In a ‘litigation management’ meeting last month, the revenue secretary is believed to have asked the CBEC to pay special attention to pending cases involving over Rs 10 crore.
With legal cases piling up and blocking revenue flow, the Central Board of Excise and Customs (CBEC) has urged its field formations across the country to expedite resolution of disputes that are worth over Rs 10 crore. There are over 3,000 such pending cases with an accumulated revenue demand of Rs 1.56 lakh crore. In a ‘litigation management’ meeting last month, the revenue secretary is believed to have asked the CBEC to pay special attention to pending cases involving over Rs 10 crore. The board, in turn, instructed its officials to make concerted efforts towards liquidation of these pending cases by way of filing miscellaneous applications for early hearing or vacation of stay for early disposal, a government official said.
According to the data available with the department as on June 30, there are 3,047 cases involving revenue of Rs 10 crore or more pending in either the Supreme Court, high courts or the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). Of these, 31 cases (customs-10, service tax-3 and central excise-18) have been pending for over 10 years and are a cause for worry for the department, the official said. Additionally, the data shows there are 339 cases stuck in litigation for 5-10 years, 539 cases for 3-5 years and another 1,154 cases have been in dispute for 1-3 years. The cases under litigation have been a major issue for both the direct and indirect taxes boards. Over the past two years, several attempts have been made to reduce cases under litigation by focusing on bigger cases while withdrawing smaller ones.
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 CESTAT, respectively. Out of this, HCs allowed withdrawal in 250 cases and CESTAT in 202 cases. After the government raised the revenue threshold for filing cases in tribunals and courts, field formations identified 2,051 and 5,261 cases which are fit for withdrawal from high courts and CESTAT, respectively. The board had raised the threshold limit for legal disputes to `10 lakh for tribunals and Rs 15 lakh for high courts, respectively. Also, the CBEC has asked officers to withdraw all cases in high courts and tribunals where there was a precedent of the Supreme Court decision and against which no review is contemplated by the department.
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—Commissioner of Income Tax (CIT) (appeals) — involving Rs 6.11 lakh crore. Out of this, demands amounting to Rs 1.18 lakh crore had been stayed by the Income the Tax Appellate Tribunal (ITAT) or other courts.