Role of Adjudicating Authority under GST Act & Analytical Legal Positivism

Introduction

“Illegal, illogical, irrational, improper, unreasonable, disproportional, non-application of mind, excess or abuse of discretion, unjust”- perhaps these are the most common “phrases”, used against all Adjudicating Authorities (when adjudication order passed by them, particularly in case of imposing penalty ) irrespective of the tax law, under which they are working. No doubt, in some cases, these allegations are true. But setting aside those cases, if we analyze deeply, we will conclude that these allegations may not be well-founded and may be biased. We all know that an Adjudicating Authority has quasi-judicial functions. Basically, they are administrative authority with some functions that have some of the attributes of judicial functions, but not all. A quasi-judicial function stands mid-way between a judicial function and an administrative function. A quasi-judicial decision is nearer the administrative decision in terms of the discretionary element and nearer the judicial decision in terms of procedure and objectivity of its end-product. If one desires to investigate and evaluate the nature of power conferred, the frame work of the law conferring that power, the manner in which that power is expected to be exercised, the way the various provision of the statute is interpreted, then the essence of most of the allegations must be faded away.  If one desires to peep into the mind of the Adjudicating Authority, tries to understand the analytical process, going on in their mind, tries to understand the reasoning process, they have gone through to arrive to a certain conclusion, the allegations may turn out to be harsh. In this background and perspective, the concept of “Analytical Legal Positivism” may be invoked and considered to judge an act of Adjudicating Authority.

Analytical Legal Positivism

A. Among different schools of thoughts to study law from different angles, analytical school is one of the primary ones.

The founder of positivism is Jeremy Bentham. Austin owes much to Bentham and on many points; his prepositions are merely the ‘paraphrasing of Bentham’s Theory’. Analytical jurisprudence is the general name for the approach to Jurisprudence which concern itself mainly with classification of legal principles and rules and with analysis of the concepts and ideas used in legal system such as Person, Obligation, Right, Duty, Act, etc

Austin’s analytical approach effort is to gain a precise and in-depth understanding of Fundamental Concepts of legal reasoning. He chooses to exclude all external influence or even history and completely indulges in gaining access to first principles of law as it is, regardless of its “goodness” or “badness” or “moral worthiness”. This approach leads to “Law as it is” or “Positum” (and not the ideal law), also called “Positive Law”, advocated by Austin in his Theory of Legal Positivism.

B. Meaning of Positivism

The analytical school is called the positive school because the exponents of this school are concerned neither with the past nor with the future of law but with the law as it exists i.e. with law “as it is” (Positum). This school takes for granted the developed legal system and proceeds logically to analyze its basic concepts and to classify them in order to bring out their relation to one another. This concentration on the systematic analysis of legal concepts has given this school the name of analytical jurisprudence. The first concern of the jurists is to understand the structural nature of a legal system and for this purpose discussions of justice are not only irrelevant but also dangerously confusing. Such an approach to law is commonly termed analytical and such writers are often styled analytical positivists.

The term ‘positivism’ has five meanings:

1. Laws are commands.

2. The analysis of the legal concepts is distinct from the sociological and historical inquiries and critical evaluation.

3. Decisions can be deduced logically from pre-determined rules without recourse to social aims, policy or morality.

4. Moral judgments cannot be established or defended by rational arguments, evidence or proof.

5. Law, “as it is” (actually), has to be kept separate from the law that “ought to be”.

It is the fifth meaning is correctly associated with positivism.

C. Features of the Theory

Positivists do not deny that judges make law. As a matter of fact, a majority of them admit it. The influence of ethical considerations of judges and legislator as a judge is also acknowledged by them. What they maintain is that it is only incorporation in precedent, statute or custom that imparts a quality of law to a precept. Even an unjust proposition is embodied in precedent or statute, it will be law. Every proposition which passes through one or other accepted media is law irrespective of all other considerations. The positivists distinguish between formal analysis and historical and functional analysis.

The analytical school takes law as the command of the sovereign. It puts emphasis on legislation as the source of law. The whole system is based on its concept of law. Analytical jurisprudence does not create its premises: premises are made by the law itself. It is the function of analytical jurisprudence to accept these premises and to decompose them into final atomic elements in an organized juristic system. This school considers law as a closed system of pure facts from which all norms and values are excluded. The ideals do not bother the analytical jurist. He takes the law as a given matter created by the state, whose authority is absolute and unquestionable to him. He functions in an ecosystem of rules of legal logic, apparently complete and self-sustained. This school of thinkers considers the legal system watertight against all ideological intrusions and all problems are concluded in terms of legal logic.

