Vodafone & The Art Of Writing Judgements

Hon'ble Shri. D. Manmohan

Vodafone & The Art Of Writing Judgements

Hon’ble Shri. D. Manmohan, Vice-President (Mumbai Zone)

Hon’ble Shri. D. Manmohan uses his vast experience as a lawyer & Judge to explain how a judgement should be written. He cites the example of Vodafone International vs. UOI as a ‘model’ judgement for the way it has been structured. He also gives several other examples of judgements written by Lord Denning, Krishna Reddy & other Law Lords and emphasizes that Judges must use simple and clear language in their judgements

Before the advent of East India Company judgement writing was not as important as it is now. The decisions were rendered by Kings or Juries/Panchayats, who need to do no more than sum up, as briefly as possible. Under the common law system all the developed and developing countries are following the precedent based approach and there are hierarchy of courts. In order to enable an appellate court to understand as to why a judgement is rendered in a particular manner, the judge must now prepare the judgement often at considerable length.

Using short sentences while setting different facts and maintaining the simple flow of language, rather than flowery language, is preferable. One should always bear in mind that the expression used in the body of the judgement is of utmost importance to the parties who are laymen, not instructed under law

Judgement Writing – An Art:

Judgement writing is a skill that could be learned and practised. A well structured judgement enhances clarity. In fact ‘Art of writing of judgement’ has been a popular topic in most of the judicial conferences, not only in India but in United States of America and Australia. On account of computer evolution, reported and unreported decisions are available in abundance at the touch of a button and it is easy to cut and copy the observations of various courts; consequently voluminous judgements are rendered in a ‘scientific’ manner and this may give rise to a thought as to whether writing of judgement is an art or science. Some quotes of renowned persons may assist us to appreciate the difference between the two expressions i.e., Art and Science.

“The object of science is knowledge; the object of art is work. In an art, truth is the means to an end; in science, it is the only end” – William Whewell

“Science is continually correcting what it has said. Fertile corrections; science is a ladder. Art is a winged flight. An artistic masterpiece exists for all time” – Victor Hugo

Though computers have brought out a change in the method of rendering judgements, since the ultimate conclusions reached by a judge has to depend upon various flexible parameters, Judgement writing has to be considered as an art.

Virtues of a Good Judge

In fact to write a good judgement, you should possess the quality of a good judge. They are known as four ‘Ps’:

  1. Punctuality
  2. Probity
  3. Promptness
  4. Patience

Socrates also referred to four qualities:

  • Hear courteously
  • Answer wisely
  • Consider soberly
  • Decide impartially

In one of the stories connected to Vikramaditya (BATTISI), the 18th angel Rup Rekha explains four qualities expected from a judge:

  • Selflessness
  • Complete Honesty
  • Lack of bias or favouritism
  • A True urge to render justice

Just as a cryptic order would not pass the test of law, a verbose and lengthy judgement may involve consideration of certain unnecessary facts which again may not stand the test of law. Even with regard to the time frame for passing an order it is said that a judgement hurried is a judgement buried whereas a judgement delayed is a judgement denied

Importance of a Written Judgement

One has to bear in mind that a judgement is an act by which rights are created and obligations are imposed. Therefore it has consequences of importance to the parties. It also informs the parties as to what the judge has done and the reasons thereof. Thus it is essentially an act of communication directed principally to the person/persons receiving it.

Opinion of Shri Justice R.V. Raveendran, Judge of Supreme Court of India

In a lecture delivered at National Judicial Academy, Bhopal, he has set out elaborately on the mode of rendering judgements. I believe that the following points emphasised by his Lordships are to be necessarily borne in mind by all of you as a quasi judicial authority: –

Cases are not disposable commodities to be treated as mere statistics. Their purpose is not to provide monthly disposal quota to Judges.

Cases have to be decided purely on merits. A Judge should remain impartial. He should shun bias or prejudice. He should not be affected by pressures – either external or internal.

When a Judge ceases to have an open and impartial mind, he ceases to be a Judge.

When a Judge puts on his judicial robes, he should put off not only friendships, relationships, caste, community, religion, political sympathies, but also put off his prejudices and personal philosophies. Impartiality is a virtue, which is not easy to achieve, acquire or maintain. It requires constant effort and sacrifice.

Integrity is one of the building blocks which makes up impartiality.

