Shivakantjha.org - The syndrome of fulsome taxpayer-friendliness needs a relook!
The syndrome of fulsome taxpayer-friendliness needs a relook!
By Shiva Kant Jha
YOU have spoken nice pet ideas about so-called
taxpayer-friendliness. You would surely receive appreciation in the media. But
I, as a citizen, find them flawed. Please read what Mahatma Gandhi had said
( as displayed in Gandhi Smriti, Birla House, New Delhi):
“I will give you a talisman. Whenever you are in doubt or when the self becomes
too much with you, apply the following test:
Recall the face of the poorest and weakest man whom you have seen and ask yourself
if the step you contemplate is going to be of any use to him. Will he gain anything
by it? Will it restore him to control over his own life and destiny? In other
words, will it lead to Swaraj for the hungry and spiritually starving millions?
Then you will find your doubts and yourself melting away.”
And then ask yourself : Is it fair and just to show indulgence at the cost of
the millions of the suffering souls of the country. When you come to Bihar please
travel by road from Patna to Darbhanga. Every second man's face would be the
face to which Gandhiji refers. This talisman would help you steer your course
through the dense fog whether it is the matter of taxation, or of the WTO. One
instance of how the government works I had taken to the Delhi High Court on
a PIL . Please read the judgment of the Delhi High Court in Shiva Kant Jha Vs
Union Of India 256 I.T.R 563 . The Court went to the extent of stating:
“ We would however like to make an observation that the Central Government will
be well advised to consider the questions raised by Shri Shiva Kant Jha who
has done a noble job in bringing into focus as to how the Govt. of India had
been losing crores and crores of rupees by allowing opaque system to operate.”
It is no joy for a citizen to see his government sailing with a tax haven adopting
as its own the pleas advanced by the tax haven's counsel indifferent to the
values without which no democratic government is worth its salt. The Government
went on appeal to the Supreme Court. I told the High Court that in fact I represented
the revenue; and I was at a loss to understand whose interests the Government
wanted to protect. Whatever be the decision of the Supreme Court (which reserved
its judgment on Feb. 26, 2003) the Government of this Republic must ponder over
what happened. That case was a biopsy on the tax administration at work. But
what came out therein is just one fifth of the iceberg. If you look into the
whole of this part, I am sure, with your courage and imagination, you would
be able to measure the whole of the iceberg. That would help you to do what
you can to save the ship of our motherland from the doom of the Titanic.
Over years the Income-tax Department has lost both will and skill without which
investigation can not be conducted. Your ideas would depress them further. Already
we have reached a state when, not to say of the mighty multinationals, even
glittering grocers' shops of the so-called economic metropolis succeed in derailing
the tax administration even by dropping name those on the Olympus. Revenues
when due must be collected per law. And law must be enforced with full vigour.
Ulterior purpose is illegitimate as it amounts to mala fides. The authorities
under the Income-tax Act are the creatures of the statute with fully defined
functions, and wholly articulate purpose. They are, in effect, members of a
statutory civil service playing prescribed roles within statutory structure.
Here they differ from the members of the IAS though no Revenue Secretary ever
recognizes it. It is their duty to collect taxes not a paisa less, not a paisa
more. There is no scope for friendship inter se the tax gatherers and taxpayers.
We must remember what the highest court of England said in Collco Dealings LTD
v. IRC [1961] 1 All E R 762 at 765, per Viscount Simonds in the context of a
Double Taxation Avoidance Agreement:
“But I would answer that neither comity nor rule of international law can be
invoked to prevent a sovereign state from taking steps to protect its own revenue
laws from gross abuse or save its own citizens from unjust discrimination in
favour of foreigners.”
To trust the taxpayers is good; but it is public duty to keep them under effective
scrutiny. In my considered view the tax gatherers have become more friendly
with the taxpayers than what their statutory role permits. While considering
the high pressure (and even crypto-psychic persuasion) lobbying for friendliness
let us not harbour illusions born of design or ignorance. Let us not forget
what Freud said:
“There is something to be said, however, in criticism of this disappointment.
Strictly speaking it is not justified, for it consists in the destruction of
an illusion. We welcome illusions because they spare usunpleasurable feelings,
and enable us to enjoy satisfaction instead. We must not complain, then, if
now and again they come into collusion with some portion of reality, and are
shattered against it.”
