MAY 04, 2022

By Vijay Kumar

COURAGE is what it takes to stand up and speak; courage is also what it takes to sit down and listen.

When the highest judge stands up and speaks, we should all sit down and listen.

In the recent conference of Chief Justices and Chief Ministers, the Chief Justice of India made some remarkable remarks. Though made in general terms, many of those comments apply to Revenue and Tax mutatis mutandis.

The CJI said,

All of us are constitutional functionaries and we abide by the constitutional mandate; the role assigned to each of us needs no reiteration; the constitution provides for separation of powers between the three organs clearly outlining their sphere of functioning delineating their power and responsibilities; it is the harmonious and coordinated functioning among the three organs of the state that has preserved and strengthened the democratic foundation of this great nation over the last seven decades.

While discharging our duties, we all must be mindful of the Lakshmanarekha. The judiciary would never come in the way of governance if it is in accordance with law. We share our anxiety and concern regarding the welfare of the people.

Is this addressed to those taxmen who think that judges are a hindrance to tax collection. Shouldn't you remember that your job is to collect taxes - there is the legislature to make laws and the judiciary to judge disputes. You should only be an executive and should not try to be a legislature and judge in addition. The courts will not come in your way collecting taxes if it is in accordance with law .

The CJI explained:

If a tahsildar acts upon a grievance of a farmer regarding land survey or a rational card the farmer would not think of approaching the court. If a municipal authority or a gram panchayat discharged its duty properly the citizens need not look to courts. if revenue authorities acquired land to due process of law the courts would not be burdened by land disputes.

it is beyond my understanding as to why intra-interdepartmental disputes of the governments or fights between public sector undertakings and the governments end up in courts. If service laws are applied fairly in matters of seniority, pension and so on, no employee will be compelled to go to courts. it is well known and the acknowledged fact that government are the biggest litigants, biggest litigants. If police investigates properly, fairly, if illegal arrests and custodial torture comes to an end, then no victim will have to approach the courts. Abiding by law and constitution is the key for good governance; however this is often ignored; the opinions of law departments are not sought in the rush to implement executive decisions.

This could as well be:

If a tax commissioner acts upon a grievance of a taxpayer regarding registration or credit or refund, the taxpayer would not think of approaching the court. If the tax authority discharged its duty properly, the assessee need not look to courts.

The Hon'ble CJI sadly stated:

it is beyond my understanding as to why intra-interdepartmental disputes of the governments or fights between public sector undertakings and the governments end up in courts.

If the Chief Justice of the Country does not understand why disputes between government departments and institutions should end up in courts, there is something terribly wrong with this system. But Chief Justice Ramana is not the first judge to feel the pain of litigation between the left hand and the right hand.

This story is long but in short:

Thirty years ago, by Order dated 11.9.1991, the Supreme Court noted that  "Public Sector Undertakings of Central Government and the Union of India should not fight their litigations in Court".

This was followed by the order dated 11.10.1991 by a bench headed by CJI Ranganath Misra, with judges P B Sawant & S Mohan, in the famous ONGC case - 2002-TIOL-196-SC-CX wherein the Court directed the Government of India  "to set up a Committee consisting of representatives from the Ministry of Industry, Bureau of Public Enterprises and Ministry of Law, to monitor disputes between Ministry and Ministry of Government of India, Ministry and public sector undertakings of the Government of India and public sector undertakings between themselves, to ensure that no litigation comes to Court or to a Tribunal without the matter having been first examined by the Committee and its clearance for litigation".

Thereafter, in 1994 another distinguished bench consisting of CJI M N Venkatachaliah, P B Sawant & S Mohan - 2002-TIOL-628-SC-CX directed that in the absence of clearance from the "Committee of Secretaries" (CoS), any legal proceeding will not be proceeded with.

This continued for nearly twenty years in perfect chaos with appeals and petitions actually increasing and PSUs and government departments spending more money and resources in reaching the courts through the Committee of Secretaries. In the ECIL case in 2011 - 2011-TIOL-18-SC-CX-CB, another distinguished five-judge bench headed by CJI S H Kapadia, Mukundakam Sharma, K S Panicker Radhakrishnan, Swatanter Kumar and Anil R Dave observed,

The idea behind setting up of this Committee, initially, called a  "High Powered Committee" (HPC), later on called as "Committee of Secretaries" (CoS) and finally termed as "Committee on Disputes"  (CoD) was to ensure that resources of the State are not frittered away in inter se litigations between entities of the State, which could be best resolved, by an empowered CoD. The machinery contemplated was only to ensure that no litigation comes to Court without the parties having had an opportunity of conciliation before an in-house committee .