It is better to ask questions and then decide. The object of your questions and observations, of course, should be to elicit relevant clarifications and not to exhibit your knowledge and learning.

The main functions of a reasoned judgment are: (i) to inform the parties the reasons for the decision; (ii) to demonstrate fairness and correctness of the decision; (iii) to exclude arbitrariness and bias; and (iv) to ensure that justice is not only done, but also seen to be done.

A judgement, howsoever detailed or lengthy, will be unintelligible or “non-speaking”, if it fails to disclose the reasons for the decision.

Simple words, short sentences, brief statement of relevant facts, thorough analysis of the evidence, clear enunciation of the legal position, proper application of the law to the facts in clear terms, are the hallmarks of a properly written judgement or order.

Adopt Your Own Method

There is no fixed method of writing the judgement. Every person has his own style and I firmly believe that one should not give over importance to form, rather than the substance of the matter, in delivering a judgement. The first duty of a judge is to ensure that his judgement is complete as a public act and as an act of communication with the parties. No doubt he may incidentally render a judgement involving clarification or development of law.

Anatomy of a Judgement

Essentially a judgement must contain:

(a) the facts,

(b) statement of the question to be determined arising from the facts,

(c) the legal position thereon,

(d) The reasons/analysis of the law and facts, and

(e) resultant conclusion and the orders to be made.

As all of you are aware that a judgement is a result of application of law to the facts. The duty of the judge is to collect the facts from both sides and evaluate the facts with the support of the statutory prescriptions, as interpreted by the binding precedents. While preparing the summary of the facts and legal position, a clear distinction has to be maintained between the facts stated by the representatives, facts agreed upon, facts in dispute and exact claim of each party.

This structure provides a clear overview of the specific issues that need to be addressed.

Simple English

While stating the facts it is advisable to use plain English, one should avoid compound constructions. For example: ‘at that point of time’ can be substituted by the expression “then’ and in the place of ‘for the reason that’ the expression ‘because’ will do. One should not use language open to misunderstanding.

Metaphoric Expressions – To be Used only in Exceptional Cases

If one has the ability and skill of Justice Krishna Iyer or Justice Frankfurter, one may occasionally use metaphoric expressions/ornate words but in the ordinary course it is advisable to use simple vocabulary and avoid verbosity, since such a judgement is a torture to its readers to read.

Let me quote some metaphoric expressions or ornate words used by eminent judges, who can be taken as role models.

Justice Krishna Iyer:

“A study of the anatomy and cordiology of the statute, not it’s formal structure, but it’s heart beats”.

On appeals filed by government;

"If an ordinary litigant is negligent, the penalty of dismissal inflicts only individual harm; but if the state is guilty of latches and consequently suffers dismissal of it’s petitions, the impact of public revenue is immense and the community suffers. In such a case the present series of petitions may seem to verge perilously on negligence on the part of the state government – a critical legislature and vigilant public opinion must censure the impersonal callousness of the Government.”

A private person can take instant decision while a bureaucratic or democratic organ hesitates and debates, consults and considers, speaks through paper, moves horizontally and vertically till at last it gravitates towards a conclusion – unmindful of time and impersonally.

Justice Frankfurter, one of the great judges of yesteryears was fond of using abstruse and ornate words. On ‘governing constitutional principles’, concerning the meaning of the contract clause in federal constitution he observed:

When a widely diffused public interest has become enmeshed in a network of multitudinous private arrangements, the authority of state to ‘safeguard the vital aspects of the people’ is not to be gainsaid by abstracting one such arrangement from it’s public context and treating it as though it were an isolated private contract constitutionally immune from impairment. (326 US 230 & 232)

Probably such expressions are not meant to be understood by an average reader. The use of abstruse words is, for that matter, is of course no yardstick for evaluating a judge’s style.

In this context John Stephens, an eminent English Judge observed;

It is not enough to attain a degree of precision which a person reading in good faith can understand, but it is necessary to attain, if possible, to a degree of precision which a person reading in bad faith cannot misunderstand."

