Retrospective Amendments – High-time for Introspection by India

[CA. Pradip Shah]

Introduction

1.0 In any civilised society, a taxing statute is expected to be prospective i.e. levying the tax on the income / transaction which will take place in future. This is for the reason that, at the time of entering into the transaction, the tax payers (TP) must have knowledge of the taxes which he is expected to pay. It also provides an opportunity to the TP of carrying out cost-benefit analysis of the proposed transaction and to decide whether to enter into such a transaction or not. This is the system prevailing throughout the countries levying taxes since time immemorial. The system of levying taxes prospectively is based on sound principles and does not require any lengthy arguments. This has been the system prevailing in India as well. However, in the last two decades, an unusual feature has started appearing in the annual tax proposals presented before the Parliament. Now-a-days a usual feature of the various proposals for amendment in the taxing statutes viz. Income Tax (IT), Wealth Tax, and Service Tax (ST) etc. is making it effective retrospectively. Gradually, over a period of time, number of such cases is increasing.

1.1 An unusual feature of these amendments have been that they are aimed at side-stepping the courts. What can pain the one most is that this has become a disturbing trend in the past ten years. The problem with these amendments is that many of them overrule court rulings. This is certainly not a health tonic to boost the trust and confidence of the taxpayers in the taxation system.

1.2 It is undisputed and indisputable that the Legislature does have the power to legislate with retrospective effect. However, looking to the frequency and the number of amendments carried out, the question, we the Indians, have to ask is to what extent the law-makers should be permitted to legislate in this fashion and, secondly, how to make them use the power with discretion and in exceptional circumstances.

What is Retrospective Amendments?

2.0 An amendment is said to be retrospective when it is expressed to be effective from a past date i.e. the period during which the proposed amendment will impact transactions having already taken place. Under normal circumstances, the tax proposals are made known in advance and the transactions which are impacted by it takes place subsequently. However, in the case of Retrospective Amendment (RA) transactions have already taken place and the tax proposals are made known subsequent thereto. Putting it in simple words, it means changing the rules of the game after the game having commenced and, now a days, the game being over as well. As we shall see in our analysis, having lost the game, the Government changes the criteria for winning the game, and making itself winner in the process. This may remind all of us of our child days while playing cricket or gilli danda in the street and a bully having lost the game will declare himself as winner.

Justifying the Unjustifiable

3.0 A remarkable feature of the RA has been that all the FM has consented to and proposed one or the other type of RA in almost all the budget proposals. Reasons for the same have been wide and varied. But the common tune emanating from all of these has been the TP, the Hon'ble judges at various High Courts and the Supreme Court have not been able to appreciate the true meaning of the tax proposal. Here is sample case from the Budget proposal 2010-11 expressing their heart-burn in variety of ways.

Explanatory Note for Amendment in S. 9 of the Income Tax act

Income deemed to accrue or arise in India to a non-resident

Section 9 provides for situations where income is deemed to accrue or arise in India. Vide Finance Act, 1976, a source rule was provided in section 9 through insertion of clauses (v), (vi) and (vii) in sub-section (1) for income by way of interest, royalty or fees for technical services respectively. It was provided, inter alia, that in case of payments as mentioned under these clauses, income would be deemed to accrue or arise in India to the non-resident under the circumstances specified therein.

The intention of introducing the source rule was to bring to tax interest, royalty and fees for technical services, by creating a legal fiction in section 9, even in cases where services are provided outside India as long as they are utilized in India. The source rule, therefore, means that the situs of the rendering of services is not relevant. It is the situs of the payer and the situs of the utilization of services which will determine the taxability of such services in India. This was the settled position of law till 2007. However, the Hon'ble Supreme Court, in the case of Ishikawajima-Harima Heavy Industries Ltd., Vs DIT 2008 -TMI - 3467 - SUPREME COURT, held that despite the deeming fiction in section 9, for any such income to be taxable in India, there must be sufficient territorial nexus between such income and the territory of India. It further held that for establishing such territorial nexus, the services have to be rendered in India as well as utilized in India. This interpretation was not in accordance with the legislative intent that the situs of rendering service in India is not relevant as long as the services are utilized in India. Therefore, to remove doubts regarding the source rule, an Explanation was inserted below sub-section (2) of section 9 with retrospective effect from 1st June, 1976 vide Finance Act, 2007. The Explanation sought to clarify that where income is deemed to accrue or arise in India under clauses (v), (vi) and (vii) of sub-section (1) of section 9, such income shall be included in the total income of the non-resident, regardless of whether the non-resident has a residence or place of business or business connection in India.

