The CBIC is being pummelled

March 31, 2021 3:50 AM

It is hurtling into an abyss ‘where angels fear to tread’

The IRS cadre is said to be short by over 2,000 officers, while other executive levels have over 18,000 vacancies. Every field formation works at about 50% strength. No urgency has been shown in filling these vacancies.

By Ajay Agnihotri

When clouds appear, wise men put on their cloaks;
When great leaves fall, the winter is at hand;
When the sun sets, who doth not look for night?
(Richard III, 2.3)

Last few weeks have spelt such trouble for the Central Board of Indirect Taxes and Customs (CBIC) that they would be reminded of this Shakespeare’s quote above. Unfortunately, while a common person would take and exercise reasonable care, the CBIC is hurtling into an abyss ‘where angels fear to tread’.

The Supreme Court came down heavily on the department’s legal incompetence in the famous ‘Canon’ case. This was quickly followed by the Madras High Court chastising the department on the issue of ‘proper officer’ in the ‘Quantum Coal’ case. The net effect is that every demand notice issued by the Directorate of Revenue Intelligence (DRI) since 2012 has been held illegal because the officers issuing the notice were not authorised by the CBIC to do so.

This battle doesn’t end here. The next big blow may be that every regulation and circular ever notified by the CBIC is illegal. Earlier, I had through this paper brought it to the notice of the government that there is no notification issued under Section 4 of the Central Boards of Revenue Act, 1963, which constituted the Central Board of Excise and Customs. Section 4 of the Act laid down that the procedure for the functioning of the Board would be notified by way of rules for the purpose of regulating the transaction of business by each Board.

Every order made or act done in accordance with such rules shall be deemed to be the order or act, as the case may be, of the Board. Fifty-six years have gone by and no rules for functioning of the Board have been notified. The ‘Board’ continues to function as they find convenient.

There could not be a better time than now for a review of the functioning of the Board and how powers are exercised. A beginning should be made by the finance minister by ordering an external audit of the defective notification issued in 2012, which has led to the Canon judgment. And officers, serving or retired, should be duly sanctioned.

For far too long India has endured an incompetent tax bureaucracy, which calls itself a professional tax administration. While direct taxes board is responsive of the changing times; policymakers in the CBIC have time again exposed their lack of business sense while drafting laws and procedures.

The last four years have seen enough angst being expressed in print and the social media on the complexity in GST laws. On the Customs side, we have not seen any reform except for a poorly conceived faceless assessment, which is said to be largely kept afloat through 100-odd daily messages over WhatsApp!

The organisation is beleaguered with staff shortages with no workaround having been found since the last decade or more. Across all levels there are a huge number of vacancies. The IRS cadre is said to be short by over 2,000 officers, while other executive levels have over 18,000 vacancies. Every field formation works at about 50% strength. No urgency has been shown in filling these vacancies.

It seems no one in the CBIC heard the Prime Minister’s iconic address on Indian bureaucracy in Parliament last month and Nitin Gadkari’s speech on the inauguration of the NHAI building which has gone viral. In the words of Muhammad Iqbal and with pardoned changes:

‘… Ki fikar kar nadan! Musibat aane wali hai;
Teri barbadiyon ke mashware hain asmanon mein;
Zara dekh uss ko jo kuch ho raha hai, hone wala hai;
Dhara kya hai bhala ehd-e-kuhan ki dasatnon mein;
Ye khamoshi kahan tak? Lazzat-e-faryad paida kar;
Zameen par tu ho aur teri sada ho asmanon mein’

The author, a former IRS officer, is an advocate

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