Rights are said to create correlative duties. The Constitution too has in Part IV –A incorporated certain duties in the form of Fundamental Duties. The inclusion of Fundamental Duties was imminently needed to bridle the growing lawlessness in India. The Sardar Swaran Singh Committee was formed to make recommendations about the same. The duty to pay taxes was one of the eight fundamental duties that the Committee suggested. The recommendation, however, was not accepted by the Legislature. Though not explicitly provided for in the Constitution, every citizen is still said to have an inherent duty to pay tax. A duty that most tax payers fail to acknowledge, as the growing rate of tax evasion and tax avoidance in India indicates.
The payment of taxes is seen as a legal obligation even as the government has brought into force various legislations to ensure the payment of taxes. The tax gap continues to increase every year as tax evasion is on the rise. The greatest indicator of this is the fact that the size of India’s shadow economy, as share of the GDP reached 26% in 2016. Such statistics make it evident that Indian citizens do not believe that it is their duty to pay taxes; rather, it is the duty of the state to collect it. Cases like McDowell & Co Ltd vs. The Commercial Tax Officer (1985 3 SCC 230), Union of India & Anr vs. Azadi Bachao Andolan & Anr (2004 10 SCC 1) and Vodafone International Holdings vs. Union of India (2012 6 SCC 613) are reflective of the general attitude of the masses towards the taxation regime and indicate how paying taxes is considered a burden and not a duty.
An alternative view can be taken of taxation, where it is not just considered the right of the state; rather, citizens can be said to have a duty to contribute their share of the expense of the protection of their rights for which the state came into being in the first place. Without taxes, the very existence of the state would be in peril, which would jeopardize the rights of the citizens. Therefore, the duty to pay taxes becomes a salient part of one’s citizenship. This was recognized in Miller Bros v State of Maryland (347 US 340(1954) – “The fact of residence creates universally reciprocal duties of protection by the state and of allegiance and support by the citizen. The latter obviously includes a duty to pay taxes, and their nature and measure is largely a political matter.” Several countries like Tunisia, China, Kuwait and the erstwhile UAR made provisions in their respective Constitutions regarding the duty of a citizen to contribute to the public exchequer according to his capacity.
The incorporation of the right to pay taxes as part of Fundamental Duties in the Constitution will shift the onus onto the taxpayer to pay taxes rather than the tax department to collect them. While inclusion of the duty to pay taxes may bring about greater compliance and collection, the tax gatherers need to observe their duties in the levy of taxes for the process to be successful. The role played by these tax gatherers extends beyond the mere levy and collection of taxes. They need to ensure that the laws relating to taxation are simple and certain such that it is easily comprehended by the tax payers who are not familiar with the technicalities of taxation. This is in fact one of Adam Smith’s most important canons of taxation. i.e., the Canon of Certainty. According to this canon, the tax which each individual is required to pay should be certain. The time of payment, the manner of payment and the amount to be paid should be clear to every tax payer. The application of this principle is beneficial both to the government as well as to the tax pay as it helps tax payers pay their taxes properly and avoid tax disputes. Tax collection needs to be systematic and tax gatherers need to not only legislate but also issue circulars and notifications from time to time to make the procedure more fruitful and simpler for the masses. Like Chanakya says in his Arthashastra, “One must collect tax from the people as painlessly as the bee draws nectar from the flowers”.
The Goods and Services Bill passed in 2016 is a major tax reform by the government of India. The new tax regime will check leakages, increase tax base for centre and states, eliminate cascading effect of tax on tax, reduce tax evasion and improve ease of doing business. By simplifying the taxation procedure for people, minimizing the tax burden and at the same time expanding the tax base, it may be a step towards increased compliance.
Article 51A does not talk about the duties of taxpayers or tax gatherers, but the inclusion of the fundamental duty to pay taxes may produce positive results. Fundamental duties, while not legally enforceable, provide a valuable guide and aid to interpretations of the Constitutional and legal issues. In case of doubt or choice, people’s wish as manifested through Article 51A can serve as a guide not only for resolving the issue, but also for construing or molding the relief to be given by the courts as observed in the case of All India Institution of Medical Sciences Students Union v AIIMS.
The duties in Part-IVA – Article 51A are prefixed by the same word ‘fundamental’ which was prefixed by the founding fathers of the Constitution to ‘rights’ in Part III. Every citizen of India is fundamentally obligated to develop the scientific temper and humanism. He is fundamentally duty bound to strive towards excellence in all spheres of Individual and collective activity so that the nation constantly rises to higher levels of endeavor and achievements. State is, all the citizens placed together and hence though Article 51-A does not expressly cast any fundamental duty on the State, the fact remains that the duty of every citizen of India is the collective duty of the State. Hence, the State too should play a role in furthering the citizens’ observance of their fundamental duties.
Fundamental Duties serve as a reminder for the citizens to perform specific duties and serve as a source of inspiration and commitment. They create the feeling that the citizens are not mere spectators but active participants in the realization of national goals.
Chinna Aswathy Abraham, IV Year, B.A LL.B(Hons), School of Law, SASTRA University