Example of Plain English

The statement of facts from the majority opinion in Palsgraf vs. Long Island Railroad Co. 248 NY 339 written by Justice Benjamin Cardozo is taken here as an example of plain English:

“Plaintiff was standing on a platform of defendant’s railroad after buying a ticket to go to RockwayBeach. The train stopped at the station, bound for another place. Two men ran forward to catch it. One of the men reached the platform of the car without mishap, though the train was already moving. The other man, carrying a package, jumped aboard the car, but seemed unsteady as if about to fall. A guard on the car, who had held the door open, reached forward to help him in, and another guard on the platform pushed him from behind. In this act, the package was dislodged and fell upon the rails. It was a package of small size, about fifteen inches long, and was covered by newspaper. In fact it contained fireworks, but there was nothing in its appearance to give notice of its contents. The fireworks when they fell exploded. The shock of the explosion threw down some scales at the other end of the platform many feet away. The scales struck the plaintiff, causing injuries for which she sues.”

One should notice his choice of words. Without any archaic phrases, no misty abstractions, no metaphoric expressions. Most of the sentences are not only in simple English but very short containing about 15 words and he preferred to use active voice.

Similarly, in many conferences, simple expressions used in the judgement of Lord Denning are taken as the best style to be adopted to explain the facts and legal decisions.

Lord Denning wrote about his own style of writing judgement in the following words: –

I try to make my judgement live … I start my judgements as it were with a prologue – as the chorus does in one of Shakespeare’s plays – to introduce the story. Then I go from act to act as Shakespeare does –each with its scenes – drawn from real life… I draw the characteristics as they truly – using their real names… I avoid long sentences like the plague: because they lead to obscurity. It is no good if the hearers cannot follow them… I refer sometimes to previous authorities. I have to do so because I know people are prone not to accept my views unless they have support from the books. But never at much length. Only a sentence or two… I finish with a conclusion – and epilogue – again as the chorus does in Shakespeare. In it, I gather the threads together and give the result.”

In most of the cases the Tribunal acts as a second appellate body and hence the facts can be taken from the orders passed by the Commissioners of Income Tax. If this is done, the source should be recorded. It has to be seen whether all the facts have been collected properly and whether all evidence was obtained according to law. No doubt the judgement should be expressed in a language and style which suits the decision maker. But the essential fact that has to be borne in mind is lucidity rather than style. Using short sentences while setting different facts and maintaining the simple flow of language, rather than flowery language, is preferable. One should always bear in mind that the expression used in the body of the judgement is of utmost importance to the parties who are laymen, not instructed under law. In other words, the judgements are basically meant to be read and understood by laymen, not by scholars. What Lord Denning said about ‘words’ as "lawyers’ tools of trade" is also true of "judges":

Words are the lawyer’s tools of trade in writing or by words of mouth – you must use words. There is no other means available… If others find it difficult to understand you, it will often be because you have not cleared your own mind of obscurity in thought which inexorably leads to obscurity in language.” (Lord Denning – Discipline of Law)

In my opinion the command and effective use of English language are indispensable tools in producing good judgement which can stand the test of scrutiny by higher forums and, at the same time, also satisfy the parties in dispute.

Once the facts are stated in clear terms, i.e., by separating the facts in dispute and facts not in dispute, one has to analyse the facts from the point of view of the respective parties so as to determine the questions arising from the facts; upon careful analysis of relevant provisions of law and the legal precedents thereof, the resultant conclusion can be recorded effortlessly. The reasons should preferably be stated in the last paragraph of the order/judgement.

As I have already mentioned hereinbefore that there are as many models of writing a judgement as the number of judges are. The recent judgement of the Apex Court in the case of Vodafone (341 ITR 1 (SC)), though exhaustive, can be taken as one of the model judgements wherein the Hon’ble Chief Justice has divided the judgement into various sub-heads i.e.,

(i) Introduction

(ii) Facts

2(a) Evolution of the Hutchison structure and the Transaction

2(b) Ownership Structure

Correctness of Azadi Bachao case -Re: Tax Avoidance/ Evasion

Our Analysis

International Tax Aspects of Holding Structures

Whether Section 9 is a "look through" provision as submitted on behalf of the Revenue?

Transfer of HTIL’s property rights by Extinguishment?

Role of CGP in the transaction

Did VIH acquire 67% controlling interest in HEL (and not 42%/52% as sought to be propounded)?

