As the government struggles to realise a massive amount of revenue stuck in litigation, the Central Board of Excise and Customs (CBEC) has instructed its officials and field formations to proactively challenge pending or stayed cases related to the goods and services tax (GST) in high courts by way of filing special leave petitions (SLPs) in the apex court. The Supreme Court allows SLPs only if there is a substantial question of law of general or public importance involved, or if there is manifest injustice resulting from an impugned order or judgment. “Principally, all orders, whether interim or final, are appealable. Whether the levy of GST has been questioned or stayed, irrespective of the fact that matter is still pending before the High Court, the same needs to be challenged through SLPs before SC,” the board said while instructing its officials.
Officials said that the idea was to ensure that there was finality on aspects of GST without waiting for pending cases to be decided. In its communication, the board said : “As GST is at its inception stage, it is important to defend the issues effectively to defend the interest of the government.” It referred to high courts’ decision in certain GST-related cases where the department was asked to not take coercive steps to recover taxes pending the outcome of the petition. Further, the department asked the officials to keep a close watch on GST-related petitions filed in the high court in their jurisdiction. The officials are also required to send a proposal for filing SLP to the legal cell of the board for vetting.
However, officials said that monitoring GST-related cases would require resources that are currently engaged in resolving legacy issues. To ensure that manpower is available for GST cases, the board, in a separate communication, asked the officials to decide all pending cases by December. The board will review the progress on October 5. As FE reported earlier, CBEC is engaged in over 3,000 pending cases with an accumulated revenue of over Rs S 1.5 lakh crore. Each of these cases is worth Rs 10 crore or more in terms of revenue involved. The board has also tried to withdraw smaller cases earlier this year. Last year, the government had said CBEC identified 7,312 cases fit for withdrawal from courts and tribunals. Field formations had filed withdrawal applications in 980 and 2,174 cases in high courts and tribunal. The issue of revenue blockage due to litigation is worse for the direct taxes department. According to official data, as of April 1, a total of 2.9 lakh cases were pending before the department’s first appellate authority — the Commissioner of Income Tax (CIT) (appeals) — involving `6.11 lakh crore. Of this, demands amounting to `1.18 lakh crore had been stayed by the Income the Tax Appellate Tribunal or other courts.