Taxation is a burden we all must share for the development of civilization. We have opted for a welfare State under our constitution which calls for an honest sharing of the tax burden. The State as the tax collector has been devising ways and means not only of equitably distributing the incidence of tax but also of ensuring payment of tax for which Tax Professionals have always extended a helping hand.

Ordinarily people do not like taxes-left to themselves. They would not pay any tax as it entails parting of money earned by hard labour, but tax is an important instrument in the governance of the country in one form or the other. No government can run administration or provide facilities to the citizens or execute welfare activities without taxation as it is an important source of revenue.

After independence the people of India have given themselves a federal constitution with the object of having a welfare state, through democratic process in the form of parliamentary system of Government. A developing country like ours has many projects and plans for achieving all round development of the country. In order to implement the plans and projects Government needs revenue, hence taxes.

In the modern state, taxes are necessary for the welfare of the people.

Justice Holmes said – “Taxes are what we pay for civilized society, I like to pay taxes, with them I buy civilization.”

But whether it is really correct in the today’s atmosphere is difficult to say. It reminds me what my Lord Hon’ble Mr. Justice Arijit Pasayat said few months back in Diamond Jubilee function of Income Tax Bar Association, Varanasi.

Justice Holmes: I quote :­

“Taxation is price which pay for civilization, has the reflection that if the price is too high, civilization will be threatened by corruption. If the price is too low, civilization will be threatened by violence. What is therefore, required is striking of proper balance. As observed in Commissioner of Wealth Tax Gujarat II vs. Shri Arvind Narottam, AIR 1988 SC 1824, “unless waster and ostentatiousness are avoided or eschewed no amount of moral sermons will change peoples’ attitude to tax avoidance.”

“It is often said that two things are certain in life – i.e., death and taxes. But as someone said in lighter vein, physical death comes only once, but taxes bring apprehension of death at the time of every annual budget. “

I unquote,

For the proper implementation of the tax laws the society need efficient lawyers, tax consultants and the devoted departmental officials for the proper interpretation of the laws which are quite complex and complicated.

I will like to stress here the increased responsibilities of Tax Professionals in the vast unfolding transformation. Tax Professionals in the industrial and commercial capitals of India are already deeply involved, and indeed often suggest the direction, tax policy, in order to serve the new ethos. In contrast, the scene seems comparatively quiet here. But I am certain it will not be long, before Tax Bar is also caught up in that vertex. The quality of our service to the citizen has always been significant, but it will have profounder consequences for both the citizen and taxation.

The implementation of the tax laws depends upon the approach of the authorities who are to administer the said laws. The authorities constituted under the Tax Acts are required to act as administrative authorities as well as quasi judicial authorities, for example, the Commissioner, Income Tax is the administrative authority but while exercising the powers of revision under section 263 or 264 he acts as a quasi-judicial authority. There are certain authorities, who are exclusively exercising the quasi-judicial functions viz. the Deputy Commissioner (Appeals). Even the assessing authorities, whether he is Income Tax Officer or the Assistant Commissioner of Income Tax or Sales Tax Officer are required to act both as quasi-judicial authorities (when they are working as the assessing authorities) and as administrative authorities when they have to perform the administrative work also, under the Act.

The requirement of acting judicially is nothing but is requirement to act justifiably and fairly in accordance with law. The rule of law also requires that the administrative bodies should administer law with a judicial approach
and it should discharge its function fairly and justly.

Advocates and Tax Professionals have great and important duties to discharge. We have to advise our clients to pay due tax and at the some time we have to save them from undue harassment and protect them from illegal levy and illegal actions of tax authorities by approaching the great judiciary of our country for redress.

For taxes once Mr. N.A. Palkhivala said:

“Taxes are the life blood of any Government but it cannot be overemphasized that the blood is taken from the arteries of the tax payers and therefore, the transfusion has to be accomplished in accordance with the principle of justice and fair play.”

“Every Government has a right to levy tax but no Government has a right in a process of extracting tax, to cause misery and harassment to the tax-payers and the gnawing feeling that he is made victim of palpable injustice.”

In so far the Sales Tax is concerned the era of VAT is going to give new opportunities to the younger generation of the Tax Professionals who are going to be the pillars of the coming years.

Erosion in Judiciary: Causes and Cures

The Judiciary in India is still one of the finest State institutions of post-independent India upholding constitutional government, rule of law and democracy through difficult situations and against varied challenges. By and large the people of the country including the minority communities, opposition parties and oppressed sections of the society continue to hold the judiciary in high esteem and recognize its authority, impartiality and commitment to constitutional values.

