Fi­nance Bill Con­tro­versy: Is it a ma­jor con­cern?

Libertatem Magazine - - Contents - by Sri Vaisakhi Mud­dana

Govern­ment of In­dia has taken steps in bring­ing about changes in the na­tion. Pre­sent­ing of the Fi­nance bill is one such mun­dane act. Ev­ery time such a bill is placed be­fore the Par­lia­ment, two to three days of de­bate takes place and sub­se­quently peo­ple get over the is­sue al­to­gether. When the fi­nance bill was in­tro­duced this year, it stirred up a con­tro­versy re­gard­ing the amend­ments in­cluded therein. The said bill was passed in the lower house with ma­jor­ity. The amend­ments which have been brought by the pass­ing of the fi­nance bill change about 40 laws and will have a very sig­nif­i­cant ef­fect on the na­tion. [The Con­tro­versy over the Fi­nance Bill and its many Amend­ments by Bloomberg L.P]. The Mem­bers of Par­lia­ment have ob­jected to the amend­ments in the bill on the ground that some of the amend­ments don’t come within the purview of tax­a­tion, which is what a fi­nance bill ide­ally has to con­tain. But the ob­jec­tions raised were not taken into ac­count by the lower house and the lower house has passed the orig­i­nal bill with­out mak­ing any mod­i­fi­ca­tions in the bill.

The ob­jec­tion of the Mem­bers of Par­lia­ment of RSP was that the list of amend­ments was not placed be­fore them. When the bill was pre­sented on Fe­bru­ary 1st,2017, only 8 to 10 acts were al­legedly pro­posed to be amended; while the Fi­nance Min­is­ter Arun Jait­ley has con­tended that all the 40 amend­ments were all in­ci­den­tal to the acts.[ The Fi­nance Bill,2017: the far-reach­ing con­se­quences of a Lok Sabha ma­jor­ity by Sruthi Rad­hakr­ish­nan] The ma­jor amend­ments which have led to the con­tro­versy are men­tioned be­low:

Aad­har Card has been made manda­tory for PAN and In­come Tax: All the Res­i­dents have to pro­vide the Aad­har num­ber or Aad­har en­rol­ment num­ber. Fail­ure to pro­vide the same would in­val­i­date the Per­ma­nent Ac­count Num­ber (PAN). This has be­come an is­sue as there is al­ready a pend­ing case be­fore the Supreme Court of In­dia on the is­sue of mak­ing Aad­har Card manda­tory for all. [Here’s why there is so much hul­la­baloo over Arun Jait­ley’s Fi­nance Bill 2017 by Eco­nomic]

Tri­bunals, Ap­pel­late Tri­bunals and other au­thor­i­ties: ac­cord­ing to the amend­ment pro­posed, cer­tain tri­bunals’ func­tions are be­ing taken over by other ex­ist­ing tri­bunals.

The change brought about by the govern­ment ham­pers the very own Di­rec­tive Prin­ci­ples of State poli­cies wherein the in­de­pen­dence of the ju­di­ciary has been laid down as one of the main prin­ci­ples of democ­racy. For in­stance, the Com­pe­ti­tion Com­mis­sion Tri­bunal has been taken over by Na­tional Com­pany Law Ap­pel­late Tri­bunal. This raises a ma­jor con­cern as the au­thor­i­ties may not have the re­quired ex­per­tise in deal­ing with the cases of Anti Com­pe­ti­tion prac­tice as they deal with mat­ters re­lat­ing to com­pany dis­putes and gover­nance. Apart from this, it also in­creases the case bur­den on the Na­tional Com­pany Law Ap­pel­late Tri­bunal where many cases are pend­ing. The Na­tional High­way Tri­bunal has been taken over by the Air­port Ap­pel­late Tri­bunal which does not have any ex­per­tise in deal­ing with mat­ters re­lated to the High­ways. Like­wise, many other tri­bunals have been taken over by other ex­ist­ing tri­bunals which do not have any ex­per­tise in the said field. Ac­cord­ing to an amend­ment, the Cen­tral govern­ment may make rules with re­gard to the (i) qual­i­fi­ca­tions (ii) ap­point­ments (iii) salaries and al­lowances (iv) res­ig­na­tion (v) re­movals (vi) term of of­fice (vii) other con­di­tions of ser­vice for the mem­bers. The term of of­fice has been lim­ited to 5 years and they are el­i­gi­ble for reap­point­ment. The re­tire­ment age has been ex­tended to 70 years for chair­per­sons, chair­man or pres­i­dent. In case of vice pres­i­dent, vice chair­per­sons, vice chair­man the re­tire­ment age is 67 years. [www.prsin­ bill­track/the-fi­nance-bill-2017-4681] The above rules shall be ap­pli­ca­ble to chair­per­sons, tri­bunals, ap­pel­late tri­bunals, and any other spec­i­fied tri­bunals. Now the ques­tion arises here as to whether or not it will ham­per the in­de­pen­dence of the ju­di­ciary. In Madras Bar As­so­ci­a­tion v. Union of In­dia [Trans­fer case No 150 of 2006, Supreme court of In­dia, Septem­ber 25th, 2014], the Supreme Court held that the func­tions of the Tri­bunals are sim­i­lar to that of the pow­ers and func­tions of High Courts. There­fore, mat­ters in re­la­tion to the ap­point­ment, reap­point­ment should be free from the in­flu­ence of the ex­ec­u­tive. The in­volve­ment of the ex­ec­u­tive in the ju­di­ciary will ham­per the in­de­pen­dent de­ci­sion given by the judges, and in cases where the govern­ment is in­volved, they will not be able to de­liver a fair judg­ment and there are chances that the judges’ opin­ion may be prej­u­diced. There are also chances that the ap­point­ment and reap­point­ment of judges may not take place in a fair pat­tern.

