AUGUST 14, 2014

By S J Singh, Advocate

THE emphasis of modern administration and particularly of fiscal administration is to empower the administrative authorities with quasi-judicial powers to resolve the disputes between the administration and interests adversely affected by administrative actions. Numerous objectives are sought to be achieved by this mechanism. Easy, quick and inexpensive resolution of disputes and de-clogging of the traditional system of dispensing of justice are some of the aims of this mechanism. Constant endeavours are being made to ensure that the administrative or departmental authorities having the quasi-judicial powers are fair, impartial and judicious. The Government is striving to build trust between the adjudicators and adversely effected interests.

As an officer under the CBEC I was one such authority in whom the quasi-judicial powers were vested. As an adjudicating authority, to begin with, I use to fix two to four personal hearing in a day. At number of times I found that even when we had the acknowledgement of hearing notice having been served on the litigant, he would neither appear for hearing nor ask for adjournment. Normally, I was not fixing any other engagement on the days when personal hearings were fixed. Finding that non-appearance of the litigants was preventing me from using my time productively, I gradually started fixing up to ten to twelve hearing in a day under the belief that even if 25% of the persons appear, I would have sufficient work for the day. To my utter dismay, it was found that on certain days not even a single person would appear. My discussion with other colleagues revealed that the situation with them was not different. The situation changed only when I became Commissioner. In ten years, when I was Commissioner, about 70% persons appeared either for the hearing or for seeking adjournment.

The despondency of the persons towards their impending liability of duty/tax, interest and penalty was very perplexing to me. It was, however, found that the same persons were very vehemently contesting their liability before the Appellate authorities, particularly before the Tribunal. They, very often, got the relief from the appellate authorities. Sometimes, I use to wonder that if the same pleas were taken before me as taken before the Appellate Authority, perhaps I would have reached the same conclusion as the Appellate Authority had reached and the person would have saved his time and money. But, alas, that was not done.

My very deep introspection told me that the taxpayers had no trust in sense of justice of the Departmental authorities and they had reasons to believe that more often than not the adjudicating officers shall confirm the demand made in the show cause notice, demand interest and impose penalty. The taxpayer, therefore, very prudently, stayed away from the departmental adjudicating authorities by making perfunctory written submissions but not appearing for personal hearing which is more time consuming and costly. It is the trust deficiency which has driven away the taxpayers from the departmental adjudicating authorities.

This deficiency is not caused by laws, rules made by the competent authority and manuals, circulars and instructions issued by the Central Board of Excise and Customs. On the contrary, the Board has issued instructions to the officers of the Department to be fair and just while adjudicating the disputes with the taxpayers.The "Draft - Adjudication Manual" of CBEC, under the topic of "General Importance of Adjudication" at page 4 provides as under:

"The authorities exercising quasi- judicial function are duty bound to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The public is entitled to have assurance that process of correction is in place and working. It is requirement of the law that correction process of judgements should not only appear to be implemented but also seen to have been implemented. These functions, therefore, cast a heavy responsibility on the officers invested with the power of adjudication and confiscation to use it with utmost care and caution, free from any prejudice or bias, so that innocent does not suffer by any injustice done to him and the real offender does not escape the punishment provided by law."

It is also provided on page 4,

"…….. If an innocent person is punished or the punishment is more than warranted by the nature of offence it may undermine the trust between the government and the public……………….."

Still further, at page 13 & 14 of the said draft manual, while dealing with the "Principles of Natural Justice" it has been provided:

"………..Judicial and quasi-judicial authorities should exercise their power fairly, reasonably and impartially in just manner and they should not decide a matter on basis of an enquiry unknown to the party, but they should decide on the basis and material on record. Their decisions should not be biased, arbitrary or based on mere conjectures and surmises……………….."

There, thus, are laudatory principles that the departmental adjudicating authorities are required to apply at the time of adjudication of disputes. The principles have been enunciated to ensure justice to the taxpayers and to promote trust between the government and the public. A trust worthy system of adjudication of disputes would promote certitude of law, equality, bonhomie among various stakeholders and better compliance of law. It would also lead to better revenue collection.

But, alas, the laudatory principles have not achieved equally laudatory results. The Departmental officers, where I served for 32 years, are more concerned with the safety of the career than the instructions in the manual or the sense of justice which the public service demands. The mistrust in their own system of dispensing justice with respect to their career is so domineering that they forget about objectivity, fairness and sense of justice. Most of the time they avoid taking decisions on contentious issues where revenue stakes are high.When circumstances force them to take decision then principle of "my safety first" is adopted and principles of fairness, reasonableness and impartially are forgotten. Unfortunately the mistrust with their own system is so deeply engrained and so widely pervasive that even realistic arguments do not work with the officers.