Approach of the High Court (acquisition of CGP share with "other rights and entitlements")

Scope and applicability of Sections 195 and 163 of IT Act

Summary of Findings

Conclusion

Order

Reasons to be Recorded

As all of you are aware that the Income Tax Appellate Tribunal is not a court in strict sense, though it has all the trappings of a court. Section 254(1) of the Income Tax Act, 1961 (originally section 33(4) of the Income Tax Act, 1922) uses the expression “pass such orders thereon as it thinks fit”. The word “as it think fit” does not vest with the Tribunal an arbitrary power to pass its order/judgement with out giving reasons. In the case of CIT vs. Walchand Co. P. Ltd. 65 ITR 281 the Apex Court clarified; –

“It is necessary to emphasise that, though the Tribunal is not a court, it is invested with judicial power to be exercised in manner similar to the exercise of power of an appellate court acting under the Code of Civil Procedure. Authority to "pass such orders thereon as it thinks fit" in section 33(4) of the Income-tax Act, 1922, is not arbitrary: the expression is intended to define the jurisdiction of the Tribunal to deal with and determine questions which arise out of the subject-matter of the appeal in the light of the evidence, and consistently with the justice of the case. In the hierarchy of authorities the Appellate Tribunal is the final fact-finding body: its decisions on questions of fact are not liable to be questioned before the High Court. The nature of the jurisdiction predicates that the Tribunal will approach and decide the case in a judicial spirit and for that purpose it must indicate the disputed questions before it with evidence pro and con and record its reasons in support of the decision. The practice of recording a decision without reasons in support cannot but be severely deprecated.”

In the case of Hindustan Times vs. Union of India [1998 (2) SCC 242] the Hon’ble Supreme Court though Sri M. Jagannadha Rao observed as under: –

“The necessity to provide reasons, howsoever brief, in support of the High Courts’ conclusions is too obvious to be reiterated. Obligation to give reasons introduces clarity and excludes or at any rate minimises the chances of arbitrariness and the higher forum can test the correctness of those reasons…… the duty of the Judge is to uphold his own integrity and let the losing party know why he lost the case. The legal profession is entitled to have it demonstrated that the Judge had the correct principles in mind, had properly applied them and is entitled to examine the body of the Judgment for the learning and precedent that they provide and for the reassurance of the quality of the Judiciary which is still the centre-piece of our administration of justice.”

There is, no doubt, lot of pressure on the disposal of cases. There is increase in the institution of cases in every court. However, in the case of Assistant Commissioner, Works Contract vs. Shukla (judgement dated 15.04.2010) their Lordships Justice S.H. Kapadia and Justice Swanantra Kumar observed that “increasing institution of cases, pendency and burden on courts cannot be a reason to dispense with reasons for passing an order ……. Whether it is administrative or quasi judicial authority, they have to pass speaking orders since there is a legitimate expectation on the part of the parties of knowing the reasons. Reason is the very life of law. When the reason of a law once ceases, the law itself generally ceases (Wharton’s Law Lexicon)….. unqualified obligation upon the Courts to record reasons. Requirement of reasons does not mean very detailed and lengthy order but there should be some reasoning for determining the relief or denial of relief to litigants. The purpose is to make the litigant aware of the reasons on which relief is declined and for the higher court to assess the correctness of the view.”

Thus, elaborate reasons do not mean writing a lengthy judgement. Writing lengthy judgement has the tendency of giving prominence to irrelevant material than the issues at stake, and therefore, should be avoided. Long sentences are usually complicated and rambling. In the case of CIT vs. Daulat Ram Rawatmull (87 ITR 349) the Apex Court was concerned with the issue of determining as to whether a sum of Rs.5,00,000/- available in the fixed deposit of Biswanath Bhuwalka is assessable to tax in the hands of Shri Daulat Ram Rawatmull. Learned Commissioner’s observation was that the office of the Central Bank in Burra Bazar, Calcutta is in the same building in which the respondent firm’s business premises is situated. In this regard the court observed that this fact is a wholly extraneous and irrelevant circumstance for determining the ownership of Rs.5,00,000/- which had been deposited in the name of Biswanath; deposit is not connected to assessee-firm.

The court observed (87 ITR 349), “the use of extraneous and irrelevant material in arriving at that conclusion would vitiate the conclusion of fact because it is difficult to predicate as to what extent the extraneous and irrelevant material has influenced the authority in arriving at the conclusion of facts.”

