Different forms of imposts in the nature of ‘cess’ have become a matter of accepted practice over the last two decades. In this column, it was earlier discussed how the money earmarked for the object for which the concerned cess had been imposed had not been subserved in an appropriate manner. Very often, amounts have remained unutilised in the hands of Government or have been utilised for purposes other than for which the cess was, as per law, imposed.
More than Rs 27,000 crore has been collected under the Building and Other Construction Workers’ Welfare Cess Act of 1996. This Act, inter alia, provides for levy of cess on the cost of construction incurred by employers. The amount collected is deposited with the Building & Other Construction Workers Welfare Boards. The Act further requires the State Government to constitute Welfare Boards to provide assistance to workers including aiding the education of their children, helping out in case of accidents, pensions, loans and group insurance. Non-implementation of the Act and its machineries has led to a piling up of thousands of crores meant for the welfare of construction labourers. It needs to be noted that the cess amount is eventually exacted from hapless property buyers.
This issue had engaged the attention of the Supreme Court last week when the writer on account of illness could not contribute the column on June 29. Chief Justice of India Justice TS Thakur posed the question to the Central Government on July 1 that crores meant for the welfare of construction labourers were lying unused in banks frustrating the objective and perpetrating the miseries of the construction labour. The apex court asked for the name of one model State which has used the cess to better the lives of these poor people. More saddening and disturbing was the response of the Additional Solicitor General for the Centre when he stated, “We admit nothing has been done.” The court pressed into use the services of the Secretary of the National legal Authority to hold discussions with the Secretary of the Union labour Ministry and independently gather information on the shortfalls in the implementation of the Act and submit the concerned report in six weeks’ time. The Chief Justice with a heavy heart stated, “We have passed order after order, but nothing has been done.”
This is a sample of the ‘sincerity’ of the Central and State Governments to ensure an appropriate utilisation of the cess funds. Non-utilisation of such funds or mis-utilisation of such funds is a fraud on the legislature and the people. It almost becomes a pretended exaction on the basis of a professed objective which remains unfulfilled though the taxpayer is made poorer by the pretended exaction.
There is a cess for education, another for Swachchh Bharat and for several other professed welfare objectives. The scenario in these cases is more or less similar. The malady seems to be endemic and there is a lack of social commitment to the welfare objective that lies behind such forms of targeted taxation.
Alongside, there is a growing tendency over the last few years for the State Governments to impose what they describe as “users fee”. Mostly, there are no Acts of legislature authorising any such impost. In many cases, such an impost will not be permissible. Take for example the case of a Government hospital. The taxpayer is made poorer for funding these State activities. Any additional burden amounts to a form of second taxation for the very same purpose. A ‘fee’ is for a specific service rendered to a category of persons and can be realised on the basis of quid pro quo from the beneficiaries. Such persons are not necessarily entitled to the services on account of any otherwise collected tax for the same purpose. If legislations were to be brought to impose fees in such cases, they shall definitely be questionable and vulnerable. But it has become fashionable now for State Governments to go on adding such unauthorised fees notwithstanding the fact that the tax collected as general revenue is meant to meet such expenses.
These instances are like pick-pocketing by the State from the poor taxpayer without any authority of law. It has become almost a practice to run the Government by notifications and resolutions, which are executive instructions. The executive instructions cannot supplant law, and in the absence of a legislative sanction, the Constitution prohibits any impost in violation of Article 265 read with Article 300A of the Constitution. The innocent citizen is made to pay thousands of crores without any authority of law; and where there is an authority of law, the amount continued to remain with the Government unutilised, or at times, mis-utilised.
This trend needs to be curbed in the interest of the society at large. Another example, nearer home the Government of Odisha issued an executive instruction creating a Water Conservation Fund and called upon industrial users of water to contribute crores of rupees independent of other demands made for the same purpose. The Government has so far failed to convince the High Court of the legality of such an exaction, and the realizstion is not being insisted upon. These misadventures in fiscal administration are indicators of mal-governance and demonstrate misplaced reliance on executive fiats ignoring the Constitutional framework governing our polity.
Such erratic use of executive power tends to inspire a Government to irresponsibly tax and spend. Fiscal policy, formulated in accordance with law, is an instrument of social engineering. The calibration of the system to put matters in tune with the Rule of law is an immediate necessity. Raising resources without a study of the social costs leads to mal-governance and enables a section of exploiters to unjustly enrich themselves. A vast majority suffers and the smaller fraction enriches itself. This can lead to an internal imbalance, which is not conducive to a welfare-oriented progressive administration.
All these require a careful study by the younger generation, whose future is being adversely affected by such instances of poor governance. If the social objective of an enactment is not achieved, it has failed to subserve the relevant social objective, which would affect inter-generation developments and equity. The tendency amongst the elders to accept the situation without demur has to come to an end. The youths with the guidance with the elders have to now protect their future by identifying such instances and raising them as public issues for debate. They can also justify action through the machineries of law court through the medium of public interest litigations. But for this exercise to be organised in a meaningful and effective manner, every section of the society has to be involved in this critical task. This certainly concerns us all!
(The writer, a Senior Advocate, is a former All India Service officer, a former diplomat, a former editor, a former President of Orissa High Court Bar Association and a former Advocate General of Odisha. jayantdas@hotmail.com)