The Nani Palkhivala National Tax Moot Court Competition 2011

Nani Palkhivala

The Moot Court Association of Government Law College organized The Nani Palkhivala National Tax Moot Court Competition (8th Edition) in association with the All India Federation of Tax Practitioners (AIFTP) and the Income Tax Appellate Tribunal Bar Association. The Moot was held from 13th – 15th October, 2011 and was dedicated to 150 years of the Bombay High Court. The competition saw participation from 26 of India’s best law schools. The final round of arguments were presided over by Hon’ble Mr. Justice Mohit S. Shah, Chief Justice, Bombay High Court, Hon’ble Dr. Justice D. Y. Chandrachud and Hon’ble Mr. Justice R. M. Savant, Judges, Bombay High Court.

Click Here to view the photographs taken on the occasion

The 7th edition of the Research Paper Competition was also organized by the AIFTP and the Income Tax Appellate Tribunal Bar Association in association with the Government Law College, Mumbai. The Research Paper by Adhitya Srinivasan & Vipul Agrawal of National Law Institute University, Bhopal titled Taxing International Transactions By Lifting The Corporate Veil was adjudged the Winning Research Paper.

Click Here to read the Research Paper

Speech of Hon’ble Shri. R. V. Easwar, then President of the Tribunal

Dr. Shivaram, President of the ITAT Bar Association, Mr. Patodi, the National President of the All India Federation of Tax Practitioners, Mr. Sathe, the Vice-President of the ITAT Bar Association, Mr R. B. Malik,the Principal of the Government law College, Prof. Sanjay Kadam, Chairman of the Moot Court Association, Ms. Kamal Modi, the General Secretary of the Moot Court Association, Mr. Manmohan, Vice-President of the ITAT, my esteemed colleagues in the ITAT, students of the Law Colleges, participants in the Moot Court Competition, ladies and gentlemen:

A very good evening to all of you!

I am privileged to be present here today with you all and participate in the inaugural function of the 8th Nani Palkhivala Memorial National Tax Moot Court Competition.

The problem today is that there seems to be a marked reluctance on the part of the law graduates, particularly those who pass out from prestigious law institutes and reputed colleges, to join the legal profession. It would be unfortunate for the legal profession if it were to be denied the opportunity of getting enriched by budding talent. More so, I am told that this trend is pronounced in the field of taxation law. I would urge you all to give a serious thought to this unfortunate trend

There can be no better way of sustaining the memory of perhaps India’s most eloquent advocate, the late Mr. Nani Palkhivala, than by instituting an annual tax moot court competition, inviting participants from the law colleges all over India. Income tax is a species of special legislation. It is one of the most fascinating branches of law. You will find that almost every one of our great judges in the Supreme Court of India, and the various High Courts, have, at some point of time in their professional career, appeared in tax cases and have commented fondly about the love they have for the tax law. I remember a brief interaction I had, while being posted at Delhi, with Hon’ble Justice R.S. Pathak, former Chief Justice of India and when I introduced myself as a Member of the ITAT, his face lit up and said: “Ah, the ITAT! You know Mr. Easwar, I fell in love with income-tax law on my first brush with it!” Some of India’s most brilliant advocates have taken up income-tax cases at the highest level. Some names, other than the late Mr. Palkhivala, which readily come to my mind are: Mr. M.C. Setalvad, Mr. Daphtary, Mr. Ashoke Sen, Sir Jamshedji Kanga, Mr. Rustom Kolah and so on.