In my career of 32 years, only two times, that too in my initial two or three years, I was asked to explain why I had taken particular views while adjudicating cases when I could have taken pro-revenue views. On my submitting explanation the matters were closed. It is not to suggest that all my adjudication orders were "accepted" by the higher authorities. On the contrary, most of them were reviewed and appeals were filed against them.

However, as a Commissioner, when I reviewed the order of officers subordinate to me, I never asked any officer to explain why a particular view was taken. The focus of review was always whether the view taken was legal and proper. It was perhaps preordained that most of the times I had to review only pro-revenue orders. However, whenever I reviewed an "anti-revenue" order,no aspersions were ever cast on any officer for taking a particular view. I must hurriedly admit that at no occasion the higher authorities had ever cast any aspersions on me for taking even so called "anti-revenue" view. In my 32 years of career, I have not come across any instance when an officer has been hauled up for taking a particular view when he had passed a speaking order justifying his view. His view might not have been "accepted" in review proceedings but no harm was done to the officer. It is in my knowledge that a senior officer suffered when he adjudicated old pending cases against the interest of revenue. In that case, the adjudications were required, by instructions, to be kept pending as the cases were linked to audit objection by CAG and the objection was still not settled. Canard went around that the officer was penalised for liquidating the very old pendency. Only a few officers knew the truth, others were happy with the canard. Some officers have bolted their career by overstepping their jurisdiction or passing orders for extraneous considerations. Such instances were very rare. Without an exception, whenever, an officer suffered for passing adjudication it was for proven mistake or misconduct. To the best of my knowledge, the Departmental authorities have never inflicted punishment on any officer unless there was reasonable ground to conclude that the officer had knowingly violated certain instructions or there were reasons to believe that the conduct of the officer was reprehensible. It is a different matter that Central Administrative Tribunal or higher courts took different view in some of these cases. Such incidents are not abnormal in administration of justice in this country.

I once asked the Director General of Vigilance, about the number of officers whose conduct was under enquiry simply because they had taken so called "anti-revenue" view but had passed speaking order justifying the view taken by them. I was told by the DG that there was no such case in his office. He also added that to the best of his knowledge he had not come across any such case in his career. I had all reasons to believe the truth in the statement of DG.

During my days in the Department and even now, I often ponder, is it that the pervasive mistrust with their own system is sitting like a ghost on the backs of the officers and colouring their vision and fettering their discretion? Or, is it that there is lack of knowledge of law and procedure and, therefore, there is lack of courage to take the correct decision and ghost is only an excuse for not taking correct decision? Or, is it mixture of both the situations. But, in all such circumstances the adjudicating authorities follow the safe route and pass "pro-revenue" order without caring if the order is legal and proper and more importantly just and fair. In such a milieu, the laudatory goal of building the trust between the Government and the public is a casualty for which no tears are shed. The "pro-revenue" order is a 'delicious cake with desirable topping' for everyone in the Department. It keeps the adjudicating officer and his support staff "safe" and more contented are the officers and the authority/authorities that review such orders. Such orders are "accepted" with one axiomatic line, "The order is pro-revenue, legal and proper." All officers up to Commissioner/Chief Commissioner sign the dotted line without bothering to understand the propriety of the order.

The acceptance of a fair and proper speaking order which is against the interest of revenue requires correct understanding of law and some courage and conviction. The unfounded but lurking fear of some trouble in future shuts the thinking faculties and all requirements of unbiased and impartial views are thrown out of the window. If any senior officer in the hierarchy, which is involved in the review proceeding, is nearing promotion, then judiciousness is the first causality. If the senior most in the hierarchy is nearing promotion or retirement then even oral instructions are issued that no "anti-revenue" order should be put up for acceptance. On the contrary, only draft review directions should be put up.

In my ten years of career as Commissioner, I could not exorcize the ghost from the minds of my subordinate officers even when I did not put to scrutiny the conduct of any of my officer who had passed "anti-revenue" orders. I was given the same treatment by my senior officers though many of my orders which, in my view, were legal, proper and just were not accepted by the senior officers and were appealed against. I, however, continued to adjudicate in accordance to my understanding of law and without the ghost on my back. All my exhortations to my officers to be fearlessly judicious failed to have the desired effect. Perhaps the canards had more pernicious influence on their minds than captivating influence of the real story. Or, perhaps they thought that I had reached the highest level of my inefficiency and was not worthy of emulation. Whatever may the situation, the fact is, it takes years to build trust but it takes one incident to lose it. The trust is often lost by suspicion than by the proof of lack of it. The departmental adjudicating authorities have, inexplicably but unfortunately, lost the trust. I hope the new generation of the officers shall strive to regain it. Only a trust worthy adjudicatory process can further the cause of revenue. Only when, not only the justice is done but it is seen to have been done that the trust would be reposed.

(The author is a former Commissioner of Central Excise.)