PERFECTIBLE ADJUDICATION--IF NOT NOW, THEN WHEN?

[Sadanand Bulbule]

1. During the dawn of GST era, described as a new monumental milestone in indirect tax history, everywhere taxpayers were waiting for a messiah and the air was laden with the promises of super change with least complexity of compliance. So it was heralded as a model better than any other model.  Many business tycoons advised that, the dawn of GST era is not a ‘candle light dinner party’ without robust, enlightened, elite & progressive technocratic administration. It is such administration that could bring about smoother platform for transcendental tax transformation on which GST era is embedded. So the business world is aware that, rapid progress of GST system in India is impossible without painful adjustments. Despite the tax payers zealously supported and embraced the new GST era for harvesting the promised alphonso mangoes and tax payers thought they could flourish as it was meant primarily to benefit them.

2. As the years have passed, within a half decade, tax payers are frustrated & standing under hot sun searching for a large tree with low hanging mangoes. On the contrary they are given to taste ‘neem’ fruits. Thus taxpayers are at odds with reality and are justified in conveying torture of adjudication.  This is not unexpected and the elegance of GST era started slowly disappearing. Then I thought about fundamental flaws and blind spots which made the juicy mangoes unreachable in practice. Before the system actually turns into ‘stigmatised shape’, my articulated experience might make mangoes easily reachable that were promised by the makers of GST system and cajole it to unzip the fruits’ baskets.

3. No doubt adjudication is indispensable and it remains so. But what kind of adjudication is the fundamental question? In fact, the word ‘adjudication’ made its first appearance particularly to the State GST Authorities, which is altogether different and distinct from mundane ‘assessment’. Adjudication requires all facts must be accurately examined, debated, investigated without exception and without regard for anyone’s feelings to take right decision based on rationale principles and scientific knowledge. Although this requirement is not defined under the Act, common-sense and self-consciousness demand it. At the same time, it is also to authentically enlighten the ignorant tax payers the way it is designed under Section 73 of the GST Act in the normal situation. However there is also the other adjudication under Section 74 of the Act specifically to deal with the fraudulent activities leading to tax evasion. An independent treatise is being given to elaborate upon the importance of these two categories of adjudication separately under section 73 and 74 of the Act. The term ‘adjudication’ also includes adjudication under Section 107 of the GST Act as well.

4. Here this is an elementary discussion. However, deep connotations are mandated to invoke the specific jurisdiction to adjudicate a particular case based the defined parameters. Adjudication under section 74 is more serious and essential as it involves criminal intent to defraud the public revenue than under the normal adjudication under section 73, which is otherwise. Adjudication under Section 74 should be more rigorous and ruthless provided there is enough empirical evidence to prove the charges of wilful fraudulent tax evasion. The adjudication mechanism contains thorough logical, guiding and controlling explanation of basic elements of collecting the unpaid/evaded taxes legally due to the Government either knowingly or otherwise. Thus the subject of adjudication has much deeper connotations but for fear of being too lengthy, they are dealt only briefly here.

5. Nowadays, the concept of adjudication has become much controversial due to difference of immature opinion and clash of principles among the authorities on the same subject. And together with this, being merely mechanical exercise to create tax bondage, the principles of real adjudication suffer from one or the other fallacies, compared to the facts manifest. According to me there are two root causes: This is basically due to external pressure of Government to create more and the most revenue, without bothering about its lawfulness. Secondly it is also due to super-ignorance of many authorities of what they are supposed to do and what exactly they are doing. Many authorities are unaware of the very base for the need for adjudication. It has become a routine work like any other system in non-quasi administration.

6. Until one gains deep awareness about the limits of adjudication, the entire object of law makers devolves. Therefore the authority should have a clear-cut understanding of the basic principles of adjudication and then attempt to gain skill to recover the unpaid/evaded tax through the prescribed process. This is the practical and experiential approach. This ought to be the aim of adjudication & then only the thirst for extra revenue can be quenched peacefully. Unreasonable and unreachable revenue targets fixed by the Government are not the subject of adjudication. This way in the name of adjudication, in place of legality, only pomp and show is prevailing and bias towards believable facts is on the rise.

