Brother Katju, Judge, Supreme Court, Justice

S. R. Alam, Justice Pradeep Kant, Judges of Allahabad High Court, Justice Rajesh Bindal, Judge, Punjab & Haryana High Court other Hon’ble Judges present and past, Shri Bharat Ji Agrawal, the National President of All India Federation of Tax Practitioners and Shri H. C. Bhatia the Chairman of the Federation (NZ), respected Sr. members and other members of the Bar, the Vice Chancellor, Allahabad University, members of the Law Faculty Allahabad University, my young friends participating in the competition, .... Ladies and Gentlemen.

Many of you present here must have known and seen late Sri Raja Ram Agrawal but some may not have had that good fortune. I had that chance luckily, when I first saw him appearing in some cases at Lucknow, in his capacity as the Advocate General for the State of Uttar Pradesh. It was some time in mid seventies. Anybody would feel attracted by his fascinating manner of placing his arguments. So was I, He was soft spoken and used to be absolutely cool and unruffled. But I had a real feel of it about a decade later, while hearing a matter as a member of the Bench with a very senior Brother Judge of mine Mr. Justice U. C. Srivastava, Shri Agrawal was representing some industries allegedly polluting the river by discharging untreated poisonous affluent into it. Till then, such a question about restraining and injuncting private bodies, from doing so, in exercise of writ jurisdiction, was not yet settled. His opposition to the admission of the petition, (most probably a PIL) was so strong that we had heard the matter at quite some length at that stage itself.

He was possessed of great quality of very persuasive and sweet advocacy, nonetheless, vehemence in his arguments, if required, was never lacking. His analysis of a provision of law, while interpreting it, was also remarkable. He would read it, re-read it meaningfully, in parts, then all together to make out his point. All this had tempted me to mention to my senior colleague to hear the matter finally, since it was already heard at some length, of course on some later date. And we did so. It is a different matter that we could not finally accept the view canvassed by him before us but his sweet advocacy and fascinating arguments had left a very appealing impression. Later on also I heard him in some other cases and had advantage of charm of his advocacy. He practised adhering to the great traditions of the profession, particularly its ethical aspect and always showed unfailing courtesy to the Court,.

While I was here at Allahabad, as Acting Chief Justice for a short period, in one of the functions which he attended, (since he had by then shifted to Delhi and was practising in the Supreme Court) briefly talked to me about some unhealthy practices which he told were making inroads into the prevailing system and wanted me to be aware of the same. I had though reminded him that I was nowhere near Delhi then, yet he said that one must have all that in mind. He simply thought beyond his own “self”. Such was his sense of commitment and anxiety about the profession and the cause of justice.

A conscientious and affectionate person, a great lawyer with uncommon charm of persuasive advocacy and above all a gentleman to the core, that was late Shri Raja Ram Agrawal.

I would congratulate the organizers of this competition viz., the All India Federation of Tax Practitioners (NZ) and the faculty of Law, University of Allahabad, which has also been his alma mater, in perpetuating memory of the Great Lawyer in a very befitting manner, naming an all India competition after his name. It will be a great source of inspiration to all, specially to the youngsters. He had deep knowledge of law in general but had specialized in Taxation Laws which in itself is a separate and very important branch of Law. Its importance with corporate laws ever increasing with Economic Growth within and outside the country, (current temporary recession apart) such laws are taking front and dominating seat in domestic and inter-state Trade and Commerce having an important on the international relations as well.

It may be any form of the Government, governance needs a treasury full enough to carry out its governmental responsibilities and functions efficiently. Main source of State Revenue is taxation, may be direct or indirect tax, though generally it tastes bitter to the people, specially the direct taxation pinch of which has a direct impact while indirect tax is hidden and quite often we don’t know how much we paid in one transaction. It may be in the name of excise duty or any other levy by some other name, but taxation is an indispensable incidence of an organized society, affairs of which are managed by the Government upon whom lies the responsibility to maintain sovereignty of state, integrity of its boundaries, maintenance of law and order, providing adequate and proper infrastructure to build strong economy, education, health care and overall development of its citizens, so on and so forth, the list is long. Therefore, it becomes a pious obligation of every citizen to pay the lawfully leviable taxes. Kalidas in his work Raghuvansh, describing about King Dalip said – “it was only for the good of his subjects that he collected taxes from them just as the Sun draws moisture from the Earth to give it back a thousand fold”.

