Taking note of the “tardy progress” of withdrawal of departmental appeals following the government’s decision in July to hike the threshold limit for tax departments to file appeals in tribunals and courts, the Central Board of Indirect Taxes and Customs (CBIC) has directed its officials to complete the process of filing/withdrawal of appeals in tribunals and courts by the end of this month. As on October 15, 2767 indirect tax cases remain to be withdrawn in CESTAT (Customs, Excise and Service Tax Appellate Tribunal), high courts and the Supreme Court, CBIC data showed.
“…the status of withdrawals as on October 15, 2018 was put up to the Chairman who has observed “progress is very tardy”. It has been directed that the entire activity (of filing or withdrawal of departmental appeals) be positively completed by October 30, 2018,” the judicial cell of CBIC has written to all principal chief commissioners and chief commissioners of the department.
As per the zone-wise data, total 703 cases have been withdrawn, out of which 277 cases have been withdrawn from high courts and 426 cases have been withdrawn from CESTAT. The CBIC had identified 3470 cases for filing/withdrawal below the monetary limit, out of which the cases for CESTAT were 1665, for high courts were 1284 and for Supreme Court were 521.Chennai has the highest number of pending cases remaining to be withdrawn at 340, followed by Ahmedabad at 300 and Bhopal at 244. Delhi has the lowest number of cases remaining to be withdrawn at 30, the data showed.
The officials have been directed to file a common miscellaneous application covering all identified cases in the high courts and the CESTAT. The department has already prepared a list of cases “ripe for withdrawal” from the Supreme Court to ensure that the withdrawal takes place in a single move to save time, the missive said, adding that the same method should be adopted for high courts and CESTAT as well.
In July, the government had hiked the threshold for appeals filed by the tax department before the Income Tax Appellate Tribunal/Customs, Excise and Service Tax Appellate Tribunal (ITAT/CESTAT) to Rs 20 lakh from Rs 10 lakh earlier, for high courts to Rs 50 lakh from Rs 20 lakh and as for the Supreme Court to Rs 1 crore from Rs 25 lakh. At tribunal level, Central Board of Direct taxes (CBDT) files appeals in ITAT (Income Tax Appellate Tribunal) while the CBIC files appeals in CESTAT (Customs, Excise and Service Tax Appellate Tribunal).
Following the decision to hike the monetary limits for tax appeals, the CBIC was estimated to see a reduction of 18 per cent in litigation. At the tribunal level, the department was estimated to withdraw 16 per cent of the cases while 22 per cent matters in high courts and 21 per cent of the appeals in the Supreme Court were not be litigated any further.
The Economic Survey for 2017-18 had stated that even though the success rate of the tax department at all three levels of appeal — Appellate Tribunals, High Courts, and the Supreme Court — is under 30 per cent for both direct and indirect tax litigation, it remains “undeterred” and “persists in pursuing litigation at every level of the judicial hierarchy”, making it the largest litigant in India.