7. Knowledge about the business modalities cannot be gained from reading the books of account in the closed chambers. It is very important to be practically and properly experienced and aligned.  Alongside poor gain of business knowledge by the authorities is giving birth to litigation in which all fundamental principles of adjudication are clearly flouted. Therefore the real adjudication is practiced through genuine intent after totally dissociating from the unreasonable and unrealistic revenue targets. This play is in the domain of the adjudicating authorities and not in the externally pressurising forces. Therefore lesser the external pressure, the more peaceful and successful adjudication is conceivable.

8. The major danger in the way of justice is the mania of “surrogated” volatile adjudication orders. And this is due to one’s own dark mind, lack of self-mastery/freethinking, lack of agility & flexibility, intellectual incapacity, self-deception, increasing frustration, timidity and poor understanding of basic/essential interpretation of tax laws that can give meaning to adjudication process. Deep and imperfect orders are missing the beauty and grandeur of truthfulness. Such orders are experiencing their own tragic defeat in the courts of law. No one is willing to see the larger picture. In the process, credible tax payers are scapegoated and put in separate quarantined opaque iron cages heavily chained with untenable tax liabilities. This is exactly like emptying rivers, seas of their fish stocks and walking with sun on head in the desert.

9. The administration is not realising the trauma of injustice and its impact. Today many adjudicators have lost authentic freedom to apply their own mind and heart. Everything is intensely imposed from the self-interested so called genius actors behind the silk curtains. Volatile adjudication has become reinforced torture and shattering the already bleeding business. This is only a tip.  There is a lot more to unpack the can of worms, but this is not the right forum to do it.

10.The adjudicating authority is expected to “break the mould” and shape its own decisions by application of true knowledge of taxation. Transparency of facts and law on record is the key to real quasi-judicial system. Otherwise it is waste of precious time and money on unsustainable proceedings. This would not only embarrass the taxpayers but also damage their credibility on record. Nearly 90% of such proceedings are miserably lost in the judicial courts. Despite that attitude is not discontinued. These days knowingly adjudication orders passed wrongly expecting at least 10% of the disputed tax as ‘complacent revenue’. What a contempt of intent of the law makers? To avoid this, the authority must know the facts and the law the way it is legislated. This is possible only when the fluctuations in mind are completely stilled.

11. It is an altogether different matter that an adjudicating authority practicing quasi-judicial law, because of his unbiased concentration, can do any work effectively and efficiently. It is purported to mean, “performing karma [action], yet remaining from the bondage of karma”, like the full bloomed lotus in a pool of filthy water. Therefore to attain that state, one has to remain free from the bondage of unsustainable revenue targets and has to progress towards higher levels of professionalism. True tax collection can be achieved only through homogeneous taxation and not heterogeneous taxation. Facts and law are homogeneous elements. They need to be aligned precisely. Else it will be trap of illegal revenue targets in which tax payer will remain forever entangled.

12.In our ancient scriptures, we find mention of a bird called “ Alal”, that dwells in the remote skies, where gravitational force of earth ceases, and whatever exists above that level is free from any type of attraction force. It dwells in this very gravitation-force-free space. In real sense, similar is the position of quasi-judicial authority to function in gravitation-free-force zone. The moment this realisation dawns, the authority begins to fly upwards, the original destination to render justice irrespective of its path.

13.But with the rise of ego, lack of knowledge, lack of application of knowledge, the downfall has begun and gradually honest tax payers are becoming victims on daily basis. The core cause for such maladministration is unscrupulous and unscientific revenue targets which are impossible to achieve even in dreams. Everyone wants a pound of flesh from the skeleton of tax payer, without realising that it is only a collection of broken bones, much less flesh. Therefore, until the adjudicating authority gains self-awareness like “Alal” bird, tax payer will get entangled in the cage of illegal tax liabilities and continue bleeding.