The Committee was chaotic. Even the Supreme Court in the above case cited two instances:

1. There was a Modvat Credit dispute between the Central Excise Department and Electronics Corporation of India Ltd, a Central Government Public Sector Undertaking ("PSU"). As usual, the Commissioner confirmed the demand. The PSU assessee decided to challenge the same by filing an appeal before CESTAT. Accordingly, the assessee applied before the Committee on Disputes (CoD). However, the CoD vide its decision dated 2.11.2006 refused to grant clearance though in an identical case the CoD granted clearance to Bharat Heavy Electricals Ltd. (BHEL). So, the assessee filed Writ Petition No. 26573 of 2008 in the Andhra Pradesh High Court, which was dismissed. Against the order of the Andhra Pradesh High Court the assessee has moved the Supreme Court by way of a special leave petition.

2. Bharat Petroleum Corporation Ltd won a case in the Tribunal. Aggrieved, the Commissioner moved the Supreme Court in which the assessee preferred I.A . No. 4 of 2009 requesting the Court to dismiss the Civil Appeal filed by the Department on the ground that CoD has declined permission to the Department to pursue the said appeal.

A Larger Bench of the CEGAT in GAS AUTHORITY OF INDIA LTD v COMMISSIONER OF C. EX., VADODARA - 2002-TIOL-398-CESTAT-DEL-LB, made some caustic remarks about the working of the Committee:

Forty persons were present at the meeting of this High Power Committee which took up many cases. The decision arrived at by this crowded body -------

The High Power Committee in the case on hand dealt with the issue in a casual manner only to give an impression that the direction of the Supreme Court is complied with. Committee should not have approached the issue to say the least, in the casual manner adopted at its meeting held on 10-6-1996.

So, finally, the Supreme Court decided to withdraw its earlier orders on the Committee system and PSUs and Government were allowed to freely contribute to the bulging dockets of the Courts. Government of India vs Union of India became fashionable and lucrative again.

Eleven years later, the Chief Justice is still wondering why government fights government. Should this be reviewed? In the meanwhile, the concept of PSU has undergone a major change. It is now felt that it is not the government's business to do business. But nobody disputes the government's sovereign power to litigate.

Coming back to the CJI's speech - he observed,

The decisions of the court are not implemented by governments for years together - the resultant contempt petitions are a new category of burden on the courts which is direct result of defiance by governments. Deliberate inaction by the governments despite judicial pronouncements are not good for the health of democracy. The judiciary is also confronted with the issues of the executive willingly transferring the burden of decision making to it although policy making is not our domain but if a citizen comes to the court with a prayer to address his grievance the courts cannot say no.

How much of defiance and disobedience, we see in the Revenue departments, causing taxpayers to approach the courts multiple times, for reliefs which are not granted even after court orders.

The CJI summarized that:

often litigation is triggered because of two major reasons:-

1. one is non-performance by various wings of the executive,

2. second is the legislature not realizing its full potential

I am sure you will all agree with me that these are avoidable burdens on judicial system.

Let us hope the government listens.

I cannot avoid the temptation of adding another event to this week's column. Almost around the same time the CJI was pleasantly expressing his anguish, White House Correspondents' Dinner saw some great American democratic humour. I would like you to read a few jokes by America's famous comedy star Trevor Noah at the dinner.

You guys spent the last two years telling everyone about the importance of wearing masks and avoiding large, indoor gatherings. Then the second someone offers you a free dinner, you all turn into Joe Rogan, huh?

Trump said he won the election, but everyone was able to look at the numbers and see that he was wrong. That's why Ron DeSantis is one step ahead. First you ban the math textbooks, then nobody knows how to count the votes.

To Biden: "I was a little confused about: Why me? But then I was told you get your highest approval ratings with a biracial African guy standing next to you."

And I think ever since you've come into office, things are really looking up. You know, gas is up, rent is up, food is up, everything.

As you all know, President Biden's lack of a filter does get him into hot water sometimes. Last month, he caused a huge international scandal saying that Vladimir Putin should be removed from power. It was very, very upsetting - to Russia. Until someone explained to them that none of the stuff Biden wants actually gets done.

This is the golden era of conspiracy theories, whether it's the right wing believing Trump can still win the 2020 election, or the left believing Joe Biden can still win the 2024 election.

Please be careful leaving tonight. We all know this administration doesn't handle evacuations well.

And he concluded solemnly,

"In America, you have the right to seek the truth and speak the truth, even if it makes people in power uncomfortable, even if it makes viewers or readers uncomfortable. You understand how amazing that is? I stood here tonight, and I made fun of the president of the United States and I'm going to be fine."

Turning to Biden, he asked, "I'm going to be fine, right?"

Until Next week