ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Taxation and the Rule of Law

As necessary as the power of taxation is to the functioning of a proper government, constitutionalism and the rule of law require that the government’s powers to levy and collect tax should be governed by the letter of the law. Judicial oversight is supposed to ensure that the government follows the mandate of the law in revenue collection. However, the Supreme Court’s record on this matter has been less than salutary, its problematic approach, perhaps, reflected best in Mafatlal Industries Ltd v Union of India.

With a serious shortfall in collection of tax revenues from the budget estimates for the financial year 2018–19, the last few weeks have seen multiple reports of dubious measures taken by the tax authorities of the union government to extract more tax from taxpayers. Start-ups, which had been served notices on the so-called “angel tax,” found that their bank accounts had been emptied on the orders of the income tax department without so much as a hearing

(Sircar 2019). Refunds are alleged to have been delayed for previous years’ assessments in order to shore up tax collections (Sharma 2019).

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Updated On : 18th Feb, 2019
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