 "Illustration: Binay Sinha")
On February 1, when interim Finance Minister Piyush Goyal stands up to present the Interim Budget in the Lok Sabha, he may enter a grey zone in constitutional law if he were to propose large-scale changes in tax laws.
Though there is no law under the Constitution preventing him from doing so, there is none backing the government’s move either, if they decide to bring in statutory changes in tax laws, say constitutional experts and lawyers.
“There is no legal barrier or constitutional prohibition which prevents the government from proposing changes in direct tax codes when it presents the Budget during an election year. The government is well within its rights to do so. And, it only proposes the Budget. It is actually enacted by Parliament,” notes Shubhankar Dam, professor of public law and governance at the University of Portsmouth School of Law.
The question of whether the government would propose changes to the direct tax code has assumed importance in the wake of a statement made by Finance Minister Arun Jaitley. Speaking to a television channel on January 17, Jaitley had said that though the interim Budget will be within the existing conventions, its contents would be dictated by economic compulsions and realities of the day. With Jaitley now advised rest, the onus to present the Budget proposals has fallen on Goyal.
Going by conventions, most governments in the past have refrained from proposing major changes in the Income-Tax Act in the interim Budget. While several governments have tinkered with indirect taxes, most finance ministers have kept income tax rates unchanged in the interim Budget.
Though there is no law under the Constitution preventing him from doing so, there is none backing the government’s move either, if they decide to bring in statutory changes in tax laws, say constitutional experts and lawyers.
“There is no legal barrier or constitutional prohibition which prevents the government from proposing changes in direct tax codes when it presents the Budget during an election year. The government is well within its rights to do so. And, it only proposes the Budget. It is actually enacted by Parliament,” notes Shubhankar Dam, professor of public law and governance at the University of Portsmouth School of Law.
The question of whether the government would propose changes to the direct tax code has assumed importance in the wake of a statement made by Finance Minister Arun Jaitley. Speaking to a television channel on January 17, Jaitley had said that though the interim Budget will be within the existing conventions, its contents would be dictated by economic compulsions and realities of the day. With Jaitley now advised rest, the onus to present the Budget proposals has fallen on Goyal.
Going by conventions, most governments in the past have refrained from proposing major changes in the Income-Tax Act in the interim Budget. While several governments have tinkered with indirect taxes, most finance ministers have kept income tax rates unchanged in the interim Budget.
