The Nani Palkhivala National Tax Moot Court Competition 2011
November, 14th 2011
The Moot Court Association of Government Law College organized The Nani Palkhivala National Tax Moot Court Competition (8th Edition) in association with the All India Federation of Tax Practitioners (AIFTP) and the Income Tax Appellate Tribunal Bar Association. The Moot was held from 13th 15th October, 2011 and was dedicated to 150 years of the Bombay High Court. The competition saw participation from 26 of Indias best law schools. The final round of arguments were presided over by Honble Mr. Justice Mohit S. Shah, Chief Justice, Bombay High Court, Honble Dr. Justice D. Y. Chandrachud and Honble Mr. Justice R. M. Savant, Judges, Bombay High Court.
The 7th edition of the Research Paper Competition was also organized by the AIFTP and the Income Tax Appellate Tribunal Bar Association in association with the Government Law College, Mumbai. The Research Paper by Adhitya Srinivasan & Vipul Agrawal of National Law Institute University, Bhopal titled Taxing International Transactions By Lifting The Corporate Veil was adjudged the Winning Research Paper.
Speech of Honble Shri. R. V. Easwar, then President of the Tribunal
Dr. Shivaram, President of the ITAT Bar Association, Mr. Patodi, the National President of the All India Federation of Tax Practitioners, Mr. Sathe, the Vice-President of the ITAT Bar Association, Mr R. B. Malik,the Principal of the Government law College, Prof. Sanjay Kadam, Chairman of the Moot Court Association, Ms. Kamal Modi, the General Secretary of the Moot Court Association, Mr. Manmohan, Vice-President of the ITAT, my esteemed colleagues in the ITAT, students of the Law Colleges, participants in the Moot Court Competition, ladies and gentlemen:
I am privileged to be present here today with you all and participate in the inaugural function of the 8th Nani Palkhivala Memorial National Tax Moot Court Competition.
The problem today is that there seems to be a marked reluctance on the part of the law graduates, particularly those who pass out from prestigious law institutes and reputed colleges, to join the legal profession. It would be unfortunate for the legal profession if it were to be denied the opportunity of getting enriched by budding talent. More so, I am told that this trend is pronounced in the field of taxation law. I would urge you all to give a serious thought to this unfortunate trend
There can be no better way of sustaining the memory of perhaps Indias most eloquent advocate, the late Mr. Nani Palkhivala, than by instituting an annual tax moot court competition, inviting participants from the law colleges all over India. Income tax is a species of special legislation. It is one of the most fascinating branches of law. You will find that almost every one of our great judges in the Supreme Court of India, and the various High Courts, have, at some point of time in their professional career, appeared in tax cases and have commented fondly about the love they have for the tax law. I remember a brief interaction I had, while being posted at Delhi, with Honble Justice R.S. Pathak, former Chief Justice of India and when I introduced myself as a Member of the ITAT, his face lit up and said: Ah, the ITAT! You know Mr. Easwar, I fell in love with income-tax law on my first brush with it! Some of Indias most brilliant advocates have taken up income-tax cases at the highest level. Some names, other than the late Mr. Palkhivala, which readily come to my mind are: Mr. M.C. Setalvad, Mr. Daphtary, Mr. Ashoke Sen, Sir Jamshedji Kanga, Mr. Rustom Kolah and so on.