Sobriety and balance – Need of the hour

In analyzing the problem one need not adopt an alarmist or pessimist attitude. After all every institution in a democratic society is bound to reflect in varying degrees its disappointments and aspirations, its cultural traits and class conflicts. These are inevitable and, to a certain extent, desirable in a pluralist developing society. The reassuring fact in this evolutionary process in our Constitutional history is that despite the stresses and strains in the political system and the erosion of judiciary in countries elsewhere in the world, the Indian judiciary gave a good account of itself, for which every citizen can be justifiably proud of.

Erosion of values

There has been erosion of values in every walk of life and our tax dispensing system could not remain unaffected, at certain levels, from this epidemic.

By “erosion” in this context I mean the decline in the degree of esteem and reverence for the judicial and quasi-judicial authorities on the part of the people and the decrease in the standard of authority and legitimacy over matters legal and constitutional.

Therefore ‘erosion’ can only be discussed in a relative sense and the emphasis to one or other cause of erosion depends on the value premises of the evaluator and his own understanding of the role of the judicial and quasi-judicial authorities in democratic polity.

Under the circumstances the responsibilities of Tax Professionals and Advocates have increased, since the institution is more important than the individuals who occupy it at any given point of time and the deficiencies of individuals should not be allowed to erode the status of the institution.

If the presiding members of Tax Tribunals, quasi-judicial authorities and Judges are clean, competent, devoted and independent, there cannot be any erosion in judiciary and all malicious attacks can be boldly and decisively faced. While exposing and disciplining them, Tax Consultants and Advocates must strive to adopt such preventive measures to avoid a greater calamity in which the people may be forced to resort to drastic remedies which may be worse than the disease.

One can think of many remedial measures to contain the erring persons and control the decline in judicial standards.

We may need (a) an all India Judicial Service, (b) a college for compulsory training and continuing education for Presiding Officers (c) a code of conduct for judicial behaviour (d) and appropriate collegium in every High Court to enforce the code of conduct.

Lawyers and erosion in Judiciary

Erosion in judicial system is more often than not, preceded by erosion in the bar. The sudden increase in the number of Tax Professionals with concentration of work in the hands of few at the top has led to fierce competition and commercialization of legal services. This in turn resulted in the adoption of questionable methods in getting work. Caste rivalries, party politics and unethical business methods slowly got into the working of the Bar casting its evil influences also on the judicial and quasi judicial system.

Industry, intelligence and independence, once considered essential traits of yester years are slowly replaced by intrigue, cunning and corruption.

These things must be avoided by Tax Professionals.

The only silver lining in this depressing exercise in professional suicide is that the number of erring persons are still few and many of them do try to correct themselves when emotion subsides and judicial sense regains.

It is, therefore, essential to adopt preventive steps for redeeming the unity of the bar and the bench and projecting a proper image of the judiciary through the thoughts and actions of every member of the bar. Here again the possibilities are many some of which are:­-

1. A vigorous and effective administration of disciplinary control by the Bar Council on Advocates and Institutes of Chartered Accountants on CAs.

2. Streamlining the organization and functioning of bar associations for professional purposes.

3. Better legal education with emphasis on professional ethics and continuing education for improved advocacy, which AIFTP is trying to do at its level for its members.

4. A more egalitarian pattern of distribution of work and opportunities for rising to the top.

5. Periodical judicial conferences at different levels of Tax Professionals, which AIFTP has been continuously holding at different parts of the country in different Zones.

Lawyers and tax professionals are inseparable parts of the judicial system. They add glory, dignity and prestige to the institutions they belong. They are equal partners in the process of dispensation of justice. Their very existence is to uphold and promote the majesty of law and protect the assessees from the harassment and undue extraction of money at the hands of the authorities implementing the tax laws.

In the end I give some THOUGHTS TO PONDER for Tax Professionals: ­

• FREEDOM cannot prevail in a CORRUPT Society.

• TOLERANCE beyond the point of absurdity is not a VIRTUE.

• Today’s PROBLEMS are the result of yesterday’s SHORTSIGHTED solutions.

• Our greatest DANGER is not guided Missiles but MISGUIDED THINKING.

• We have to PROTECT not what we have inherited but what we are leaving for our CHILDREN.