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Timely Filing Of Appeals In Tax Matters Needed; Supreme Court Calls For E-System To Track Revenue Litigation
Mehal Jain
20 Aug 2021 11:30 AM IST
Lamenting the gross delay of over '500 or 600 days' in filing appeals by the Union even in meritorious tax cases, the Supreme Court on Thursday called for a system to track the revenue litigation.The Court urged the Centre to adopt a system akin to the 'Case Information System' like the Judiciary for monitoring, at all levels, revenue proceedings and litigation in revenue matters to which...
Lamenting the gross delay of over '500 or 600 days' in filing appeals by the Union even in meritorious tax cases, the Supreme Court on Thursday called for a system to track the revenue litigation.
The Court urged the Centre to adopt a system akin to the 'Case Information System' like the Judiciary for monitoring, at all levels, revenue proceedings and litigation in revenue matters to which Union of India is party.
The bench of Justices D. Y. Chandrachud and M. R. Shah had previously noted that repeatedly, the attention of the court has been drawn to the fact that appeals in revenue matters are being filed with gross delay, accompanied with an application for condonation of delay. When the court refuses to entertain the plea, the officers then justify their action saying that though they had moved the court, the Supreme Court did not condone the delay and rejected the appeal.
"Right now, they say that there is no methodology to know if appeals are being filed on time. Why can you not have a CIS like system like the Judiciary. Then the government can easily track, monitor and retrieve data, the government can have its own data grid on the revenue side. It is an ambitious project. You can benefit from the Judiciary's experience of trial-and-error over 15 years...", directed Justice Chandrachud to SG Tushar Mehta.
"Now, with GST, the bifurcation under List I, List II and List III has gone. You can lay down a robust system and bring all proceedings of adjudication in that net so that the government can monitor the same. You have already done it as regards filing of returns, assessment etc, you just need to take it further", continued the judge.
"It will enable a more business-friendly adjudicatory framework. It will be the government's message to businesses that it only wants tax dues to be paid and it is not interested in harassing assessees through revenue officials. That is the kind of climate we want!", expressed Justice Chandrachud.
"There are 500, 600, 700 days' delay in even meritorious matters!", Justice Shah told the SG.
"We look at the State which is involved! We are also citizens and we are shocked as citizens that there is a 1200 days' delay in this matter?!", added Justice Chandrachud.
The SG conceded that at times, the delay is deliberate also and that is why, at a recent meeting, it has been his suggestion that the responsibility of such delay be fixed on the concerned officer, that if the concerned officer fails to take the requisite action within the specified time, he face the consequences.
"We had such a case only recently where the state of Jharkhand was involved, where the order was served on the assessee only after 5 years. The assessee simply said that the statute does not require him to maintain the records after 5 years and so he has destroyed the same and we had to dismiss the SLP. But the officers were apparently in league with the assessee!", remarked Justice Chandrachud.
At the previous hearing on August 6, the bench had warned the Centre of contempt on account of "by the failure of the Union Government to come forward with any concrete response".
"These proceedings have been consistently adjourned at the request of the Union of India after the Court issued certain preliminary directions on 15 February 2021 (as regards the proposal for adopting a technology based solution for monitoring revenue proceedings and litigation at all levels)...The patience of this Court is now wearing thin...Hence, the delay in responding to the Court is beyond comprehension. We find the recalcitrance on the part of the Ministry of Finance in the Department of Revenue unacceptable. However, before we take the next step of issuing a contempt notice, we give a last and final opportunity to the Union Government to sort out the issue and come before this Court with a concrete plan of action, beyond circulars. We clarify that if, on the next date, no such proposal is forthcoming, the Court will be constrained to take recourse to the coercive arm of the law against the officers involved", the bench had said.
On Thursday, the bench noted that in pursuance of the Court's nudge, the National Informatics Centre is collaborating with the Ministry of Finance to bring the litigation data on the LIMBS platform (Legal Information Management and Briefing System).
"At the last hearing, we got exasperated because this endeavour is only with a view to protect the interest of revenue and we expect the government to be proactive. Now that once you have taken the step to be on this E-platform, there will be budgetary allocation towards it etc and you can further build on that...Have a small committee of the people in the know which can meet periodically and oversee the progress. We cannot keep doing this...", said Justice Chandrachud.
The SG informed that at the meeting held recently, he himself happened to be present along with the DG, NIC, the Revenue secretary and the Law secretary and that the DG, NIC gave suggestions which were not in the contemplation of the government and which were found acceptable.
"This committee, to oversee the integration of litigation on the revenue side, if not already constituted, will be set up by Monday", he told the bench.
Case Title: C.C.E and S.T. Surat I v. Bilfinder Neo Structo Construction Ltd.
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