Finance Minister Arun Jaitley consistently referred to the “tax terrorism” regime pursued by UPA-2. Days after his first Budget in July 2014, he told Parliament that his government wished to “revive investor sentiment, which has been disturbed” to spur growth. He added that there was a need to end the previous regime’s environment of “what some call tax terrorism”.
To pursue these objectives and due to global pressures from countries such as the US, the government recently decided that it would not appeal against any cases in which foreign multinationals (MNCs) had got favourable orders from the lower courts in tax disputes. Thus, after this January decision, NDA-2 gave up its democratic and constitutional right to approach a higher court, including the Supreme Court, to pursue these cases to their logical ends.
The beneficiaries are, obviously, big business houses, both domestic and foreign. Among them is Shell, the Anglo-Dutch oil major, which won the Rs 18,000 crore case — slapped against it by the income tax department — in a high court. The Bombay High Court decided that the income tax authorities did not have any arguments against Vodafone, which was slapped with a Rs 3,200 crore claim. Other MNCs that may get a reprieve include Nokia, IBM and Cairn India.
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The decision was taken weeks before the government claimed it would go after powerful corporate lobbyists and middlemen, who access secret and confidential documents from critical economic ministries (oil and gas, coal and power) to influence policies, manipulate stock markets and earn windfall profits. Not appealing against lower court orders seems a contradiction as it is akin to reverse lobbying, where the government publicly helps the big companies.
Clearly, the finance ministry, with its objective to woo private investments, is batting for the rich class, even as it contends that it has to reduce the subsidies (food, fuel and fertiliser) for the poor. How can any regime justify it? How can any government say it will let go of its right to contest a lower-court order in a higher one?
Four questions are involved here. First, doesn’t every individual and institution, including the government, have an inherent right in a democracy to approach the highest court, especially when the issue concerns public interest? Second, isn’t it the purpose of ‘a court of last resort’, or the apex court, to take a final call on the differing views given by the lower courts?
Third, can any outsider — except the courts and specifically the apex court — determine the legal position in case of any disagreement? Finally, aren’t there larger issues, which generally emerge from such cases, which can only be dealt with by the Supreme Court to set future precedents?
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The ideas behind the importance of judicial review — from the lowest court to the highest one — are integral to past legal debates. One, as a former US judge said: “The irreplaceable value of judicial review lies in the protection which it has accorded to constitutional rights that has maintained public esteem for the judiciary and has permitted peaceful existence of counter majoritarian implications of judicial review and the democratic principles on which our federal system rests.”
Two, as an American writer said that a court “has not been infallible. It has made mistakes. It has run counter to the deliberate and better judgment of the community.” In India, we have witnessed cases, where the lower courts were misguided, even manipulated, by witnesses and powerful people (money and politics). Who can possibly forget the initial grave injustices in the Jessica Lall or the BMW murder cases! In such a scenario, how can a government believe in the orders of the lower courts and give up its right to earn huge revenues that can be spent on public welfare?