14. One who maintains the befitting adage “water- lotus relationship” is justifiably called a real adjudicator, who keeps in constant touch with the ideologies of true taxation. Interpretation of law should not be a product of imagination but time-tested eternal truth. Normally this happens in the absence of a judicial atmosphere, lack of thorough, truthful, flawless knowledge and peaceful moments. If this is manifested, revenue is much safer even in the absence of extra efforts.

15.When due revenue is on this side of bank and its search is going on the bank of other side, that too in the darkness of lust for undue revenue. Adjudication is not an entertainment and it is also not a tool to impress the circuit of higher-ups. Rather it is a golden opportunity to mirror the true intent and personality of the authority. The Act has not given any access to the authority to hurt taxpayers under imagination of law and facts.

16. Adjudication is not one’s own private space to play his/her way. Mere application of mind is not enough to generate sustainable revenue but also application of heart is most relevant. Avoid the work if you do not love it and have guts to express it. Half-hearted adjudication is a curse to tax payers. It should not be just a mediocre and process of sleep walking. It should be conscious and constant practice. Inner frozen biased thoughts should be boiled down and the focus must be on justice rather than punishment. Adjudication should not be an addiction for drawing lines in the sand.

17. Many taxpayers do not seem to know what adjudication the authorities are doing and what they are bringing out, often without bothering about the horrified consequences. With all this painful tolerance, yet the taxpayers are positively hopeful of harvesting abundant juicy fruits without hitting at them. Today we live in a vast, homogenous world market with roving capital in which everyone aspires for maximum progress. The business world is more literate, interconnected, prosperous incorporating technological revolution marked by ‘artificial’ intelligence than at any other time in history. Let their broad hope be beautifully blossomed into reality. Then it is triumph of all the stakeholders.

18. In fact there is no ‘Grey Zone’ in the legal and ethical adjudication. If at all it exists, it is due to increasing self-interest, egocentric attitude and lust for artificial tax collection. Justice is greater than revenue and it is not to be easily missed. The simple reason is, adjudication is not focused to locate intrinsic issues but only its peripherals. In a way, adjudication is like tax safari [though not jungle safari], where everyone is curious to watch the special species of that region and not insects. Contrary to this, the on-going adjudication is struggling to watch only insects in the dark forest through telescopes. This is how the so called adjudication has no self-worth.

 HOPE:

19. Adjudicator is to really know what is happening through him/her, whether it is consciously or mechanically packaged form of decision. Adjudication is what the same adjudicator is. Adjudication is a journey, moving from incompleteness to completeness to have right tax with good relationship with tax payers. So what the authorities need to understand is that, adjudication is meant not only for collecting unpaid/evaded taxes but also providing peaceful environment. The dividends of peaceful collection have much more ramifications in terms of quality adjudication where there is no loss of tax. This has the direct potential positive impact on the growth of economy and meets the aspirations of tax payers. I am hopeful that the authorities certainly reap the benefits of qualitative adjudication and understand its progressive approach to take tax payers on the highway of nation’s progress. Then each bud in the GST bouquet becomes a whole new dream and spreads fragrance as beautiful as the full moon in the sky everywhere, all the time.

20. The tree of GST planted by a galaxy of genius thinkers must be refreshed from time to time, but not with the blood of loyal tax payers in the name of revenue. So my only earnest request to all the adjudicating and appellate authorities is not to pass orders under misconception of facts and law. If this is done gracefully, not only the result is very beautiful but also due revenue would overflow on its own quietly. End of the day, it is the adjudicator to give magnificent meaning and justification to what/why he wants to adjudicate by elevating his consciousness, for which he has been appointed. More than anything else, being an adjudicating authority is a great privilege. Explore yourself with your peers and learn from them for designing for better outcomes. If this really happens, then nothing is left to litigate and the glorious vision of the GST era sparkles again.

“Taxpayers are longing for a perfectible adjudication”.

Finally the last mysterious question is:

If not now, then when will happen this? The time is waiting for the exact answer.