A-B-C of Writing Judgement

Therefore to avoid the temptation of writing long judgements one has to strictly adhere to a, b, c of legal writing, namely, accuracy, brevity and clarity. Of course the judgement must not be so brief to omit the consideration of the vital evidences in the case. Judgement of court should be a compendium of the facts, reasoning, evidences and consideration of the court. The judge should not merely ‘believe’ or ‘disbelieve’ evidences. There is neither a magic wand nor sanctity in the words ‘believe or disbelieve’. In the case of Agbanya vs. The State 1 NWLR (Prt. 369) 1 the court stated that the words ‘believe’ should rather represent court’s reaction towards proving the facts, possibilities and probabilities based on fact – accurately assessed and established.

It is true that brevity is an art but brevity without clarity, likely to enter into the realm of absurdity, is impermissible.

In this background, the Supreme Court in the case of Saheli Leasing Industries 324 ITR 170 (SC) laid out the following guidelines for writing judgements: –

(i) It should always be kept in mind that nothing should be written in the judgement/order, which may not be germane to the facts of the case; It should have a co-relation with the applicable law and facts. The ratio decidendi should be clearly spelt from the judgement/order.

(ii) After preparing the draft, it is necessary to go through the same to find out, if anything, essential to be mentioned, has escaped discussion.

(iii) The ultimate finished judgement/order should have sustained chronology, regard being had to be concept that it has readable, continued interest and one does not feel like parting or leaving it in the midway. To elaborate, it should have flow the perfect sequence of events, which would continue to generate interest in the reader.

(iv) Appropriate care should be taken not to load it with all legal knowledge on the subject as citation of too many judgements creates more confusion rather than clarity. The foremost requirement is that leading judgements should be mentioned and the evolution that has taken place ever since the same were pronounced and thereafter, latest judgement, in which all previous judgements have been considered, should be mentioned. While writing judgement, psychology of the reader has also to be borne in mind, for the perception on that score is imperative.

(v) Language should not be rhetoric and should not reflect a contrived effort on the part of the author.

(vi) After arguments are concluded, an endeavour should be made to pronounce the judgement at the earliest and in any case not beyond a period of three months. Keeping it pending for long time, sends a wrong signal to the litigants and the society.

(vii) It should be avoided to give instances, which are likely to cause public agitation or to a particular society. Nothing should be reflected in the same which may hurt the feelings or emotions of any individual or society.

Reasonable Time

Just as a cryptic order would not pass the test of law, a verbose and lengthy judgement may involve consideration of certain unnecessary facts which again may not stand the test of law. Even with regard to the time frame for passing an order it is said that a judgement hurried is a judgement buried whereas a judgement delayed is a judgement denied. It is always preferable to pass an order immediately after hearing the appeal. Any delay may consume further time of the judge in going through the facts and material once again.

Timeframe for pronouncement of judgements

As observed by the Supreme Court in Saheli Leasing case (supra), ordinarily a judgement has to be passed within a reasonable time frame and it should not exceed 90 days. Rule 34 of the Appellate Tribunal Rules refers to the timeframe within which an order has to be pronounced by the Members of the Tribunal.

Summary

To summarise, the judges in the Income Tax Appellate Tribunal have the advantage of knowing the brief facts of the case of the Revenue, from the respective orders passed by the Department officials, and also the case of the assessee as projected before the tax authorities and also the points which are sought to be highlighted at this stage and all that the Tribunal has to do is to arrange the facts and law in a logical sequence, by chopping out irrelevant facts; If facts have to be stated as it is, mention the source thereof but it is always beneficial if the facts are summarized in your own style so that only facts which are relevant for disposal of the issues on hand would find appropriate place in the preamble as well as in the facts in dispute. Once the facts are properly analysed, relevant provisions of the law are noticed and the proper questions are taken note of, it would be very easy to arrive at the conclusion.

However, while giving judgements, the facts as well as the legal position has to be analysed objectively and not subjectively. Personal opinion of a Judge should not be incorporated while disposing of the case; Cases to be decided on objective analysis. In other words, justice should not only be done but it should appear to be done and hence any mention which gives a feeling of bias to any of the parties before you should be avoided.

Using harsh language/impertinent language should also be avoided. The notion that lengthy arguments require lengthy judgement to meet the points may not be correct in all the cases. If not an extempore approach, delivering a judgement within the shortest span of time from the date of hearing has its own advantage in majority of the cases because the arguments as well as the facts are clearer and one can avoid reading the whole brief by spending additional time.