When the persuaders and lobbyists, howsoever decorated with credentials, try
to convince you, please remember Gandhi's talisman which even Granville Austin
quoted at the very threshold of his book ( Working of a Democratic Constitution,
Oxford,1999) which you must have gone through. If you do not read the tomes
of the World Bank, IMF and the pleadings, with concealed sinister premises by
most of your experts, no harm would be caused, but never stop reading history.
The history of the deeds of the crooks and knaves would show that they script
their plot in the same way. Read how Clive promoted “sponsored” Indian state
controlled but not administered. How the comprador bourgeois sold through cryptic
maneuverings the Nawabi to the East India Company. The history of that time
would show how the foreign companies demanded (and got) more and more tax exemptions,
more and more lowering of tariff barriers. Be careful while evaluating what
our Mir Jaffars say as we have already seen enough of England's “White Man's
Burden”, France's “Civilizing Mission”, and Germany's Kultur. We have numerous
examples of the sovereign governments selling themselves.. H.G. Wells writes
at p. 226 of his A Short History of the World (Penguin Books) that Louis XIV
made bribery a state method almost more important than warfare, and Charles
II of England was in his pay, and so were most of the Polish nobility, presently
to be described.”
The modern geo-political realities should not be evaded. The
Memoirs of Extraordinary Popular Delusions and the Madness of Crowds by Charles
Mackay is still worth reading. There are reasons to believe that, whatever be
their status in public international law, many governments are conducting themselves
as if they are commercial wares on the selling counters of market covert of
the present-day global market whose shockingly perilous manifesto can be best
subsumed in the graphic and suggestive words of a film song: yahan har cheej
bikti hai : to say this in learned language, on this counter vices and virtues
are all res commercium. Often our intellectual hubris blocks our mind. We should
keep in our mind what Pandit Nehru wrote in Glimpses of World History about
President Wilson, Lloyed George, and Clemenceau assembled to frame the Treaty
of Versailles: “…. And to these three men fell the great task of moulding the
world afresh and healing its terrible wounds. It was a task worthy of supermen,
demigods; and these three men were very far from being either. Men in authority
_ kings, statesmen, generals, and the like _ are advertised and boomed up so
much by the Press and otherwise that they often appear as giants of thought
and action to the common people. A kind of halo seems to surround them, and
in our ignorance we attribute to them many qualities which they are far from
possessing. But on closer acquaintance they turn out to be very ordinary persons.
A famous Austrian statesman once said that the world would be astounded if it
knew with what little intelligence it is ruled. So these three, the “Big Three”,
big as they seemed, were singularly limited in outlook and ignorant of international
affairs, ignorant even of geography!”
This reading is cathartic. J Bronowski has aptly said in his Ascent of Man:
“ There are many gifts that are unique in man; but at the centre of them all,
the root from which all knowledge grows, lies the ability to draw conclusions
from what we see to what we do not see, to move our minds through space and
time, and to recognize ourselves in the past on the steps of the present.”
I would pray to consider from the observation-post of the common people what
this abracadabra about economic fundamentals means. Under our tradition we have
attached greatest importance to intuitive understanding. This so as truth is
never a casualty when intuitively understood. Statistics and logic are most
often fudged; (and that too by those who do public duty and hold power on trust).
Please think about the composition of our waxing foreign reserve and ask yourself:
how made? For whom? To what purpose? While deriving joy from the waxing foreign
exchange reserve just recall Gandhi's talisman. History has put on our government
enormous responsibility in this phase of globalization.
It is quite evident there is a shocking mismatch between the
national political structure and the global economic institutions with overarching
impact, and no public accountability. This is a world where the rich are getting
richer in substantially opaque system of global economic exploitation of the
poor. Unless corrected the national governments are fast being driven to a point
where it would cease to exist for public good. And we all know that we reap
consequences, not miracles. Thomas Balogh rightly pointed out in 'The Irrelevance
of Conventional Economics' : “The modern history of economic theory is a tale
of the evasions of reality”. But will you like to hear it from a mere citizen?
I hope so; though I cannot forget what Prof Galbraith said in his A Short History
of Economics ( at p. 236}:
“Here another constant in economic life: as between grave ultimate disaster
and conserving reforms that might avoid it, the former is frequently much preferred”
I am sorry to say that this constant is at work in our country; and those who
know it are silent foreboding ill for our motherland.
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