An American Poet Henry Longfellow said "The heights of great men reach and kept, were not attained by sudden flight, but they, whilst their companions slept, were toiling upward in the night"
The above words will equally apply to the Tax Advocates, GST Practitioners and other Tax Professionals, as no doubt they will have toiled into the night to draft the writ petitions, replies to show cause notices, grounds of appeals etc.
The pen is mightier than the sword. Confusion in drafting can be astonishing and result in unforeseeable consequences, surely that cannot be the intent while drafting.
I have been inspired by the talk on the topic aired on Youtube by CA. Bimal Jain and drove to write this article.
But the Indian economy now has changed, and with that change has also come a new breed of both businessmen and tax professionals all over the Country. This modern approach ignores the maxim “Law is for justice and not justice for law”, a principle which was historically applicable particularly to Tax cases. As a result, disputes arising from the orders passed by the Tax authorities to day can be long drawn out and expensive undertakings, whether parties seek to resolve them before a court or by arbitration.
Drafting is an art and not a mere skill and that every artist has his/her own way of doing it. Every Tax Professional/Practitioner must know the art of drafting. The primary objective of this article is to make the reader understand what is drafting, why it is needed in today's tax practice and what are the basic points to be kept in mind while drafting the replies to show cause notices, petitions, grounds of appeal etc.
This article does not intend to provide legal opinion, but just practical guidance for drafting.
Effective drafting entails understanding how the actual supply of goods or services or both will actually takes place, familiarity with applicable laws, circulars, notifications, press notes, relevant case laws and their implications, knowledge and command over language and the ability to concisely articulate these in a document and may continue to evolve during the life of the case.
Contradictory words in a petition, reply of objection shall result in much litigation, pain and expense for the clients. To put it in simple words, drafting skill is one's ability to express one's though process in writing. Metaphorically speaking, every case is like a new canvas for a draftsman. A Tax Professional (Painter) is supposed to paint his client's case on the canvas. The painter must be clear in his thoughts, artistic and the meaning of the painting must be conveyed to those who see it. On a practical note, the language and tone of every document must be clear and unambiguous. One should bear in mind that a document is never drafted for the academic pleasure of the draftsman. A document is a living thing - it has to live and face the scrutiny of several interested parties (the client, adjudicating authorities, courts etc.) Therefore, it has to be carefully crafted so as to protect client's interest to the utmost, be legally compliant and legible to all. Tax Professional has to be an excellent wordsmith and storyteller.
Tax Professional needs
(a) Knowledge of GST Act and Rules;
(b) Knowledge about the client and its business;
(c) Analytical skills;
(d) Ability to read between the lines; and
"Pleading" is not defined under any of the fiscal laws. When it is not defined under the fiscal laws, one has to follow/consult the ‘Code of Civil Procedure, 1908' (CPC). According to Rule 1 of Order VI of CPC defined as ‘Pleading' shall mean plaint or written statement.
Pleadings being foundation of litigation must contain only relevant material by excluding irrelevant and unnecessary information. To gather true spirit behind a plea it should be read as a whole. This does not distract one from performing his obligations as required under a statute.
As per Rule 2 of Order VI of CPC - Pleading to state material facts and not evidence.
(1) Every pleading shall contain only a statement in a concise form of the material facts on which the party pleading relies for his claim or defence, as the case may be but not the evidence by which they are to be proved.
(2) Every pleading shall, be divided into paragraphs, numbered consecutively, each allegation being, so far as is convenient, contained in a separate paragraph.
(3) Dates, sums and numbers shall be expressed in a pleading in figures as well as in words.
Pleadings of parties being foundation of the case cannot be given up and set out a new and different case.
As per Rule 4 - Particulars to be given where necessary - In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, willful default, or undue influence, and in all other cases in which particulars may be necessary beyond such as are exemplified in the forms aforesaid, particulars (with dates and items if necessary) shall be stated in the pleading.
The above Rules of Order VI to the CPC are exemplary and according to need of the draftsman, the pleadings may change from case to case basis.
Since no book on drafting and pleadings in GST, one has to resort to his own style of drafting but following with rules. I am enumerating a few of such rules or points for the benefit of the readers. While venturing to draft a reply to the show cause notice, three components should bear in mind.
a) Analysis of Show Cause Notice;
b) Evidence or information and Grounds to issue Show Cause Notice;
c) Identifying the missing points in the Show Cause Notice.
To submit objections in reply to show cause notice, an opportunity shall be provided to the registered taxable person. Allowing time to file objections is affording an opportunity, in compliance with the principles of natural justice or otherwise it shall be treated as denial of the opportunity. Audi Alteram Partem principle should be followed. Subject to maximum of three adjournments can be granted by the GST authorities provided sufficient reasons shown.
The following points to be kept in mind while drafting the reply of objections or writ petitions etc.
i) After receiving the Show Cause Notice, one should read the Show Cause Notice like a student reads the question paper in the Examination Hall;
ii) One should understand the contents of the Show Cause Notice and note down the contentions averred by the authorities and jot down the point wise to enable to draft the reply;
iii) Ensure that all the points covered under the draft as reply to the Show Cause Notice, because the reply to the Show Cause Notice is heart to the litigation. The adjudicating authorities cannot go beyond the Show Cause Notice;
iv) It is most important to ensure that, the Show Cause Notice or Notices or Summons or Orders of assessment is served on registered taxable person through the specified mode of service;
v) And the said Show Cause Notice or Notices or Summons or Orders of assessment are duly signed by the authority as prescribed under Section 26(3) of the Act and as conferred under the Act.
vi) And the said Show Cause Notice or Notices or Summons or Orders of assessment are duly sent under Document Identification Number (which is mandated by CBIC) as issued by the Central Tax Department. (which is not mandated by the State Authorities);
vii) Drafting should be in simple and lucid language, don't use any argumentative words or language.
viii) The points of defence should be point by point in a tabulated format, for easy and better understanding;
ix) The drafting should be confined to the law enunciated on the subject, unless it is demand the situation to refer to any case laws, that too the clear and direct bearing on the relevant subject, it is advised to refer such case laws only, if any iota of doubt arises in the mind of draftsman, then he/she should not resort to refer the case laws. Don't base on the head note of the case law alone, it is advised to read the entire text of case law for at least three times so that one can adjudge the facts of the case on hand and facts of the judgment;
x) List of dates and events should be given in a chronological order, which plays most important role in the drafting and pleadings.
Rome was not built in a day. Drafting is something which can be learnt, cultivated and improved with practice. Like sports persons or other artisans, drafting skills can also improve with time and experience. Finally, a good draftsman is one who is able to anticipate how a reply is likely to be interpreted by a Court or departmental officials and try and ensure that the Court will decide as per the clear intent of the parties which must be easily found in drafting.
Disclaimer: The contents of this article are for the educative information and does not constitute or purport to be an advice or opinion in any manner. The information provided is not intended to create an attorney - client relationship and is not for advertising or soliciting. The author does not intend in any matter to solicit work through this piece. He is not responsible for any error or mistake or omission in this piece of information or for any action taken or not taken based on the contents of this material.
Wish you all Happy Learning