Analysis of the function of Adjudicating Authority

How does an Adjudicating Authority perform his quasi-judicial functions? Rather the question should be “How should an Adjudicating Authority perform his quasi-judicial functions”? First he has to read the entire statute; then interprets the various provisions of the statute; records the findings of facts; then applies legal rules to them correctly and gives his decisions.  Even when the discretion is conferred on him, the same must be exercised judicially and in accordance with the provisions of statute, under which he is working. Adjudicating Authority, exercising quasi-judicial functions are not court and therefore they are not bound to follow the procedure prescribe for trial of actions in court nor are they bound by strict rules of evidence. They can, unlike courts, obtain all information material for the point under enquiry from all possible sources, without being fettered by rules and procedure which govern proceedings in court. The only obligation cast on him by the statute is to disclose all materials before him to the party against whom it is to be used and give him a fair opportunity to explain it. The requirement is that a person exercising quasi-judicial functions must base his decision on evidence. It must be based upon evidence which tends logically and legally to show the existence or non-existence of facts relevant to the issue to be determined. He must not spin a coin or consult an astrologer to arrive a certain decision. He must maintain the principles of natural justice.

So, the primary and prime requirement is to interpret the statute and to find out the intention of the legislature. The intention and meaning of the statute is to be sought in the words used in the statute itself. If they are plain and unambiguous, the words must be applied as they stand, even if there is strong suspicion that the result may not represent the real intention of the legislature.

By interpreting is meant the process by which one seeks to ascertain the intention and objective of legislation through the medium of the authoritative forms in which it is expressed. According to Salmond, there are two kinds of interpretation, grammatical and logical. In the case of grammatical interpretation, only the verbal expression of the statute is taken into consideration and an Adjudicating Authority does not go beyond the literal egis. In the case of logical interpretation, one is allowed to depart from the letter of the law and try to find out true intention of the legislature.

Here lies the difficulty; here lies the dilemma, here lies the constrains before an Adjudicating Authority.

For all practical purposes, it is the bounded duty of an Adjudicating Authority to content himself by accepting the grammatical interpretation as the true intention of the legislature. He must be satisfied himself that the legislature has said what it meant and meant what it said. He is not at all at liberty to add to or take away from or modify the letter of the law, simply because he feels that the true intention of the legislature has not been correctly expressed in the law itself.

There are three logical defects like “Ambiguity”, “Inconsistency” and “Incompleteness” by which grammatical interpretation may be affected. It should not be followed if the statute is apparently defective. But is an Adjudicating Authority allowed to go beyond the words of the statute and to take help from other sources?

If the words, taken grammatically, have a certain and unequivocal meaning, if they constitute a perfectly complete expression of one unequivocal meaning and of that only, then however absurd and pernicious the consequences may be, that meaning is to be followed. If however, the expression does not include the complete thought of the legislature, or if the words are equally susceptible of several meaning, Adjudicating Authority may seek in other parts of the same statute, or in other statutes, certainly in those in pari materia with this or that one of the several possible meanings which ought to be put upon the words. The duty of an Adjudicating Authority is to construe the law as it stands, not to make a new law, by substituting his own ideas, values and ethics. No Adjudicating Authority is competent to proceed upon the assumption that the legislature has made a mistake. If the words of a statute are clear, he must follow them even though they lead to a manifest absurdity. The Adjudicating Authority has nothing to do with the question whether the legislature has committed an absurdity. He bothers little with the reasonableness or unreasonableness of the provisions of the statue, except so far it may help him in interpreting what the legislature has said.

The Adjudicating Authority is not permitted to take into consideration even the report of select committee, surrounding circumstances and historical events that led to passing the statute, not even the parliamentary debate on the floor of the legislature over the Bill. The authority is only concerned with what the legislature actually said in the statute. No extrinsic aid is admissible in interpreting the statute.

Conclusion

It is the province of the legislature to determine what is best for the public goods and to provide for it by proper legislation; it is the province of the executive to implement the law. The domain is very limited before an Adjudicating Authority. He interprets the statute to ascertain the intention of the legislature; not to control that intention or to confine it within limits which he may deem reasonable or expedient. He has to disconnect law as a separate and independent field of study which is divorced from ethical, moral or social concerns.

An Adjudicating Authority has to formulate a systematic explanation of actual facts of law and purely law. His first job is to lay down a scheme following which analysis is to be performed. Then the laws are broken down to fragments, each of which is separately explained. By keeping them isolated from ethical concerns, morality, and justice, an accurate meaning of the law is established. He is concerned only with what the law “is” and not what the law “ought to be” and here lies the importance of “Analytical Legal Positivism”.