However, the Karnataka High Court, in a recent judgement in the case of Jindal Thermal Power Company Ltd. vs DCIT (TDS), has held that the Explanation, in its present form, does not do away with the requirement of rendering of services in India for any income to be deemed to accrue or arise to a non-resident under section 9. It has been held that on a plain reading of the Explanation, the criteria of rendering services in India and the utilization of the service in India laid down by the Supreme Court in its judgement in the case of Ishikawajima-Harima Heavy Industries Ltd.(supra) remains untouched and unaffected by the Explanation.

In order to remove any doubt about the legislative intent of the aforesaid source rule, it is proposed to substitute the existing Explanation with a new Explanation to specifically state that the income of a non-resident shall be deemed to accrue or arise in India under clause (v) or clause (vi) or clause (vii) of sub-section (1) of section 9 and shall be included in his total income, whether or not, (a) the non-resident has a residence or place of business or business connection in India; or (b) the non-resident has rendered services in India.

This amendment is proposed to take effect retrospectively from 1st June, 1976 and will, accordingly, apply in relation to the assessment year 1977-78 and subsequent years.

(emphasis supplied)

3.1 There are large numbers of such cases expressing the feeling that if you don't subscribe to the views of the policymakers, they would not have any inhibition in changing the rules of the game and declaring themselves as winner.

Fathoming the Justification

4.0 What is common in all of the above items? The Government wanted a tax proposal with certain objectives and target of collection of revenue which does not fructify as expected due to different interpretation placed by the judiciary. As a result, these tax proposals having been vetted by the judiciary as well, looses its effectiveness. Therefore, to achieve the desired results the only course left open is to carry out the amendments by filling the blanks or changing certain phraseology of the tax proposals. And as can be seen in the case of amendment in Section 9 of the Income tax Act, rather than relying on few words or phrases, which get interpreted in an unexpected way, making known the intention for legislating itself in no uncertain terms, not once but twice.

4.1 However, no one can have any grouse at it as long as it is made effective prospectively i.e. applicable to the transactions taking place in future as it gives the time to the TP to adjust to the changed scenario. The problem becomes serious one when these changes are made effective from back date i.e. the date from the original tax proposals was brought to the statute. The TP would not have any problem if such amendments are made effective within short time of say one or two years of the original tax proposals as the quantum of tax involved and legal compliances will be comparatively low. However, when it dates back to more than 30 years it assumes significance. The issue assumes greater significance when the tax authorities approach the Parliament every year with few such proposals. Since the time elapsed is considerable, amount of tax involved will also be substantially high. This is not the end of the story, these amendments will make the TP defaulters in payment of tax attracting levy of interest for the period involved. In short, the TP will be forced to pay not only the tax but interest which will be more than the tax involved.

4.2 An issue that may baffle any sane person is, is it the problem with the TP or the judiciary or the draftsman and the policymakers? Or is it the inadequacies of the English language? As far as TP and judiciaries are concerned it can be said that, in such cases, large number of TP and judiciaries from different parts of the country reads and interpret over a long period of time. If such a large number of persons and the judiciary as well have common opinion about few words / phrases applied in the tax proposals over a long period of time, certainly one cannot find fault with them. As for English, it is true that it is not our mother tongue and, therefore, we, the Indians, cannot be masters like British. However, it has been part of our life for the last more than four hundred years. And more particularly, the judicial system in

India has been transacting all the legal issues in English ever since it is established. Therefore, the statement that the large number of senior judges of the High Court (HC) and the Supreme Court (SC), and that too over a long period of time, has been unable to read the intention of the tax proposal as it was intended to be makes one searching for the real cause somewhere else.

English Language - a culprit?

4.3 According to the policy makers at the Ministry of Finance, language is the most imperfect medium of expressing one's views. To some extent one may agree with this belief. English language is still too young compare to say, Sanskrit. Although the British would not like to acknowledge, the message which one gets from the above is that English language has yet to develop itself to become a perfect tool, capable of conveying the correct meaning. Another message which emanates from these is that the TP, tax advisors and the judiciary of India have yet to learn a lot about the English language, and more particularly, the art of reading the tax proposals the way in which the policy-maker wanted it to be. Lastly, the more important message is that the TP and the judiciary system are not on the same wavelength with the tax authorities, as the former being unable to understand the sound emanating from the latter.

