Arbitrary or excessive tax results in social injustice by a government: CJI Bobde

Chief Justice of India SA Bobde on Friday sounded a note of caution against imposing too much tax, saying “arbitrary and excessive tax results in social injustice by the government”.
Justice Bobde had a word of advice for tax officials. “The method of taxation is you draw taxes like a honeybee draws nectar without harming the comb,” he said on the occasion of Foundation Day of the Income Tax Appellate Tribunal (ITAT).

The CJI went on to quote from the Manusmriti to drive home his point that a government should strike the right balance when it comes to addressing different aspects of taxation. “(The) King should not cut his own roots by imposing no tax at all, nor should he cut the roots of his subjects by imposing excessive taxation.”

In fact, Chief Justice Bobde said excessive taxation was as harmful as not paying taxes. “While tax evasion is a social injustice to fellow citizens, arbitrary and excessive tax also results in social injustice by the government,” he said.

Further, he underlined the important role of the tax judiciary, saying quick delivery of justice is a big incentive to pay taxes.

“Just and speedy dispute resolution is perceived as a tax incentive by the tax payee, and to the tax collector. An efficient tax judiciary ensures that the demand arising from legit assessments are not strangled in delays and litigation,” he said.

‘AI can Play Important Role’
The CJI struck a lighter note when he went on to quote famous jurist Nani Palkhivala on the complexity of the tax structure. “Time has come for Parliament to enact certain legislation like prevention of cruelty to taxpayers Act, which should override all fiscal deficit.” Justice Bobde encouraged the ITAT to use AI for repetitive areas of decision making. “AI can play an important role in docket management and decision making, for something which is invariably the same, but it can never substitute human discretion,” he said.