Hon’ble Mr. Justice Balia,
Judge, High Court of Rajasthan and the President of today’s function, Smt.
Indira Bhargava, chairperson, Central Board of Direct Taxes, Hon’ble Judges,
past and present, Mr. Ranka, participants, members of legal fraternity,
distinguished guests, ladies and gentlemen;
I am extremely happy to
inaugurate the National Tax Conference on ‘Economic Evolution through Tax
Revolution’ organized by ‘All India Federation of Tax Practitioners’. I also
congratulate the Federation for choosing an important subject of Union Budget,
2007, State Budget and other allied matters.
It is no doubt true that
economists, academicians, lawyers, jurists and Judges have their own views on
levy of tax. According to one view as Justice Marshall held; “The power to tax
involves the power to destroy”. The other view, however, was of Justice Holmes,
who proclaimed; “Tax is the price we have to pay for civilized society”. So far
as common man is concerned, he has never favoured taxation in any form. The
reason is obvious. Though he pays tax, he does not get anything in the form of
return. Normally, when a person pays something, he excepts to get something for
such payment. Here, that element is absent. That is why somebody has rightly
stated; “Of all debts men are least willing to pay taxes”. For an ordinary man,
tax is a burden which deprives him of a part of his income under the guise of
sovereign power without there being any return (‘quid pro quo’). For big
merchants, companies, corporations and mega undertakings, it is an undesirable
share in the cake of profit earned by them.
But taxes are not of new
origin. They had been levied and collected even in primitive and ancient
societies. Only their patterns have changed in the course of time. In India,
taxes have been imposed since remote past and they have been in force in one
form or the other. Manu’s conception of how taxes should be collected was that
of a milkman who takes out milk from a cow or a bee who takes pollen from a
flower. Kautilya’s Arthasashtra deals with the systematic method of taxation in
a real elaborate and planned manner. He has described in great detail the tax
administration in the Mauryan Empire. It is remarkable that the present day tax
system is in many ways similar to the system of taxation which was in vogue
before more than two thousand years.
After Britishers came here,
several statutes were enacted on the subject. The Income Tax in India came into
its own with the enactment of the Indian Income Tax Act, 1922. Though that
enactment had few sections, it made the law very complicated. With all its
complexities, Income Tax lawyers were very comfortable with the provisions of
the Act. The Act and the professionals developed a mutual familiarity and the
small number of sections enabled them to come to easy grip with the law. It was
said that there was tacit understanding between the law and lawyers and the Act
made the lawyers happy as well as rich.
Since, the statutory provisions
were not adequate to cope of with the fast changing Indian economy, in 1961, a
new act titled Income Tax Act, 1961 came to be enacted. Even the Act has
undergone numerous amendments during the last four decades which has added to
confusion and complexities in the income-tax. Several provisions came up for
consideration before various courts and tribunals. Frequent amendments have been
made. Many a time the Act was amended with a view to solve the problem which had
arisen but the amendment had created many more problems. I am reminded what
Prof. Upendra Bakshi said about an amendment in a statute. Applying analogy of
English Law, where there is a saying “The king is dead, long live the King”; he
said; “The problem has been solved, long live the problem”. I may also refer
here what Chief Justice Bhagwati, as the Chief Justice of the High Court of
Gujarat had stated while dealing with and interpreting some of the provisions of
the Gujarat Panchayats Act, 1961. His Lordship observed;
“It is an extraordinary and unique piece of legislation framed without much
scientific accuracy of language and many of its provisions are so unhappily
worded that it is difficult to penetrate their confusion and obscurity. This is
not the first time that we are called upon to face the complexities of this
legislation and, with our growing acquaintance with its provisions, we must
confess to a feeling of reluctant respect which one feels for an old tough
sparring partner whom one has never been able to knock out.”
(emphasis supplied)
It is well-known that law does not
speak in a language understood by a common man. Brother Judges and the Members
of legal fraternity present here who have some experience in appearing in the
High Court must be aware of a provision as to Intra court Appeals or Letters
Patent Appeals as it has been described in some High Courts. Letters Patent of
the High Courts of Calcutta, Madras and Bombay as issued by Queen Victoria in
1865 confers in certain cases a right of appeal against the ‘judgment’ rendered
by a single Judge of a High Court to a Division Bench of the same Court under
Clause 15 of the Letters Patent. Friends, that Clause occupies half printed page
of a book. It is in about twenty lines and the full stop comes only at the end.
And when your reading is completely over, it is difficult to say whether you
have understood what it really means.
In England as well as in the
USA, a large section of the society has come forward agitating that all laws
should be simple and easily understandable. Let us hope that such agitation must
bring fruitful results. Mahatma Gandhiji had always emphasized on the simple
language of legal provisions advocating that if the laws are meant to be obeyed
by common men, they must be such that the common mass would be able to
understand them easily.
As to taxation laws, it has
been rightly said that taxes are what we pay for civilization. A good governance
requires money to discharge its obligations. With the changing concept of
Government, and duties of State, from a ‘Police State’, we have traveled to a
‘welfare State’, and the State takes care of its subjects from ‘cradle’ to
‘grave’. The activities of the State are not restricted to maintenance of ‘law
and order’. It also undertakes several public welfare activities. To secure for
people health, education, medical facilities and overall growth, we need money.
To make life real, meaningful and dignified, the State has to undertake such
exercise as a part of welfare activities which would require funding.
Unfortunately, however, devices of tax evasion and tax avoidance have increased.
Such tendency must come to an end. People at large must realize that
tax-planning is not forbidden but tax-avoidance and tax-evasion cannot be
allowed.
If we want to build on new
found opportunities in the era of globalization and liberalization, we must
remember that taxations are sinews of Common Wealth. It is thus a bonding force
between the civilized society and good governance. Hence, the solution lies in
building firmness of character in ordinary man of body polity of this nation, by
lifting the common value base of the community as a whole. In the current
scenario, we require to give a healthy outlook to the culture in the country.
The legal luminaries, galaxy of Advocates and members of legal fraternity
present here will discuss taxing statutes with reference to several new areas of
taxation. It is indeed a commendable work to explore the strength and weaknesses
of the new enactments and complexities arising therefrom for the tax payers
keeping in view powers of statutory authorities under various Acts. It is an
exercise of groping into territory of uncertainty. Thus, an effort of analyzing
complicated issues by the legal fraternity and experts in taxation is not only
commendable but will also be of great help to future generations. With this
hope, I inaugurate the Conference and extend good luck to the participants and
the organizers and wish the Conference grand success.