Though law should be dynamic changing in tune with the time, an amount of stability is necessary in respect of Fiscal Laws. This applies to statutory as well as judgemade laws. Just as a long term Fiscal Policy is essential for the States, stability in Fiscal Law is essential for proper administration and compliance. In this context one has to look at the various changes in Tax Laws, brought about by statutory amendments and judicial pronouncements. An instance in point is the amendment to section 254(2A) by the Finance Act, 2007. The Supreme Court has categorically held almost four decades back that the Appellate Tribunal in exercise of its appellate jurisdiction, notwithstanding in the absence of specific statutory provision, has the inherent power to grant interim relief so as to make an appeal effective and not to render it illusory. This system was working satisfactorily, but, however, Parliament stepped in with an amendment by the Finance Act of 2001. This amendment led to increase of administrative work calling for successive stay applications where the appeal is not disposed of within 180 days even for valid and just reasons. The Finance Act of 2007 has substituted by three provisos making matters worse. To add to the confusion, a Circular dated 19-7-2007 has been issued by the Income Tax Appellate Tribunal, which is a commentary on the amendment introduced by the Finance Act of 2007. The Circular enlarges its scope and adds to the problems brought in by the amendments. While the second proviso introduced by the Finance Act of 2001 itself was not called for, the present amendment brings in more confusion into a system which was otherwise working satisfactorily. It may not be out of place to refer to the recent decision of the Supreme Court in Union of India vs. Dharamendra Textile Processors (delivered on 19-7-2007) [212 CTR 432], that set the clock back in respect of penalties under Direct Tax Laws. Though penalties in fiscal statute cannot be equated to punishment under criminal law, a series of judgments of the Apex Court had accepted the relevance of mens rea in penal proceedings. The subsequent statutory amendments brought a change in judicial approach holding that though mens rea is not an essential ingredient, the onus lies on the Department. The statutory amendments by way of explanations brought in deeming provisions for the levy of penalty. The ratio in the Catena of decisions starting with Anwar Ali, Khoday Eswarsa Sons, was reversed in the subsequent decisions in Mussadalal Rams, Anantharam Veerasinghaiah, Sadayappa and K.C. Builders.

The law got settled with the decisions in Dilip Shoff and Ashok Pai where the Supreme Court struck correct note in regard to penalty proceedings and light was seen at that end of the tunnel.

The recent decision of the Supreme Court in Dharamendra Textile Processors case recommending reconsideration of Dilip Shroff case by a larger Bench has, however, upset the apple cart and set the ball rolling again. I may also refer to the recent case of Rakesh Kumar Gupta which raised the issue of applicability of the Right to Information Act in respect of quasi-judicial and judicial proceedings of Tribunals and Courts. One of the issues that arose was that the accessibility to the minutes maintained by the Members of the Bench as part of the proceedings before the Tribunal. It was contended that such minutes are not accessible to third parties, as they fall within sec. 8 (1) of the Act. Various other issues that arose in that case are bound to have serious ramification in the justice delivery system. One would expect that the natural extension of Right to Information would include records which are directly connected with public issues and viewed in this manner, the minutes maintained by the Members or record of arguments and submissions in Courts and Tribunals maintained by Judges and quasi-judicial authorities are vital documents relevant to public issues. A conclusion in this case is bound to have considerable impact on issues relating to judicial and quasi-judicial proceedings.

V. Ramachandran
President