Po­lit­i­cal Con­tri­bu­tion by the Com­pa­nies: Ac­cord­ing to sec­tion 182(3) of the Com­pa­nies Act 2013, a com­pany can con­trib­ute only upto 7.5% of the av­er­age of its net prof­its in the last three fi­nan­cial years. The Com­pa­nies have to dis­close the amount given to the par­ties in their books of ac­counts. This en­sures trans­parency in fund­ing the po­lit­i­cal par­ties.

As per the amend­ment in the Fi­nance bill 2017, the limit of 7.5% has been re­moved; the com­pa­nies need not dis­close the amount given to the po­lit­i­cal par­ties. Though the amend­ment has pro­vided that con­tri­bu­tion can be made only through cheque, a bank draft, or an elec­tronic means, the in­for­ma­tion is hid­den from the pub­lic as only the banks will know about the trans­ac­tion which will take place. [What is the con­tro­versy about Fi­nance Bill 2017? Why every­one is neg­a­tive about it? By Shashank Ra­jak] Ir­re­spec­tive of this, the com­pa­nies now have a free will to make as much con­tri­bu­tion as pos­si­ble to the po­lit­i­cal par­ties and they can also make sure that the laws which are en­acted are for the ben­e­fit of the com­pany. If the com­pa­nies de­cide to pull out the con­tri­bu­tion given by them, then a ma­jor part of the amount will be gone. The com­pa­nies and the po­lit­i­cal par­ties’ con­tri­bu­tions are for mu­tual ben­e­fit. The amend­ments in the Fi­nance bill have pretty much taken away the con­cept of trans­parency. The Fi­nance Bill pro­poses to in­tro­duce elec­toral bonds through which the com­pa­nies can con­trib­ute anony­mously which fur­ther al­low the com­pa­nies to hide.

Amend­ment in In­come Tax Act: The amend­ment in the Fi­nance Bill 2017 pro­poses that the in­come tax of­fi­cials are al­lowed to do search and seizure with­out dis­clos­ing the rea­sons for the same. Apart from this the amend­ment al­lows the in­come tax of­fi­cers to seize any prop­erty of the per­son which is not a part of the raid; While prior to this amend­ment the of­fi­cers could seize the prop­erty which had been in­volved in the raid only with suf­fi­cient rea­sons be­ing pro­vided in or­der to con­duct search and seizure. [Why Arun Jait­ley must amend re­gres­sive Fi­nance Act, 2017 by Min­haz Mer­chant] This will al­low the in­come tax of­fi­cials to have the ul­ti­mate power of de­ci­sion which may in turn be mis­used by them. Fur­ther­more, there would nei­ther be any checks on them later since the amend­ment has al­lowed the of­fi­cials to con­duct search and seizure with­out dis­clos­ing rea­sons be­fore any court or tri­bunal. The above is­sues have to be dis­cussed and dealt with by both the houses in de­tail and pro­pose a stand­ing com­mit­tee to de­cide the fea­si­bil­ity of pass­ing such laws. In­tro­duc­tion of these amend­ments in the Fi­nance bill has si­lenced the role of Ra­jya Sabha in these mat­ters as the lower house can ac­cept or re­ject any amend­ments given by them and even with­out the ap­proval of the ma­jor­ity in Ra­jya Sabha, a Fi­nance Bill can be passed if a ma­jor­ity has been ob­tained in the lower house. The na­tion in to­day’s world is mov­ing for­ward and that is pos­si­ble only if there is a chance of free and fair jus­tice with­out any prej­u­diced opin­ion of the au­thor­i­ties. But the ex­ec­u­tive in­volve­ment in the ju­di­cial de­ci­sions as to the ap­point­ment and reap­point­ment af­fects the prin­ci­ples of nat­u­ral jus­tice, thereby ham­per­ing jus­tice. Giv­ing ul­ti­mate pow­ers to in­come tax au­thor­i­ties may be a good road ahead in the fu­ture but ac­cord­ing to the say­ing “ab­so­lute power cor­rupts ab­so­lutely”, there would be chances of of­fi­cials be­ing un­fair and prej­u­diced in their de­ci­sion mak­ing.

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