The draft direct taxes code has taken out of cold storage the finance ministry?s six-year-old plan of setting up the National Tax Tribunal (NTT), which would hear appeals against orders passed by the Income Tax Appellate Tribunal. At present, such appeals are referred to the high courts.
Setting up the National Tax Tribunal will help the department of revenue deal with the large number of pending tax cases. Cases involving Rs 47,152 crore of direct taxes are still pending, while another Rs 16,957.78 crore worth of indirect taxes are under dispute, as per the Budget document for 2009-10.
The income tax department estimates that over 50,000 applications and petitions are pending before various Income Tax Appellate Tribunals throughout the country.
Section 192 of the draft direct taxes code, released on Wednesday, provides for an appeal to the NTT against decisions by the ITAT while Section 193 said orders of the NTT can be appealed against in the Supreme Court.
?There is enough time to set up the tribunal as the direct taxes code is expected to come into force only from April 1, 2011,? a finance ministry official said.
It was in 2003 that Jaswant Singh finance minister in the National Democratic Alliance regime first announced setting up the National Tax Tribunal. Subsequently, in 2005 the
Parliament had passed the National Tax Tribunal Bill, 2005. The implementation of the Act was, however, stalled due to a number of petitions against it in the Supreme Court.
Finally, in March 2007, the Parliament passed the National Tax Tribunal (Amendment) Bill that reduced the qualifying period of member of ITAT and of the Customs, Excise and Service Tax Appellate Tribunal for appointment as member of the NTT from seven years to five years.
Under the National Tax Tribunal Act, 2005, the Centre can set up a 25 Bench tribunal comprising 49 members and a chairman who would be a former chief justice of a high court or a former Supreme Court judge.
Fifteen benches were expected to hear appeals against direct taxes while 10 would be dedicated to cases on indirect taxes.
Appeals against NTT orders would lie with the Supreme Court. Unlike high courts, the NTT however would not have writ jurisdiction.