4.4 One cannot have any argument about the difficulty one faces while drafting a taxing statute covering millions of transactions of wide and varied nature. It is certainly an uphill task. It becomes more difficult when the draftsman is assisted by only a few bureaucrats who provide inputs at the time of drafting the tax proposals and the process takes place in complete secrecy. For obvious reasons, it cannot cover all the contingencies and there are bound to be some missing link / cases which remain outside the proposed scope of the tax proposals. In the first stage, the process of drafting the tax proposals is carried out by say five or ten persons while in the second stage, it gets interpreted in real life by thousands of TP and tax advisors. In the third stage, it gets interpreted by judiciary system throughout the country. We the Indians, being capable of fathoming the most mysterious aspects of the life like, brahma, atma, parmatma etc., finds it very easy to delve into deeper aspect and assign some meaning or creating a situation wherein the tax proposals do not impact the way in which it was expected by few bureaucrats in the Ministry of Finance. Such eventualities are quite common every where and there is nothing unusual about it. No human being is perfect and any body is bound to commit mistake. Under normal circumstances, for a human being, the mature approach is to accept the mistake committed, communicate, rectify it and make applicable thence forth. However, what shocks one more is the sharp reaction of the authorities to it and rectifying the mistake causing severe hardships to the TP and in the process, damaging the foundation on which it is built.

Timing of RA

5.0 A layman may be wondering as to why is it that such a proposal is being placed before the Parliament after five, seven or ten years? Is it the case that the authorities, who are supposed to keep a watch on the happenings in the society taking place, are unaware of it? Is there any system under which the authorities get the signals pointing to the development taking place? Let us see the chain of events chronologically i.e. from conceiving of the tax proposals, placing it before the citizens of the country, its evaluation by the society and the judiciary etc.

Chain of Events Leading to RA

6.0 An unusual feature of this process of rectification of drafting mistakes is that it is being carried out after considerable long period of time. Before going into deeper let us look at the whole process of step-by-step and see how much time and opportunity is available to the authorities for identification and rectification.

Step

	Action	Time elapsed since step 1	Remarks
1	Drafting of tax proposal	0	The process of drafting place in secrecy. Barring few persons in the Ministry of finance no one is aware of the tax proposal. Hence, the question of reaction by the TP to it does not arise.
2	Placing the tax proposal before the Parliament	Uncertain as the drafting process takes place in secrecy	The TP comes to know about the tax proposals for the first time. In the euphoria of assigning the ratings to the Finance Minister, the experts don't read the tax proposals and make an attempt to understand. There is no question of any serious discussion at this point of time and the question of mature reaction does not arise at all.
3	Analysis of the tax proposal in print and electronic media	2 to 3 days of placing the proposal before the Parliament	A serious discussion takes place in the print media after four or five days of placing the proposal before the Parliament. One gets an idea of shape of things to come. In fact, as it gets published in newspapers and various tax magazines, in terms of point of time, the Ministry of Finance get an opportunity of getting feed-back from the society.
4	Presentation by the Chambers and professional bodies before the Finance Minister on implications	One month after placing the proposal before the Parliament	Various professional bodies like Bombay Chartered Accountants Society and The Chamber of tax Consultants etc. make detailed presentation to the Ministry of Finance and the Central Board of Direct Taxes on implications of the proposed tax proposals. At this stage, the authorities get an opportunity of having matured reactions on the tax proposals. Generally, professional bodies and the Chambers of Commerce consult their members and tax advisors for their considered opinion on the tax proposals. Seasoned and sound reactions come within a month of presentation of the proposals before the Parliament.
5	Discussion of the tax proposal at both the Houses of Parliament	One month after placing the proposal before the Parliament	Members of Parliament express their views on the floor of both the Houses. This is the third stage where the authorities get an opportunity of having the feed-back.
6	Filing of the tax returns by the TP	18 months after the approval by the Parliament	Once the Finance Bill is passed and the tax proposals become part of the taxing statute, lull prevails. Based on their understanding of tax proposals, the TP complies with the new requirements. Return of Income is filed after one year of the tax proposals is brought to the statute book. During this period, the tax authorities hardly get any idea about the implications of the tax proposals.
7	Assessment by the tax authorities	Three years after the approval by the Parliament	The tax authorities come to know about the execution of tax proposals by the TP when scrutiny of the Return of Income (RoI) filed are taken-up. However, the information so gathered remains at the level of the Assessing officer and, in some of the cases, with the Commissioner.
8	Appeal before the Commissioner of Appeals	Four years after the approval by the Parliament	The battle royal starts with the filing of appeal with the Commissioner (Appeals). Since the orders passed by the Commissioner (Appeals) are being analysed at the office of the Chief Commissioner, the authorities get an opportunity of assessing the treatment given to the tax proposals by the TP, its reasoning and implications.
9	Appeal before the Income Tax Appellate Tribunal (ITAT)	Seven to eight years after the approval by the Parliament	The matter comes-up with the Income tax Appellate Tribunal where detailed arguments take place by the TP and the authorities. Legal issues involved are examined by the Bench. Since the next step for the Revenue is to approach the High Court, detailed analysis of the Tribunal's orders take place at the office of the Chief Commissioner. Based on the legal issues involved and the merits, the Commissioner decides to approach the High Court. Interpretation of the tax proposals by the Members of ITAT is in the public domain as its orders are published in various tax magazines.
10	Appeal before the High Court	More than 10 years after the approval by the Parliament	The HC examines the tax proposals from various angles. Views expressed by the judiciary in their judgement are in public domain.
11	Appeal before the Supreme Court	More than 15 years after the approval by the Parliament	This is the final stage of assessing the legality of tax proposals. Interpretation by the SC is final, as neither the TP nor the Revenue have any other option of agitating against it.