It is sometimes thought that income-tax law is a technical and dry subject and concerns itself only with calculations. I am unable to subscribe to this view. If only you look up the law reports and examine the tax cases reported in them, you will find that there have been learned discourses by judges, based on illuminating arguments by counsel, about the fundamental principles of tax law, which are valid even now and you will find that there is nothing “technical” or “dry” about them. Those principles are as important, as valid and as interesting as those relating to any other branch of law — civil or criminal law, property law, personal law, corporate law, partnership law, copyright law or the more recent cyber law or intellectual property law. Apart from this, one very important aspect which I must tell you about tax law in India is that it is one of those rare branches of law to which all other branches of law apply significantly and some of the leading cases concerning other branches of law have been decided in matters arising under the tax law. For example, the difference between the property law in India and that in England with particular reference to the question whether different persons could hold the land and the superstructure was applied in a tax matter as far back as 1933 in the case of Madras Cricket Club. The question whether a karta of a Hindu Undivided Family can enter into a partnership with strangers with the help of his self-acquired property, even while remaining joint with his coparceners, was finally settled in the affirmative by the Privy Council in 1948 in the case of Lachman Das. Complicated questions relating to Hindu Undivided Family and its properties, rights of coparceners and its karta, partition, throwing of self-acquired property into the family hotchpotch etc. have been decided by the Privy Council, the Supreme Court and High Courts in cases arising under the income-tax law. The difference between a coparcenary and a Hindu Undivided Family has been lucidly explained by the Supreme Court in several cases arising under the income-tax law. What happens when a joint family enters into a partnership with another joint family and how the number of partners is to be reckoned was an interesting question that was decided by the Supreme Court in Dulichand Laxminarayan. In the context of the question as to whether the share of profits received by a partner from the firm should be assessed as business income or under the residuary head, the Supreme Court had occasion to appIy the basic principle of partnership law, embodied in Sec. 4 of the Partnership Act, that when a firm is said to carry on business it is actually the partners who are carrying on the business. You will find in the law reports several leaned judgments as to the nature of the partnership, its reconstitution, dissolution, etc. and many of these judgments arose under the income-tax law. The principles of company law have been applied by the Supreme Court in several cases arising under the income-tax law in the context of deciding as to under what head of income the remuneration received by the director or managing director is to be assessed having regard to the relationship between the company and the managing director. If you are familiar with the expression “business connection” in the context of the evolving law of international taxation, then you should be aware that about 45-50 years ago the Supreme Court decided in the case of R.D. Agrawal & Co. as to what that expression signifies. It is interesting to note that the amendment made in the year 1988 to section 2(47) of the Income-tax Act to rope in transactions of the nature described in section 53A of the Transfer of Property Act has its seeds in the argument put forth by Mr. K.N. Rajagopala Sastri, appearing for the revenue before the Supreme Court in the case of Alapati Venkataramiah in 1965 — 23 years before the amendment was actually made — to the effect that a transfer of possession after receiving consideration, without there being an actual registered document, is sufficient to attract capital gains tax. If you read some of the recent orders of the ITAT concerning international taxation and transfer-pricing issues, you will find proof of my statement in them. I would strongly appeal to those of you who want to make a mark in the field of taxation to read thoroughly the first 100 volumes of the Income Tax Reports and find for yourselves whether it is correct to say that income tax law is dry and technical!

I gave you those illustrations which immediately came to my mind and I mentioned them only to disprove the view held in some quarters that income-tax law is a technical and dry subject. There are not many branches of law with which so many other branches of law have interplay. Therefore, unless you are well-versed with the basic principles governing other branches of law, it will be difficult to come to grips with tax law and make an effective representation before the courts or the tribunals.

The problem today, as I understand, is that there seems to be a marked reluctance on the part of the law graduates, particularly those who pass out from prestigious law institutes and reputed colleges, to join the legal profession. It would be unfortunate for the legal profession if it were to be denied the opportunity of getting enriched by budding talent. More so, I am told that this trend is pronounced in the field of taxation law. I would urge you all to give a serious thought to this unfortunate trend. The purpose of a moot court competition is to train students of law in the art of advocacy and representation and it would be lost if the students are not motivated to join the legal profession, but choose to do desk work in large law firms. The tribunals and the Courts will be the losers. The ITAT affords a good training ground for young professionals with its informal atmosphere and less cumbersome procedure. We in the Tribunal happily welcome you to come and enlighten us!

The competitions will be starting from tomorrow. You will do well to remember that winning is not important, but putting up a sincere effort and exhibiting an indefatigable spirit is what matters. Be strong on facts, precise on law, arrange your arguments logically, appeal to the sense of justice within the framework of the law and be fair both to the court and to the opponent. Keep the decibel levels low. Above all, be brief and know when to stop!

I know when to stop and I would stop now! I wish the participants all the best. May the best team win. Thank you and Jai Hind!

