IT, GST officers treating wealth creators like thieves: Supreme Court Justice Manmohan

Supreme Court Justice Manmohan on Friday issued a sharp warning that unless India fundamentally reimagines its legal and regulatory systems, it will fall short of its ambitious 2047 goal of becoming a developed economy.

“How does an income tax officer or a GST officer treat you when you are generating wealth for the country? He treats you as a thief. His mindset is that something must be improper if you are generating wealth. That whole mindset, that ecosystem has to change,” he observed.

He was speaking at Nyaya Nirmaan 2025, a dialogue hosted by the General Counsels’ Association of India (GCAI) on the theme Reimagining India’s Legal Foundations for Viksit Bharat @ 2047. The event brought together ministers, judges, policymakers and industry leaders for a day-long conversation on shaping India’s legal blueprint for the future.

While acknowledging that reforms such as faceless tax assessments and the use of artificial intelligence in GST compliance were important, Justice Manmohan insisted that India could not continue with voluminous statutes drafted for a bygone age.

“You can’t have an Income Tax Act running into 500 pages with one provision stretching across five pages and circulars cutting across the law itself. Only a genius can understand it. A layperson cannot. If you want to be a futuristic economy, you need to reimagine the system."

He pointed out that India’s laws still largely addressed a brick-and-mortar world, even though the economy was already digital. He cited disputes involving standard essential patents, where Indian courts were asked to shape outcomes for global settlements without legislative guidance.

“You are asking judges to reimagine without tools. New laws on damages, data sovereignty, digital rights and climate justice are urgent,” he said.

On mediation, Justice Manmohan said that nearly 90% of matrimonial disputes with a criminal colour (498A) can be settled, and that big partition suits often find durable solutions only through mediation.

“In one matter that kept bouncing between courts, I said it reminds me of a James Bond film - neither the hero dies nor the villain dies; there are only sequels,” he quipped.

The barrier, he said, is mistrust within government, the “biggest litigant". He added that honest officers fear inquiries if they settle tax/GST disputes, so the State rarely uses mediation even when it should.

He contrasted India’s rigid procedures with the IRS experience he witnessed in the US, where a taxpayer answered queries on the phone and closed the issue without a show-cause notice.

“Can you imagine that here?” he asked, arguing that a truly Viksit Bharat would allow routine disputes, land or tax to be resolved quickly, even remotely.

“The law, the system, everything needs a transformation. It doesn’t need to be reformed; it needs to be reimagined,” he said.

The goal for 2047, he concluded, is a nation “where laws are just, not just legal; courts are accessible, not intimidating; governance is transparent, not transactional."

In his address, Justice Pankaj Mithal of the Supreme Court was critical of what happens in Parliament.

“Bills are passed without discussion, without debate. Every clause and every comma must be examined. Otherwise, no good law will come for the country."

He added context that many bills are drafted in offices, tabled and then passed without real deliberation. He said,

"But you all know how the law is made. Legislation is drafted in the office, and it comes to Parliament. There is no discussion on it, there is no debate on it.If we make the law in this way, then no good law will be made for the country. Every point of the law, every point of the bill, should have a good debate. It should be on every sentence. It should be on every comma. Otherwise, that law should not be passed."

On judicial appointments, he clarified the constitutional position and the origin of the present system:

“In the Constitution, there is no system of Collegium. But with the judgment of 1994, there is a system of Collegium. It came with a good intention. It was a very good action. But if there is something lacking in this, then it is also very important to change it.”