Best drives out the good

Most of us place too much importance to felicity of judgements whereas all of you are aware that most of the judgements are little read; those not concerned seldom read them and those concerned (except for the purpose of finding an arguable point) seldom read beyond the last page. Therefore, it is not necessary that a judgement should be decked up like a work of art. One should remember the adage ‘the best drives out the good’. Therefore, in order to achieve the best, do not defer writing a judgement which would have been otherwise a good judgement.

Deferring of preparation may not serve any purpose except those matters which are too complex to deal with immediately. Above all a patient hearing is a prerequisite of being a judge and one should avoid making comments in the court which may reflect bias.

Let me end my talk with an interesting story.

Tales of Vikramaditya of Ujjaini – Sincerity in your action leads to excellence and applying proper test leads to correct judgement

Story is about rivalry between Rambha and Urvashi. Judgement has to be given as to who is the best dancer. Both are renowned for their unsurpassed beauty and for their dancing skills. They are in fact heavenly dancers and heavenly courtesans. Their job, according to mythology, is to tempt and attract even ascetics with their charms and skill in dance. Not only Indra, the ruler of Amaravathi, even Gods could not decide as to who is the best between them for two reasons, i.e., (a) facts are identical, (b) risk of displeasing the other, i.e., either Rambha or Urvashi, if they are not able to give reasons acceptable to them. They decided to refer the issue to a human judge Vikramaditya.

He was initially reluctant and when pressed by Gods he remained lost in thought for a while and then, after planning out a strategy in his mind, agreed to act as a Judge and set a day for making a decision.

Just before the dance competition began, Vikram asked for two floral garlands to be brought. He gave each of them a garland which they were requested to wear during their dance.

The dance began and both Rambha and Urvashi were at their best. The audience of Gods, Goddesses and celestial sages watched spellbound as their performance ascended to greater perfection every moment. Both are known for their exemplary skill in the art of dance but today the whole audience felt that no one could ever dance to greater perfection.

In the Tribunal near equal performance is witnessed when, apart from facts and law, representatives on both sides prepare and argue to their best.

Back to the Rambha & Urvashi, as they were dancing breathtakingly, to the utter dismay of everybody Rambha made her first mistake – a slight imperfection and then another and chain followed. Instead of giving best performance of her life, Rambha was giving the worst performance ever; dancing like an amateur. She finally left the stage in shame. No one had any doubt as to who is the winner. Judgement is obviously easy now. Everybody turned to Vikram to know as to how he could achieve this miracle.

Vikram explained the test he had designed. The garlands he gave to the dancers had a scorpion hidden inside each. So long as the dancers danced to perfection, their rhythm would be so smooth that the scorpions would be unaware of their movements – their steps and movements would lull them into a kind of contended sleep. That is how Indian dances are designed. But the moment the steps become less than perfect, this trance would be disturbed and scorpions would feel the jarred movements. Awakened from the trance, they would sting the wearer. And that is what had happened to Rambha.

But the important question is how Rambha’s movements became less perfect in the first place.

As the dance progresses, the best of dancers transcends themselves and then it is no more they dancing, but dance happening through them; Dance flowing out of the dancer on its own. It becomes pure dance, without dancer being present. The result is unsurpassed excellence. Urvashi kept dancing in self thoughtlessness. She became one with her dance.

In the case of Rambha, as dance progressed, a thought came to her mind – “how well I am dancing”. And that thought created a gap between her and the dance. She was no more one with the dance but there was a distance between the two, a distance created by her self-consciousness, by her ego. The moment the thought, the ego, appeared, her dance became imperfect resulting in jarred movements which awakened the scorpion and it stung her.

It was not Urvashi who defeated Rambha but her own ego. This story teaches us a lesson that even in a judgement writing, if we shed our ego, i.e. feeling, that we know everything and we are more than competent to decide the fate of parties, a perfect judgement flows automatically.

Now it is my turn to thank all of you for giving me a patient hearing and for the Hon’ble President for giving me an opportunity to share my ideas with all of you.

Lecture delivered by Shri D. Manmohan, Vice President on 21st February 2012, during the Orientation & Training Programme of newly appointed Members of Income Tax Appellate Tribunal. Reproduced with permission from the AIFTP Journal, March 2012
5 comments on “Vodafone & The Art Of Writing Judgements
  1. mubarak says:

    good to read.