Timing of RA

7.0 A glance at various RA will reveal that the same are carried out after five or seven years and, in many cases, after more than ten years from the date on which they are made effective. A question that arises is assuming that the process is being carried out to rectify some mistake committed, why does it take such along time? Is there no system under which the Government does not get signals of the draftsman having committed some mistake? Why is it that the Government is waiting for the decision of the SC for carrying out amendment with retrospective effect? Why is it not appreciated that during the time period elapsing, the country is moving ahead and the Indian economy is carrying out millions of transactions on daily basis which gets affected by such a move?

7.1 A can be seen from step no. 4 of the above table, lacunas and deficiencies get surfaced within one month of the proposal being placed before the Parliament. Look at the step no. 7 where the AO get an opportunity of assessing the income and come to know about the treatment by the TP of the tax proposals. This stage is also not much far away and is of three year time span only.

Lot many hassles can be avoided if decision is taken at an early stage. However, for some unknown reasons, the action takes place only when the SC interprets the tax proposals in a totally different way than as visualised by the policy makers.

Legality of RA

8.0 Various tax proposals have been legislated with retrospective effect so far. Many of them have been challenged in various HC and the SC. A general view that emerges is that as far as taxing statutes are concerned, the Parliament is the supreme authority and it has powers to make any taxing statutes with retrospective effect. So from the legal perspective, such legislations have the stamp of approval of the judiciary as well.

Financial Implications of RA

9.0 Since the tax proposals are related to levy of tax, it is bound to have financial implications for both i.e. the Government and the TP. At the time of drafting the tax proposals the policy makers, based on the proposals, estimates certain revenue. However, in view of different interpretation by the judiciary either it gets nullified or diluted sizably. This is bound to affect the process of collection of revenue from the TP who have approached the Court of Law for the period during which the judgement of the Court is applicable. However, if we look into deeper, something else will emerge.

9.1 If the objective of RA is to recover tax from all the assessees for whom the tax proposal was proposed, one can understand the logic of putting so mush efforts in pushing the amendments. However, in reality exactly opposite happens. Let us take a hypothetical example from which it will be clear that RA affects only selected class of TP who have dared to challenge the tax proposals before the court of law and tax collections from them for the past period for the proposal forms a small part.

