Big companies default in Tax payments running into a few thousand crores. Tax officers don’t harass them. On the contrary, with them they behave like a well-mannered pet dog waiting for their master to throw some bones for them. But when it comes to vulnerable individuals and other businesses, they revel in their task. Offices and homes are ransacked; staff and other family members are harassed, all in the name of duty.
On the one side it is true that in a country like India where tax evasion is one of the worst in the world, a strong implementation of the tax rules is imperative to bring things to a reasonable balance. But the line that has to be drawn here is the over-bearing attitude in which the work is done. Traders and small time businesses feel haunted by Excise and Income Tax officials.
Harassed Chemists on the Streets
Couple of months back members of Amritsar Chemist Association protested against the Sales Tax Department’s highhandedness. Large boxes of medicines were confiscated by the dept. The President of the Association said that the department would be held accountable if the medicines get spoilt due to slack storage. He says that the department’s arrogant attitude is evident from the fact that they have not yet issued any notice explaining their confiscation.
Even in the more polite western countries people do evade tax payments, albeit only a very small percentage. Their tax officers do raid their offices and homes. But there is a certain decency and decorum with which the whole procedure is done. As a developing country aspiring to match with the developed nations it only makes sense that the Indian officers also start matching their attitudes and decorum with those of the developed nations.
Making the right Moves
In a big move towards such a change the Delhi High Court struck down the rules empowering audit by CAG and the Service Tax Dept. In their judgment – W.P.(C) 3774/2013 – dated 04 August 2014, the Delhi High Court says: “This Court is thus of the opinion that any attempt to include provision for such a general audit through the back-door, such as through the impugned rule, is ultra-vires the rule making power conferred under Section 94(1). Rule 5A(2) must consequently be struck down”.
There is a call for change from within the organization. The present Chairman of the Central Board of Direct Taxes (CBDT) Mr KV Chowdary has asked his officers to be “friendly and non-adversarial”. He said that though “our immediate challenging tasks include reaching the ‘not so easy’ target for revenue collection”, but it should be done “without undue harassment and high-handedness”. He has also added that his team needs to maintain a balance by dealing “firmly, effectively and quickly” with tax evasions and frauds. According to him this will help improve the “overall image” of the department and make it a “friendly, professional, non-adversarial and competent organization focused on revenue collection”.
In the light of the court order that has ramifications throughout the country and the enlightening advice of the new CBDT Chairman, there is hope at the end of the tunnel for the thousands of unduly harassed individuals and business establishments.
