Lex Non Cogit Ad Impossibilia means the law shall not expect performance of the
impossible. The excuse of impossibility of performance cannot be sustained in case it is
explicitly expressed in a contract, however, when it is provided by law, non-performance can
be excused. It was observed by the Hon’ble Supreme Court in the case of Industrial Finance
Corporation of India Ltd. Versus Cannanore Spinning and Weaving Mills Ltd.
Reported in 2002 (4) TMI 943 – Supreme Court that though impossibility of performance
is in general no excuse for not performing an obligation which a party has expressly
undertaken by contract, yet when the obligation is one implied by law, impossibility of
performance is a good excuse.
The maxim ‘Lex Non Cogit Ad Impossibilia’ is closely connected with the latin maxim
‘Impotentia Excusat Legem’, which means impossibility excuses the law and inability
excuses the non-observance of the law. Impossibility is followed by inability of performance
which subsequently leads to non-performance.
In the case of State of Madhya Pradesh versus Narmada Bachao Andolan & Anr
reported in 2011 (5) TMI 914 – Supreme Court, the Hon’ble Supreme Court observed that
when it appears that the performance of the formalities prescribed by a statute has been
rendered impossible by circumstances over which the persons interested had no control, like
an act of God, the circumstances will be taken as a valid excuse.
One of the classic examples understandable in the recent unprecedented times is that the
Pandemic is rendered various operations impossible. For instance during the period of
complete lockdown, it was impossible for taxpayers to comply with hearing dates and other
compliances. In fact, several taxpayers were in such a situation that it was impossible for
them to make payment to their supplier within 180 days as stipulated in the second proviso of
Section 16(2) of the Central Goods & Services Tax Act, 2017. Several relaxations were
therefore given by the Government otherwise this maxim would squarely be applicable on all
such defaults.
This legal maxim is applicable in every case whether it is a civil matter, criminal matter,
taxation matter or even against any Court order if it is impossible to implement. In a very
interesting recent case of, State of Uttar Pradesh versus Inhuman Condition at Quarantine Centres and for Providing Better Treatment to Corona Positive 2021 (8)
TMI 1128 – Supreme Court, the Hon’ble Supreme Court noted the ‘Doctrine of
Impossibility’. It was held that the High Court should normally consider the possibility of the
implementation of the directions given by it, and such directions which are incapable of being
implemented should be avoided. The doctrine of impossibility would be equally applicable to
Court orders as well.
In the case of Life Insurance Corporation of India versus Commissioner of Income Tax
1996 (2) TMI 5 – Supreme Court, the Hon’ble Supreme Court observed that in the surplus
or deficit in any inter-valuation period relating to the Corporation which came to be formed
only on the appointed day in 1956, this amount could not be reflected since it related to a
period prior to the formation of the Corporation. The law does not contemplate or require the
performance of an impossible act – lex non cogit ad impossibilia.
The constitutional validity of Section 9 (2) (g) of the DVAT Act, 2004 was challenged to the
extent that it required taxpayer to do the impossible. It placed an onerous burden on a
bonafide purchasing dealer. What the Section requires the purchasing dealer to do is that after
transacting with the selling dealer, somehow ensure that the selling dealer does in fact deposit
the tax collected from the purchasing dealer and if the selling dealer fails to do so, undergo
the risk of being denied the ITC. In the case of Arise India Limited versus Commissioner
of Trade and Taxes 2017 (10) TMI 1020 – Delhi High Court, the Hon’ble Delhi High
Court held as follows:
Applying the law explained in the above decisions, it can be safely concluded in the present
case that there is a singular failure by the legislature to make a distinction between
purchasing dealers who have bona fide transacted with the selling dealer by taking all
precautions as required by the DVAT Act and those that have not. Therefore, there was need
to restrict the denial of ITC only to the selling dealers who had failed to deposit the tax
collected by them and not punish bona fide purchasing dealers. The latter cannot be expected
to do the impossible. It is trite that a law that is not capable of honest compliance will fail in
achieving its objective. If it seeks to visit disobedience with disproportionate consequences to
a bona fide purchasing dealer, it will become vulnerable to invalidation on the touchstone of
Article 14 of the Constitution.
Analogous provision exists in the GST Law as well. Section 16(2)(c) of the CGST Act, 2017
imposes a condition on the recipient that ITC will be eligible only if the supplier has paid tax
to the Government. This is an impossible condition to be imposed on the recipient as the Law
provides no mechanism to find out whether the supplier has paid tax to the Government or
not. Based on the above judgment and a plethora of others from the erstwhile regime, the
constitutional validity of this provision is under challenge before various Courts across the
country.
Author: CA Sakshi Jhajharia