9.2 Let us take an example that a tax proposal is likely to impact, say, 1,00,000 TP and tax collection from the same is expected at, say, Rs. 1,000 cr. Out of 1,00,000 assessees, say, 20.00% of it interprets it as the Government wanted it to be while remaining 80.00% does not subscribe to the views of the Government as they are advised by their legal advisors that the tax proposals are not applicable to their case. Thus, 80,000 TP, say, involving tax collection of Rs. 800 cr. will not pay the tax or shall pay at reduced rate defeating the objectives laid down by the Government. Due to the existing system of selecting the cases for scrutiny of assessing the income, say, 2.00% of 80,000 i.e. 1,600 TP's cases are selected for scrutiny by the AO. Assuming that all the AO scrutinizing the cases are in a position to detect applicability of the tax proposals in each case and interprets it in the manner and the way in which the draftsman and the policymakers in the Ministry of Finance wanted it to be. All these cases will become part of the litigation process moving from one step of the ladder to the other. These cases will be under the monitoring system of the Revenue Department. Since the tax authorities have the data of such cases on hand, RA will be made applicable to such 1,600 cases only. This is for the reason that the tax authority does not have the means of identifying remaining 78,400 cases wherein the tax proposals are equally applicable. The point to be noted here is that due to inefficient system, majority of the TP does not get affected by RA. This is not to say that 1,600 TP should be permitted to let go from the tax proposals. If the law is supposed to apply all the persons equally, why is this selective approach? We all know that the administration does not have resources enough to implement tax proposals made effective retrospectively to all the TP. If that is the case, why so much fuss about making number of tax proposals retrospective every year? If the tax department is not in a position to collect the tax as projected initially, what justification there can be for making it retrospective?

9.3 Let there be not any misunderstanding on this count that TP be let go free. If the said tax proposals have to be continued on the statute, let it be there but make it effective prospectively. It should not be lost sight of the fact that these TP have been carrying out the transaction transparently, disclosing it to the tax authorities. Only point of difference is regarding interpretation of few words or the phrases of the tax proposals which have passed through the tests by various senior judges of the HC and SC. Any sane person will find it difficult to appreciate the logic behind such an approach. In fact, as can be seen from views expressed in various media, large number of TP and legal experts do not see any logic or sound reasoning for indulging into such a practice. And a general view that emerges is that the idea of making RA is not maximising the tax collection. In short, the whole exercise of RA does not lead to collection of higher revenue for the Government. However, the whole process causes lots of damage to one of the most important pillar of Indian democratic structure.

9.4 As far as the TP are concerned, based on the legal advice, interpretation by Tax Tribunals and the Courts, he structures the transaction accordingly. Any tax liability with retrospective effect affects substantially the TP as it is not visualised at the point of entering into the transaction or earning the income. The longer the time period involved in the process of carrying out rectification, the quantum of tax amount increases. What is more worrisome in such cases is the element of interest involved which the TP is required to pay. Since the TP is considered as defaulter for payment of tax with retrospective effect, the provisions relating to payment of interest gets invoked. Generally it will be @ 12.00% p.a. If the tax proposal gets amended after eight years or more, liability in respect of interest itself will be more than the tax on which it has been computed.

Is it Discriminatory?

10.0 Tax proposals are supposed to be applicable to all the citizens of the country irrespective of their cast, creed or colour. However, in the case of RA, a weird situation emerges. As we have seen in a hypothetical example, a small fraction of the TP gets taxed. Most of them are those who have either challenged the tax proposals. As far as the tax department records are concerned, since their matters are "alive", amended tax proposals with retrospective effect will be made applicable in such cases without fail. This is for the reason that such TP are within the knowledge of the tax administration. However, a question arises, what about the other cases wherein the amended tax provisions are equally applicable but due to lack of information, no action can be taken by the tax department. We all know the quality of the documentation and records maintained by the tax department. How will the tax department be able to identify cases wherein amended provisions are applicable right from seven or ten years back, reopen the assessment, determine the tax liability and recover it?

10.1 The process of RA has been going on for the last many years. It will be interesting to know in how many cases (other than the cases of the TP who have challenged the tax proposals) the tax department has applied the amended provisions and collected additional revenue? Although no data is available for such cases and the amount involved, there is no doubt that it must be negligible. This is for the simple reason that administratively, it is not possible and feasible to do so. Putting it in a different way, these RA are applicable to those TP who have gone to the court of law for seeking the justice. Others who have kept silence or who have not been identified by the tax department will not be required to pay the tax as per the amended provisions. Is this not discrimination? If not so, what it is? Or is it the price a TP has to pay for seeking the justice from the judiciary?

