News Update

Budget 2021 - Can Nirmala Sitharaman afford to be FM on 'steroid'?Deduction u/s 80P(2)(a)(i) cannot be denied solely because co-op society lent money to members undertaking non-agricultural work & if society received interest at rates at par with commercial banks: HCInternational Customs Day - CBIC resolves to bolster sustainable supply chainPenalty cannot be survive if the accompanying additions have been quashed: HCIndia received FDI worth USD 58.4 billion during April to November, 2020Development of SEZ is business contemplated u/s 80IAB - Lease rental income generated by developer engaged in setting up of SEZ is profits & gains derived from business of developing SEZ & on which deduction u/s 80IAB is allowed: ITATAddition u/s 68 cannot be based solely on unserved notices when there is no other material to prove the accomodation entries: ITATAddition u/s 69A towards on-money receipts cannot be framed in company's hands when such receipt is already offered to tax in hands of it's director: ITATST - SVLDRS, 2019 - It would be too technical and narrow an approach to reject declaration on the ground that admitted duty liability is slightly lower than that declared in May 2018: HCCus - For the sake of considering case laws cited by appellant, Tribunal ought not to have remanded the matter but looked into the matter on its own merits: HCCX - RMG - When there is a report of Supdt . that export of goods had actually taken place, Tribunal, on its own, could have looked into the report instead of remitting entire matter to adjudicating authority: HCCX - Lime sludge generated in the process of manufacture of paper, is not subject to Excise duty: CESTATCus - Valuation - Declared prices cannot be reviewed without evidence showing that relation between importer & foreign supplier influenced the declared price or that there is any monetary flow back to supplier: CESTATCOVID-19 - China notifies protocol for anal swab test to cork spread of pathogenCabinet approves Rs 375 hike in Minimum Support Price of Copra for 2021 SeasonRajnath Singh & newly-appointed American counterpart Lloyd Austin resolve to work harder for strategic partnershipCOVID-19 - Mixico registers highest death count of 1743 + 1725 in UK + 890 in US + 594 in Russia + 467 in ItalyMHA issues fresh guidelines for Surveillance, Containment and Caution + States get more freedomFarmers’ protest - Cracks in panoply of Unions - Two of them back out from protest in wake of violenceED attaches seized cash of Rs 80 lakhs and immovable properties of former South Eastern Coalfields CMD booked by CBI in DA caseVaccine shot for stressed companiesCentre releases Rs 12,351Cr to 18 States for providing grants to rural local bodiesReinsurance business seeks direct tax assuranceIf you have two minutes with the Prime Minister...
 
Rising Din Against Litigation - Do something before India boards GST Bus

TIOL - COB( WEB) - 546
MARCH 23, 2017

By Shailendra Kumar, Founder Editor

HAS justice become a 'premium' service in India? Is access to justice available only to the moneyed? True, it is a highly debatable issue. But if one goes by the statements of noted jurists and Justices one may feel tempted to believe so. The latest to add to such a presumption is the sitting Supreme Court Judge Justice Dipak Misra who, at the recent All-India Meet of NALSA, observed that India needs to develop a culture of settling disputes through amicable means rather than lining up in courts. He also insisted on resorting to an alternate dispute resolution system. He urged the legal service authorities to promote such a culture in the country.

His sentiment was ably supported by the Law Minister who recently said that the government continues to be a compulsive litigant. Governments account for almost 46% of total number of 3.14 Crore cases pending in various courts. He wants Ministries and Departments to go on a 'Mission Mode' and launch a 'Special Drive' to clear pendency. He has written to the Union Home Minister and all the Chief Ministers to take transformative measures to reduce pendency of cases. He has urged Govt agencies to identify frivolous cases and take quick steps to withdraw them or dispose them speedily.

In this direction, the CBDT has taken some initiatives. In the first phase it has decided to grant waiver of dues of less than Rs 100 and it would benefit as many as 18 lakh taxpayers. In the second phase, the waiver of a sum up to Rs 5000 is going to be launched and another four lakh taxpayers are expected to be benefited. And mind it, such a huge number of cases are only about three years old pertaining to the FYs 2013-14, 14-15 and 15-16. In the bargain, the revenue kitty would be poorer only by Rs 600 Crore.