It is sometimes thought that income-tax law is a technical and dry subject and concerns itself only with calculations. I am unable to subscribe to this view. If only you look up the law reports and examine the tax cases reported in them, you will find that there have been learned discourses by judges, based on illuminating arguments by counsel, about the fundamental principles of tax law, which are valid even now and you will find that there is nothing technical or dry about them. Those principles are as important, as valid and as interesting as those relating to any other branch of law civil or criminal law, property law, personal law, corporate law, partnership law, copyright law or the more recent cyber law or intellectual property law. Apart from this, one very important aspect which I must tell you about tax law in India is that it is one of those rare branches of law to which all other branches of law apply significantly and some of the leading cases concerning other branches of law have been decided in matters arising under the tax law. For example, the difference between the property law in India and that in England with particular reference to the question whether different persons could hold the land and the superstructure was applied in a tax matter as far back as 1933 in the case of Madras Cricket Club. The question whether a karta of a Hindu Undivided Family can enter into a partnership with strangers with the help of his self-acquired property, even while remaining joint with his coparceners, was finally settled in the affirmative by the Privy Council in 1948 in the case of Lachman Das. Complicated questions relating to Hindu Undivided Family and its properties, rights of coparceners and its karta, partition, throwing of self-acquired property into the family hotchpotch etc. have been decided by the Privy Council, the Supreme Court and High Courts in cases arising under the income-tax law. The difference between a coparcenary and a Hindu Undivided Family has been lucidly explained by the Supreme Court in several cases arising under the income-tax law. What happens when a joint family enters into a partnership with another joint family and how the number of partners is to be reckoned was an interesting question that was decided by the Supreme Court in Dulichand Laxminarayan. In the context of the question as to whether the share of profits received by a partner from the firm should be assessed as business income or under the residuary head, the Supreme Court had occasion to appIy the basic principle of partnership law, embodied in Sec. 4 of the Partnership Act, that when a firm is said to carry on business it is actually the partners who are carrying on the business. You will find in the law reports several leaned judgments as to the nature of the partnership, its reconstitution, dissolution, etc. and many of these judgments arose under the income-tax law. The principles of company law have been applied by the Supreme Court in several cases arising under the income-tax law in the context of deciding as to under what head of income the remuneration received by the director or managing director is to be assessed having regard to the relationship between the company and the managing director. If you are familiar with the expression business connection in the context of the evolving law of international taxation, then you should be aware that about 45-50 years ago the Supreme Court decided in the case of R.D. Agrawal & Co. as to what that expression signifies. It is interesting to note that the amendment made in the year 1988 to section 2(47) of the Income-tax Act to rope in transactions of the nature described in section 53A of the Transfer of Property Act has its seeds in the argument put forth by Mr. K.N. Rajagopala Sastri, appearing for the revenue before the Supreme Court in the case of Alapati Venkataramiah in 1965 23 years before the amendment was actually made to the effect that a transfer of possession after receiving consideration, without there being an actual registered document, is sufficient to attract capital gains tax. If you read some of the recent orders of the ITAT concerning international taxation and transfer-pricing issues, you will find proof of my statement in them. I would strongly appeal to those of you who want to make a mark in the field of taxation to read thoroughly the first 100 volumes of the Income Tax Reports and find for yourselves whether it is correct to say that income tax law is dry and technical!
I gave you those illustrations which immediately came to my mind and I mentioned them only to disprove the view held in some quarters that income-tax law is a technical and dry subject. There are not many branches of law with which so many other branches of law have interplay. Therefore, unless you are well-versed with the basic principles governing other branches of law, it will be difficult to come to grips with tax law and make an effective representation before the courts or the tribunals.
The problem today, as I understand, is that there seems to be a marked reluctance on the part of the law graduates, particularly those who pass out from prestigious law institutes and reputed colleges, to join the legal profession. It would be unfortunate for the legal profession if it were to be denied the opportunity of getting enriched by budding talent. More so, I am told that this trend is pronounced in the field of taxation law. I would urge you all to give a serious thought to this unfortunate trend. The purpose of a moot court competition is to train students of law in the art of advocacy and representation and it would be lost if the students are not motivated to join the legal profession, but choose to do desk work in large law firms. The tribunals and the Courts will be the losers. The ITAT affords a good training ground for young professionals with its informal atmosphere and less cumbersome procedure. We in the Tribunal happily welcome you to come and enlighten us!
The competitions will be starting from tomorrow. You will do well to remember that winning is not important, but putting up a sincere effort and exhibiting an indefatigable spirit is what matters. Be strong on facts, precise on law, arrange your arguments logically, appeal to the sense of justice within the framework of the law and be fair both to the court and to the opponent. Keep the decibel levels low. Above all, be brief and know when to stop!
I know when to stop and I would stop now! I wish the participants all the best. May the best team win. Thank you and Jai Hind!