined under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, multilateral agencies, Persons Resident Outside India as defined under Foreign Exchange Management Act, 1999 and any other entity as may be specified by the Board from time to time, shall deemed to be an accredited investor.
In MAHESHWARI FISH SEED FARM Versus T. NADU ELECTRICITY BOARD AND ANR. - 2004 (4) TMI 632 - Supreme Court, the appellant contended that the word ‘agriculture’ as defined in the blank Act, should follow the same meaning as defined in other Act such as Tamil Nadu Agricultural Produce Marketing (Regulation) Act, 1987, Tamil Nadu Agriculture University Act, 1971 or Agriculture and Rural Debt Relief Scheme, 1990 in which the term ‘agriculture’ included ‘pisciculture’. The Supreme Court observed that the common-parlance meaning of the term ‘agriculture’, in the context in which it has been used and is arising for determination before the Court, cannot be determined by reference to definitions given in other statutes for the following reasons-
- none of the statutes referred to by Shri Iyer, the learned Senior Counsel, can be called statutes in pari materia.
- it is common knowledge that the definition coined by the legislature for the purpose of a particular enactment is often an extended or artificial meaning so assigned as to fulfil the object of that enactment.
The Supreme Court held that Such definitions given in other enactments cannot be freely used for finding out meaning to be assigned to a term of common parlance used in an altogether different setting.
In Union of India & Ors. Versus RC. Jain & Ors. - 1981 (2) TMI 200 - Supreme Court, the Supreme Court held that if a particular expression is not defined in an Act, its definition in another Act cannot be imported into the former Act.
In Jagatram Ahuja Versus Commissioner Of Gift-Tax - 2000 (10) TMI 48 - Supreme Court, the Supreme Court held that the words and expressions defined in one statute as judicially interpreted do not afford a guide to construction of the same words or expressions in another statute unless both the statutes are pari materia legislations or it is specifically so provided in one statute to give the same meaning to the words as defined in the other statute. The aim and object of the two legislations, namely, the Gift Tax Act and the
Estate Duty Act are not similar.
In The State of Gujarat Versus Mansukhbhai Kanjibhai Shah - 2020 (4) TMI 882 - Supreme Court, the contention of the Respondent is that the term "University" needs to be read in accordance with the UGC Act, wherein only those Universities covered under the Section 2(f) of the UGC Act are covered under the PC Act. Such an interpretation, by importing the technical definition under a different Act may not be feasible herein. It is a settled law that technical definitions under one statute should not be imported to another statute which is not in pari materia with the first. The UGC Act and the PC Act are enactments which are completely distinct in their purpose, operation and object. The preamble of the UGC Act states that it is 'an Act to make provision for the co-ordination and determination of standards in Universities, and for that purpose, to establish a University Grants Commission'. On the other hand, the PC Act is an enactment meant to curb the social evil of corruption in the country. As such, the extension of technical definitions used under one Act to the other might not be appropriate, as the two Acts are not in pari materia with one another. This brings to the conclusion that purport of UGC Act cannot be borrowed under the PC Act, and that an independent meaning needs to be provided for the term "University" as occurring under the PC Act.