It is indeed a welcome step in the direction of minimising tax cases and de-choking adjudication machinery and then the Tribunal. This brings us to the large pendency of cases on the indirect tax front too. The Union Cabinet last Monday gave its nod to the four GST Bills. These Bills are going to be tabled in the House as Money Bills and the GST would be a reality very soon. There are fairly good transition provisions proposed in the GST Model Laws. But what about the pending cases before the Tribunal and higher courts. How wise it is to carry them into the new regime? When the GST Council is going to take a call on setting up the National GST Tribunal, should this Tribunal be a new avataar for the extant CESTAT?

Only yesterday while participating in the Budget debate in the Lok Sabha, the Union Finance Minister talked about the proposal to merge as many as 38 Tribunals into about a dozen Tribunals and have uniform service conditions and recruitment rules for the Tribunal cadre members. Such a merger is not going to be a simple exercise - that we all know. But what is more relevant from the economy perspective and the efficiency of the system is - how does the Govt propose to reduce the pendency of indirect taxes when the CESTAT Registry continues to admit fresh appeals in thousands! If we take into account new cases and the pendency at the Commissioner (Appeal) level, the number indeed becomes scary. Then comes the high pendency of VAT cases in the States. There are more than a dozen States which are no less litigious than the Union. Maharashtra alone has pending cases in the range of 90,000. Three more Benches of VAT Tribunal are being set up. When the economy is going to board a new bus of indirect taxes why should States fritter away their resources by setting up new Benches? Are creating more Benches real solutions to pending litigations?

What is really warranted is a conscious decision by the GST Council which has been laying down the base for the GST road in the country. Rather than each State taking its own call and the Centre finding difficulties in reducing pendency, the GST Council, a recommendatory body, should not shy away from making a serious recommendation to minimise litigation. Before boarding the GST bus, this is perhaps the last chance for our elite political class to make India a largely litigation-free economy. All the States and the Centre should be urged to first identify small demand cases and write them off within a month. Most tax departments are computerised and they do keep such records to work out revenue arrear figures to answer Parliament or Assembly questions. Once they are written off, the States and the Union need to be a little more generous and thrash out a common All-India Litigation Reduction Drive (a genre of Alternate Dispute Resolution system) and allow just 50% payment of demand with no interest and penalty up to Rs one lakh. This would bring down the number of pending cases significantly. The reduction would be sharper in case of VAT cases.

A separate and a little more ingenuous Scheme for further reducing pendency should be worked out where all demands above Rs one lakh may qualify to avail the concessions. Whatever may be the design of such a Scheme (it should be a Model framework), it should be a win-win scheme for the Exchequer as well as the taxpayers. Large companies should be talked into availing such a scheme. Since they have the necessary financial muscle they tend to drag the case a little longer even if such a scheme is put in place. When such a scheme is notified the GST Council should make an appeal to all the assessees to make it historic for the economy to start its GST journey on a clean slate. Only a manageable number of pendency should be left with the CESTAT and the VAT Tribunals so that all such pendencies are exhausted in two or three years. By the time the pendency diminishes, the GST-related litigation would start raising its head!

Let's hope the GST Council turns its eyes to this festering issue and does something concrete to help GST bus begin its journey with not much baggage of litigation and pendency of cases. A drive should also be launched by the Union and the States to quickly clear all pending Refund cases which often trigger protracted litigation. Since the Modi Govt favours a transformational reform, the GST indeed offers a good opportunity for the indirect tax regime in the country to shed a major part of less lucrative weight of litigation-sponsored revenue. Let's hope a good beginning is made when India is switching over to a new era of tax compliance and minimum litigation!

GST RO(W)AD AHEAD | Episode 8 | Panel Discussion | simply inTAXicating

GST RO(W)AD AHEAD | Episode 7 | Panel Discussion | simply inTAXicating

Also See : TIOL TUBE Videos on GST