Ethical Issues of RA

11.0 Although ethics is not supposed to play any role in taxing statute, however, it has some relevance when it comes to implementation and administration. The tax authority conceives certain proposals and makes it known to the TP. As part of the system, the tax proposal is submitted to test with the judiciary. The judiciary interprets in such a way that it is found to be not in consonance with the thinking of the tax administration. Normal course would have been to make it known and applicable from the said point onwards. However, to make it applicable from back-dated and asking the TP to pay the tax, is not stretching the matter too far? Is it not akin to making the one as winner by changing the rule of the game when the game itself is over? Is it ethical?

RA and Issues of Credibility

12.0 This also raises certain issues about credibility of the tax administration. If the tax authority is not willing to appreciate the views of various senior judges of the HC and the SC and respect them, where does the citizen of the country go? What is the guarantee that the interpretation placed by the tax authority today will not be changed again in future? [For the most recent instance in this respect see Circular No. 7/2009 [F. No. 500/135/2007-FTD-I], dated 22-10-2009 of the CBDT withdrawing circulars no. 163, dated 29th May, 1975 and No. 786, dated 7th February, 2000]. Will this not raise serious issue of credibility for the Government?  

RA and Relevance of Judiciary

13.0 Keeping aside the tax implications, the way in which the whole process is being carried out, raises some serious issues for all the citizens of this country. The judiciary has been visualised as one of the most important pillars for the democratic system of India. And for that matter, the judiciary system has been recognised as one of the most important part of any civilized society. Any move by any person or the authority diluting the authority of the judiciary system, is bound to affect very foundation of the democratic system. If the judiciary is playing the role as it is supposed to, is it not necessary to respect its verdict? If it is felt in a section of the bureaucracy that the knowledge of English language of the judiciary is poor, it is high time to let it be known to the people of India and other countries of the world that the meaning assigned to tax proposals by the bureaucrats will be final and, for the latest meaning assigned to any provisions of a taxing statute, everyone should carefully read daily newspaper for latest press note released by the Press Information Bureau of the Government of India. If number of tax proposals every year is found to be interpreted not in tandem with the thinking style of the tax administration, will it not be advisable to change the system by taking out tax references from the purview of the Court and assign it to some officer?

Shape of Things to come

14.0 It is undisputed fact that over a period of last sixty years share of undisclosed income and tax evasion has been increasing consistently. All of us know that today percentage of unaccounted transactions in the economy is almost 50.00%. One of the reasons for disregard for the tax system is unjust treatment meted out by the policy makers and the tax administrators. We have come to a stage where the assessee no longer finds it worthwhile to go into litigation for the simple reason that the lawmakers have shown repeatedly that they will tolerate no dissent from the assessee. And as we have been observing, they can go to ridiculous lengths to have their last word. A message is being conveyed on 28th February of every year that though victory will be of the TP in a court of law, it will not be so for long - at the earliest available opportunity, a retrospective amendment would rob him of his rightful dues. Therefore, TP takes the prudent way out either by buying the peace or not reporting the transaction at all. We all know either of this is not good for the health of the society. If the trend continues for a longer time, we shall find ourselves into a jungle raj where whims of the ruler only prevail.

14.1 One of the off-shoot of the testing of the power to carry out RA has been that the tax authorities are becoming more and more lethargic. It is not considered by them to appreciate the problems posed to the TP by such proposals. Generally, no action is taken till the SC delivers its judgement which normally takes more than 10 years. The bureaucracy being fully aware of its power to get the required changes carried out back-dated, does not consider it of their concern to take immediate action. It is not appreciated that the comfort found in the form of RA, leads to corrosion of the whole system slowly. Their act turns away more and more honest TP to unethical means.

Extension of RA to Indirect Taxes

15.0 So far, the endemic of RA was restricted to Direct Taxes only. However, a new trend has begun with effect from the Budget 2010-11. The disease of RA has spread to Indirect tax as well. The Budget 2010-11 contains two important amendments relating to Service Tax (ST). One of the amendments proposes the clarification regarding scope of commercial coaching or training centre services which has been made effective since 1-7-2003. Another amendment is with respect to levying tax on rental services made effective from 1-6-2007. If one examines the background leading to RA in this respect, it will be clear that it is the result of lax drafting, lethargy in reacting to development taking place and taking immediate action. The issue of defining the word "charity" and levy of ST on certain activities was discussed at various forums extensively. The Government machinery was well aware of it. The TP having faith in the judiciary system relied on the orders and the judgement of the various Tribunals etc. However, all the legal advice and judicial orders have been brought to naught by few words in the Finance Bill. It is not appreciated that