WHEN THE GENERAL MEETS THE SPECIFIC: RESOLVING THE PRIORITY PROBLEM BETWEEN INDIA’S GENERAL ANTI-AVOIDANCE RULES AND THE SPECIFIC ANTI-AVOIDANCE PROVISIONS IN CORPORATE REORGANISATIONS
AUTHOR – MOHINI SINGH, AMITY LAW SCHOOL, AMITY UNIVERSITY MADHYA PRADESH, GWALIOR
BEST CITATION – MOHINI SINGH, WHEN THE GENERAL MEETS THE SPECIFIC: RESOLVING THE PRIORITY PROBLEM BETWEEN INDIA’S GENERAL ANTI-AVOIDANCE RULES AND THE SPECIFIC ANTI-AVOIDANCE PROVISIONS IN CORPORATE REORGANISATIONS, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (9) OF 2026, PG. 395-404, APIS – 3920 – 0001 & ISSN – 2583-2344. DOI – https://doi.org/10.65393/IJLRV6I943
ABSTRACT
The introduction of the General Anti-Avoidance Rules in Chapter X-A of the Income-tax Act, 1961, with effect from the assessment year 2018-19, gave the Indian revenue a broad statutory power to disregard arrangements that lack commercial substance and that are entered into mainly to obtain a tax benefit. The Act, however, already contained a dense network of specific anti-avoidance provisions addressed to particular mischiefs, several of which bear directly upon corporate mergers, demergers and acquisitions. The statute does not say which of the two is to prevail where both might apply, and the resulting uncertainty falls with particular force on reorganisations, where transactions are large, planned years in advance, and acutely sensitive to fiscal risk. This paper examines the priority problem in the reorganisation context. It locates the problem in the legislative text, traces it through the judicial trajectory from McDowell to Vodafone and the displacement of that case law by the statutory rules, and contrasts the Indian silence with the accommodation reached in the United Kingdom, where the general anti-abuse rule is expressly subordinated to a double-reasonableness threshold and confined to abuse that the specific code does not already reach. The paper argues that the absence of a rule of priority is not a gap that interpretation can safely fill, and it proposes a statutory rule of specific-provision immunity, qualified by a narrow abuse exception, as the means of restoring the certainty on which the reorganisation of Indian business depends.
Keywords: General Anti-Avoidance Rules; specific anti-avoidance provisions; mergers and acquisitions; corporate reorganisation; tax certainty; commercial substance; Income-tax Act 1961; GAAR