It is nothing new. It has been coming down since ancient times. It may be western countries or countries in the East. You find provisions for taxation in Manu Smriti in the ancient times. Manu had cautioned the King against excessive taxation and said that it should be taken “as milk is taken out by milkman from the cow and pollen from the flower by the bee”. It may not destroy the source of the income itself, at the same time no tax or extremely low tax was also not advised. Taxes were to be levied as per well laid principles e.g. agriculturists were supposed to pay in form of their produce in different proportions while artisans and trader in silver and gold etc. K. B. Sarkar said in his book. Public Finance in Ancient India (1978 Ed) ...

“Most of the taxes of ancient India were highly productive. The admixture of direct taxes with indirect taxes secured elasticity in the tax system although more emphasis was laid on direct tax. The tax structure was a broad based one and covered most people within its fold. The taxes were varied and the large variety of taxes reflected the life of a large and composite population.”

Our Finance Minister also in his budget speech referred to Kautilya’s Arthasastra (300 B.C.) that taxation may not be that high that it dries the sources of tax itself. One may find well laid and detailed principles of taxation and its different sources in kautilya’s Arthasastra. Inter-State trade with China and Ceylon and other countries was there, tax on import was known as ‘vartanam’. Concessions had been provided to the sick, minors and the students. It provided well laid and principled system providing for many exigencies as well. An excess profit tax was also levied. It may perhaps be most needed today. It may have been to check unreasonable profiteering and to control prices, for adherence to pricing policy.

Taxation by legislation was introduced in India with Income-tax Act, 1860 as the Britisher’s felt the need to tie over the difficult financial situation in 1857. They had also to expand their Army. While introducing the Bill the British Finance Member made reference to Manu Smriti in its support. And now you have present day legislative scenario on taxation, a number of them dealing with various kind of taxes direct and indirect as well as some treaties and agreements with other countries too regarding tax matters. Presently Tax Legislations draw their authority from Article 265 of the Constitution of India. It is in negative term that ‘no tax shall be levied or collected except by authority of law’. Collection part too is important. In case of overassessment, the tax amount deposited in excess has to be refunded since its retention would be without authority of law. May amount to what has been called ‘unjust enrichment’.

The difficulty arises in taxation matters where State exceeds its power to levy taxes and encroaches upon such field which is beyond the exegibility of taxes or where Centre alone can levy tax but States do so or vice versa. Or where oppressive and unreasonably harsh procedure or provisions are introduced for collection and recovery of taxes or such procedure which violate the principles of natural justice. Or quite come often where over enthusiastic executive authorities try to over stretch the provisions to bring within its net all imaginables articles, or to levy tax on same article at different stages to procure high collection of tax though not legally liable to be levied and recovered under the legal provision.

Then there comes in, the role of the Tax Practitioners. They have to come forward to the rescue of the tax-payers and to save them from illegal or illegitimate demand and collection of taxes. The taxing provisions are really ‘taxing’ and complicated and sometimes drastic to the peril of the tax-payers. They need legal protection against such extractions, which protection can be provided by a strong Tax Bar having competent and efficient members who have to fight out the high handed actions and illegal tax legislation. But at the same time they have to be careful not to connive with evasion of tax liability, since it is so essential to have funds for discharging basic governmental function and for providing adequate and proper infrastructure for progress of the nation.
The Tax Bar safeguards the interest of both, the citizens as well as the State, such is the responsible function of the Tax Bar. Enough legal remedies are provided under the tax statutes and ultimately under the constitution also, to set right the illegalities and to undo a wrong. Such remedies alone must be resorted to for protecting the interest of the tax-payer.

Moot Court competitions are quite in vogue. It is a healthy practice which has developed to provide better exposure to the law students. This competition has focused on Tax Moot Court. Undoubtedly, it will attract the attention of the young “would be” lawyers and may create interest in them to choose this branch of law as field of their practice and work. There is great need of committed talent in the field of taxation laws also.

I thank the All India Tax Practitioners Federation and the University of Allahabad for associating and inviting me to this function. It has been great pleasure indeed to be here. I wish all success for this event and hopefully it will make much progress year to year.

Thanks once again.

[This speech by Justice Brijesh Kumar, Former Judge, Supreme Court of India, was originally published in the September 2009 issue of AIFTP Journal, but was wrongly mentioned as speech by Shri Bharat Ji Agrawal. We are therefore reproducing the speech in this issue also. We deeply regret the inadvertant mix-up in names.]