Concerned over instances of tax evasion by some industrialists to "deliberately" get into litigation,Finance Minister Pranab Mukherjee on Tuesday said there is an urgent need to plug this loophole. He said these industrialists seek legal recourse deliberately so that they can pay the dues out of the interest accumulated over 10-15 years that cases take to settle. "I have seen that some of the industrialists . would go to court . obtain the stay order and,in between,the interest of the accumulated money will add (up) . From there they will pay their taxes. It has happened in this country. For 10,15 years the cases are going on," Mukherjee said in the Rajya Sabha. Pointing out that all legal aspects have to be looked into to plug the loopholes,he said sometimes legislative measures have to be taken with retrospective effect. "I know,in taxation,retrospective measures are totally unacceptable,Leader of the Opposition will never agree with me that in taxation measures we should have retrospective measures," he said in reply to the debate on the Finance Bill. He said,however,sometimes these steps are to be taken with retrospective effect to retain the interest of the tax department. "Otherwise,instead of collecting taxes we shall have to refund the amount which is due from them. Therefore,these are the legal aspects which we shall have to look into," Mukherjee said. Last week,Minister of State for Finance S S Palanimanickam had told the Lok Sabha that huge pile up of tax cases pending in courts and various tribunals is holding back Rs 64,244 crore in both direct and indirect taxes. There are 68,382 direct tax related cases pending in income tax appellate tribunals (29,505 cases),High Courts (34,467 cases) and Supreme Court (4,410) holding back over Rs 18,900 as on September 30,2009. In indirect tax,there are about 63,400 cases pending in Customs,Excise & Service Tax Appellate Tribunals (46,930 cases),High Courts (14,077) and Supreme Court (2,391) holding back over Rs 45,300 crore as on December 31,2009.
