GS4 PYQ (Mains Answer Writing): Ethics Case Study - 5 | UPSC Mains: Ethics, Integrity & Aptitude PDF Download

Dr X is a leading medical practitioner in a city. He has set up a charitable trust through which he plans to establish a super-speciality hospital in the city to cater to the medical needs of all sections of the society. Incidentally, that part of the State had been neglected over the years. The proposed hospital would be a boon for the region. You are heading the tax investigation agency of that region. During an inspection of the doctor’s clinic, your officers have found out some major irregularities. A few of them are substantial which had resulted in considerable withholding of tax that should be paid by him now. The doctor is cooperative. He undertakes to pay the tax immediately.
However, there are certain other deficiencies in his tax compliance which are purely technical in nature. If these technical defaults are pursued by the agency, considerable time and energy of the doctor will be diverted to issues which are not so serious, urgent or even helpful to the tax collection process. Further, in all probability, it will hamper the prospects of the hospital coming up.
There are two options before you:
1. Taking a broader view, ensure substantial tax compliance and ignore defaults that are merely technical in nature.
2. Pursue the matter strictly and proceed on all fronts, whether substantial or merely technical. As the head of the tax agency, which course of action will you opt and why? (UPSC MAINS GS4)

• I believe as a civil servant that law does not absolve a law breaking citizen because he has done or he intends to do good work. Law should take its own course for non-compliance and government and society should cooperate a citizen who intends to do good work separately. Law sees these two acts as mutually exclusive. 
• However, there are discretions available to a judge in court and a civil servant in administration to be lenient for good intentions and good works so as to give a fair chance to goodness and overall welfare of the people. 
• Having said this, I will certainly exercise option number 1  because it leads to substantial tax compliance while the points of default by the doctor are mainly of technical nature and do not help much in tax compliance. 
  • Secondly, knowing about the good intention of the doctor to establish a super speciality hospital in the city for all the sections, especially the poor and needy  people, I would take a broad view and be lenient on technical defaults which are non-consequential either for tax compliance or for revenue to exchequer. This option would optimise tax collection on one hand and enhance public welfare if a super specialty hospital is established in the city on the other. 
  • Had I been sure of substantial gains on tax compliance or setting a bad precedent by being lenient for technical defaults of grave nature, I would have exercised the second option of being very strict and pursuing the inspection report and case wholeheartedly to its legal and logical end. But as explained in the above case, the defaults are only of technical nature and pursuing them will not enhance tax compliance but sap out the time and energy of the doctor who intends to set up a super speciality hospital for all the sections. 
  • Nevertheless, a broad and lenient view should be taken with care and caution with regard to nondiscrimination and equality before law on one hand and promoting Good Samaritan acts on the other. 
  • In fact generally these two goals are seen separately and the second, ie., good acts, do not absolve a citizen from a crime or non-compliance of law. 
• The principles of jurisprudence, however, provide for leniency where the culprit has good intentions and track record of social and community work including philanthropy as seen in US court’s judgement about iconic Rajat Gupta’s failures on insider trading. This principle may very well be applied in good governance with great discretion and caution in the larger interest.