    • In Australia, there is a format prescribed for judgments of High Courts but nothing such in India. Most of the judgments delivered in India are DISPOSALS. A judgment should , inter alia, contain – facts of the case, evidence for and against the case,arguments for and against the case, court rulings submitted for and against the case and reasons for acceptance and rejections for all the above. Further the judgment should also contain conclusion and reasons for acceptance and rejection of the reliefs claimed so as to avoid repeated appeals.It is insufficient to say that any particular rulings does not apply to the case in hand but it must be categorically explained that what are the circumstances to differentiate the case. The above Article does not fulfill all theses conditions hence I evaluate it as incomplete from the view point of public.

  2. Sanjeev Josh says:

    Dear CA Prarthanajalan and all others,

    I appreciate your concern for sanctity of ‘landmark cases’ and acknowledge your right to that opinion. Nevertheless, as a student of tax jurisprudence I pray and appeal to you to examine the issue in the light of three established legal principles in the following three major countries of the world:

    1. China: The Indian Tax Dept. applied certain principles/arguments to raise the multi-crore tax demand against Vodaphone. As you rightly pointed out, the said official principles/arguments were considered insufficient by the Hon’ble Supreme Court. Now the govt. went ahead and amended the Income Tax Act from retrospective effect. I would request you and other interested persons to examine this issue in Chinese tax jurisprudence. You would find that they hold the same position as the Indian tax authorities! And the so called foreign investors do not object to that Chinese position!!!

    2. Canada: If you research Canadian Income Tax Jurisprudence, you will find that almost every ‘landmark case’ such as Vodafone has consistently been nullified by retrospective amendments. This is the standard procedure. The govt. does not even wait for the budget session to bring retro-amendments. They just introduce a “way and means” motion in that month itself and parliament happily passes the retrospective-amendments without any fuss or controversy! The taxpayers, lawyers, CAs know that will happen and so just smile and be happy.

    3. America: If you hold US citizenship, you are subject to taxation of your world income, irrespective of whether you resided in America or not. No US citizen objects!

    I have just given 3 examples. There are hundreds of inequities in taxation. Have you not heard “There is no equity in tax!”

    In India, the Hon’ble Supreme Court has laid down the principle: “If there are two opinions possible on an issue, the one most favourable to the assessee would be applied and accepted!!!!!!!!” There are thousands of decisions based on this principle. I once came across a Hon’ble ITAT decision of just one para. It merely said, the AO wants to tax this amount as income and the taxpayer says it is capital. Since there are two opinions, so the one most favourable to the assessee would be accepted!! Finished!! Half page judgment!! With folded hands I request you to see the tax decisions of other countries and see if this principle is used so mercilessly as here to give relief to tax-payers.

    Brother, your value as a tax professional is only up to a time when there are such controversies and the govt. is alert to plug loop-holes. The moment every law is clear, simple and always favouring the tax-payer, there would be no value and respect given to the professional. I remember about 25 years ago, Mr Munna Lal Agarwal, eminent Tax Advocate of Lucknow, once said to me, ” If the complications do not arise in simplification of taxes, there would be no respect for the tax professional! It is only through simplification that controversies are given birth and our value restored/recognised. Every taxpayer now knows what is 143(1); how the Board wants returns to be examined! If there is no simplification and if sec. 143(1) is not renamed or not simplified, who will seek clarifications from the professional, how ITO will make additions, how would we file appeals, how would clients say “Vakilsab bahoot kabil hai, appeal mae kitni badi relief laye etc”

    I am sure I have disturbed the hornet’s nest……..But what I am saying, is simple international tax jurisprudence and ordinary tax-practice ! You may not like it. I have no issues with that. I shall respect you for holding an opposite opinion that even goes against the interests of the professionals, themselves.

    Got to run, bye

    sanjeev josh llb, dmb, fca, mtax, irs

  3. manmohan says:

    summary of case (chart) to be shown below ANOTOMY OF A JUDGEMENT

  4. prarthana says:

    Though the government has within the power provided the retrospective ammendment to nullify vodafone case but I think that there should be a special provision in the law that even though retrospective ammendments are made but those landmark judjment becoz of which such a step is taken should not be affected by it. It takes a hell lot of time, energy, money, efforts to win a case till supreme court. Landmark cases should be given their due.

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