Speech of Hon’ble Shri. D. Manmohan, Vice-President of the Tribunal

Hon’ble Chief Guest of the evening Shri R.V. Easwar, President of the ITAT, Dignitaries on the dais, my distinguished colleagues, distinguished invitees and my dear young law students –

Late Mr. Nani Palkhivala was well known to the society and its judicial system more as a constitutional expert than as a tax lawyer. It is my privilege to be invited as Guest of Honour of the opening ceremony of the Moot Court Competition, held in Mumbai in memory of late Shri Nani Palkhivala. Former Prime Minister of India Shri Atal Behari Vajpayee, on the occasion of release of commemorative postage stamp on 16th January, 2004 stated that “during the days of emergency battle for democracy was fought by many people in different ways, politicians fought the battle in prison but one of the finest battles fought in the Court Rooms was by Shri Nani Palkhivala“.

A young Lawyer should not feel complacent by earning handsome remuneration. In other words, winning the cases by using oratory skills and by hair-splitting distinction of every Letter of Law may make one a successful professional but your contribution to the society is much more than mere winning of cases or preparing highly technical legal documents; One has to channelise their knowledge to enhance the dynamic concept of Law in order to benefit the larger section of the society

He had a deep respect for the Constitution and fundamental principles embedded in it. In his words “Constitution must go in hand-to-hand with the progress of the human mind.” His another famous statement was “the Constitution was meant to impart such a momentum to the living spirit of the Rule of Law that democracy and civil liberty may survive in India beyond our times and in the days when our place will know us no more”.
I wish that the students who have gathered here – if not the entire student fraternity – should imbibe some of his qualities and do their bit to ensure that Law of Land maintains its supremacy above the personal/self-interests of individuals.
Justice Learned Hand remarked “Justice is the tolerable accommodation of the conflicting interests of the society and I do not believe that there is any royal road to attain such accommodation completely.”
A young Lawyer should not feel complacent by earning handsome remuneration. In otherwords, winning the cases by using oratory skills and by hair-splitting distinction of every Letter of Law may make one a successful professional but your contribution to the society is much more than mere winning of cases or preparing highly technical legal documents; One has to channelise their knowledge to enhance the dynamic concept of Law in order to benefit the larger section of the society. Unfortunately, many professionals might be traditionally giving more importance to the remuneration and the need to win the cases — come what may — which made Lord Halifox to comment by stating “if the Law could speak for themselves they would complain of the lawyers in the first place.” In substance, winning may be nice so long as you do not lose your integrity in the process.
Moot Court Competition conducted in memory of late Shri Nani Palkhivala is first of its kind in the sense that the focus is on tax representation and the skills needed to be acquired in this field.
Mr. Lews in his famous book ‘Why Flip a Coin’ stated with regard to Revenue Laws as follows:
“The federal Internal Revenue laws comprise of some ten thousand pages of dense, inscrutable, and tortured prose, often internally self-contradictory or ambiguous, full of exceptions to exceptions to exceptions, and clearly not written to be understood by even the most literate of the citizenry being taxed.”
Frequent amendments to the Tax Legislations in India gives me a feeling that India is not lagging behind in making the Tax Laws more difficult to comprehend. Since high stakes are involved in commercial litigation there is good scope for a committed lawyer to get handsome remuneration in this field. In order to be successful in the legal profession – either as an arguing lawyer or as a transactional lawyer or as an employee dealing with intricacies of Law – one should be wedded to the profession. In otherwords, there is no substitute for hard-work and dedication.
I may clarify that dedication is not restricted to your client but should extend to the Law and to the system of Justice that we must all strive to preserve and uphold. To do otherwise, to import our own personal values or prejudices, would be to undermine the principles of justice.
Many new entrants believe that there are number of precedents on each issue and there is not much scope for further growth. One has to bear in mind that Law is never static. Lord Denning compared it with streams of water. As you all know stagnated water is impure and streams of water is pure and clear. An intelligent Lawyer who could bring out a new interpretation to the existing law, based on changed times and context, will always have a satisfaction of keeping the laws pure and clear by way of
re-stating, reaffirming and developing the Law.
Lord Denning in his Book “Due Process of Law” stated “what appears to be a new groove chiselled out by some innovation may in reality be an apt extension of the old groove into which it is led by the true spirit and intent of the Law, or it may be the old groove itself which looks new only because it has been swept clean of the
detritus deposited by a line of imperfect decisions.”
My interaction with some of you gives me a feeling that if you choose the legal profession you would not only get handsome returns for the hardwork you put in but also contribute to the Nation with your logical thinking.
With these few words I thank all of you for a patient hearing. I thank the organisers for giving me an opportunity to share my thoughts.
I wish the young students ALL THE BEST.

(Speeches reproduced with permission from the AIFTP Journal, November 2011 Edition)