Their Lordships don’t like paying income tax

A closed-door conference of Chief Justices of High Courts across the country, chaired by Chief Justice of India B N Kirpal, met in the capit...

A closed-door conference of Chief Justices of High Courts across the country, chaired by Chief Justice of India B N Kirpal, met in the capital over three days and resolved to ask the Centre for several tax breaks for themselves.

And, in what flies in the face of a Supreme Court ruling on the subject, they set up a special committee of judges to study their controversial proposal of making their salaries ‘‘tax-free.’’

The Sunday Express has obtained a copy of an eight-page list of resolutions adopted by the Chief Justices at that conference from September 13-15 and sent to the Government.

Story continues below this ad

While many of the resolutions are meant to effect ‘‘improvement in conditions of service,’’—for example, a raise in basic salary, a higher retirement age—the one pertaining to income tax exemption for their salaries has raised eyebrows because of doubts about its propriety.

When asked for a reaction, senior advocate Fali Nariman said: ‘‘I refuse to believe that any High Court judge, much less a Supreme Court judge, would even venture a suggestion that he or she should be exempted from income tax.’’

The no-tax-for-judges proposal was rejected by the Supreme Court itself in 1999 when a High Court judge had petitioned that judges’ income be exempted from tax. His reasoning: since judges don’t have an employer, they cannot be said to have salaries at all.

But a Constitution bench ruled that it was not possible to hold that ‘‘what judges receive are not salaries or that such salaries are not taxable as income under the head of salary.’’ The five-judge bench which delivered this judgment was headed by Justice S P Bharucha and, ironically, included Justice Kirpal, the very judge who later chaired the conference where the no-tax proposal was endorsed.

Story continues below this ad

The issue was re-opened after the September conference. As per its resolution, a panel comprising Justices Bhawani Singh, Ravi S Dhavan and A R Lakshmanan, chief justices of MP, Bihar and AP, will ‘‘go into this aspect and submit a report.’’

Signficantly, the proposal that a judge’s ‘‘salary be made tax-free’’ is the only item on which the conference felt the need to take recourse to a committee. But that was by no means the only resolution seeking income tax exemption. The Chief Justices have also urged the Centre to amend the Income Tax Act and other relevant laws ‘‘specifically providing’’ for exemption of:

• Value of gardeners, watchmen, sweepers and Class IV employees provided at the residence of judges.
• Electricity and water charges reimbursement.
• Medical reimbursement.
• Transfer allowance given to a judge.

Not surprisingly, economist Bibek Debroy disapproves of these resolutions. ‘‘In general, I-T exemptions are bad because they are discretionary. The entire tenor of economic reforms has been to do away with such exemptions,’’ said Debroy.

Story continues below this ad

Incidentally, this is not the first time judges considered the idea of their salaries being exempted from IT. They did this once about 20 years ago when the proposal was discussed—and promptly dismissed by all the judges of the SC at a full court meeting.

The then Chief Justice of India Y V Chandrachud, when contacted by The Sunday Express, said: ‘‘All my colleagues and I were unanimously of the view that we should not ask for any exemption from taxation on our salaries.’’