At a time when the government is striving to widen tax net and move towards faster resolution of tax disputes, a Parliamentary panel has flagged concerns over “pendency for decades” even in cases involving a meagre amount of Rs 750. Slamming the excise and service departments for their lackadaisical attitude towards cases of prosecution and penalties, the outgoing Public Accounts Committee, whose term ended on April 30 also recommended specific time limits for withdrawal of pending cases of various denominations.
The panel recommended that cases, where the evasion of Central Excise Duty is less than Rs 5 lakh and is pending for more than 15 years, should be withdrawn. The Committee also desired that as the Prosecution Management Module (PMM), which is at the advance stage of finalisation and will be operationalised at all India level by June 30 this year coincides with the introduction of GST, the “PMM should be developed in a way that it is also ready for the GST regime and subsequent changes in the provisions.”
The report has been prepared by PAC’sub-committee on Direct and Indirect Taxes, headed by BJP MP Nishikant Dubey and was submitted to Lok Sabha Speaker Sumitra Mahajan on April 29 by outgoing PAC Chairman K V Thomas. Examining a CAG report of 2014 relating to the Ministry of Finance (Department of Revenue) and Central Board of Excise and Customs), the panel “strongly felt that lack of adequate monitoring on the part of the department resulted in increasing pendency” and pointed out “serious lacunae” in administration of prosecution and penalties by Central Board of Excise and Customs and delay on part of the department and non-following of timelines prescribed in various circulars of the ministry.
The panel noted with concern that eleven cases from five Commissionerates involving meagre amount of Rs 1.82 lakh were under prosecution in various courts for periods exceeding thirty years. “The Committee were of the view that cases involving meagre amounts as little as Rs 750 pending for decades is more of a harassment of the officials as well as the defendants. Also charges of lawyers and TA/DA claims of the officials often result in expending more than the amounts involved in the prosecution,” it said. In the report that deals with the action taken by the government on earlier report furnished by the panel, the finance ministry submitted that the implementation of PMM will enable the CBEC to facilitate effective monitoring of the prosecution process.