MAY 13, 2024

By M G Kodandaram, IRS, Assistant Director (Retd), ADVOCATE and CONSULTANT

Need For Call Book

IN the context of GST, despite active measures such as self-assessment and self-penal systems aimed at promoting voluntary compliance based on trust, the number of litigated cases continue to increase steadily. The influx of writ petitions flooding the State High Courts has reached unprecedented levels and at present such cases are not being managed in an effective manner by the Authorities concerned. Furthermore, the delayed establishment of the GST Appellate Tribunal has compounded the challenges faced by the department in management of the growing backlog of pending cases. Currently, there is no prescribed procedure in place for the proper management of these undecided cases. Addressing this issue promptly is imperative before it spirals out of control. The author believes that uniform digital implementation of the 'Call Book' concept within the GST framework is both critical and urgent.

The Call Book procedure, which was formerly utilised by tax systems such as Excise, Service Tax, and VAT, aimed to streamline the resolution of tax disputes, guaranteeing timely and precise outcomes. The core of the ‘Call Book mechanism'lies in its organized method of monitoring cases that cannot be immediately resolved due to various factors like intricate legal complexities and ongoing appeals. According to the Manual of Office Procedure (OPM) issued by the Department of Administrative Reforms and Public Grievances (DARPG), departments maintain a Call Book for cases that had reached a stage where immediate action for expediting resolution was not feasible for at least six months. The criteria for inclusion in the Call Book encompass cases that cannot be promptly adjudicated due to specific reasons, as outlined in the Central Board of Excise and Customs (CBEC now CBIC) Circular No. 162/73/95-CX.3 dated 14-12-1995. These reasons include cases under appeal, those facing stay from higher courts, contested audit objections, and cases specifically designated by the Board as pending status.

Although the Call Book procedure was well-established in previous tax regimes, it is currently not mandated in the GST realm. There is a significant scope and necessity to formalise the Call Book procedure within the GST framework as deliberations in further part of this article indicate. This would create a structured mechanism for handling complex cases, ensuring consistency, transparency, and effectiveness in resolving GST disputes. Integrating Call Book procedures in the GST era would be a significant step toward enhancing the overall efficiency and credibility of the tax adjudication system.

The introduction of this concept should include notifying registered persons of cases placed in the Call Book category, as emphasized by the Apex court in the case of Union of India & Ors. Vs ATA Freight Line (I) Pvt. Ltd. (Supreme Court of India) Special Leave Petition (Civil) Diary No(S). 828/2023 Dated 10/02/2023 - 2023-TIOL-113-SC-ST. Therefore, the author believes that this should be implemented as part of a GST Council decision to establish a uniform digital system.The conventional manual method had many weaknesses, as reported in many C&AG reports, which could be overcome by introduction of central digital platform with uniform instructions nationwide.

Scope for Bringing Call Book System

The potential for implementing the Call Book procedure within the GST framework can be assessed by examining the provisions of the CGST Act/ SGST Acts. Sections 73(10) and 74(10) of the Act outline specific timeframes for adjudicating SCNs issued under these sections. Section 75(1) of the Act deals with situations where notice service or order issuance is stayed by a court or Appellate Tribunal, requiring the exclusion of the stay period when calculating the time specified in Sections 73(10) or 74(10). Furthermore, Section 75(11) of the CGST Act addresses cases where a decision by Appellate Authorities, Tribunal, or High Court adversely affects revenue in other proceedings, with pending appeals against such decisions. Here, certain stages of decision-making time are excluded from the time limit calculation under Sections 73(10) or 74(10), provided proceedings began by issue of a SCN. However, ambiguity exists regarding the interpretation of terms like "identical issue" or "similar issue" concerning SCN content and whether "other proceedings" refer to the same taxpayer or any taxpayer, which also needs to be clarified.

The previous laws like the Central Excise Act and the Finance Act lacked fixed time limits for adjudication. As against this, the GST Act is more stringent as it has shifted the time limit to the date of issue of adjudication order. This legal foundation, with defined timeframes and consequences for non-compliance, creates an environment necessary to introduce the Call Book procedure within the GST framework.

Avoid Unilateral Policy

In this direction, the Kerala State GST recently took a unilateral step by issuing Circular No. 13/2023 dated 22-06-2023 concerning the procedures to be followed in maintenance of Call Book. This circular mandate adjudicating authorities to maintain the Call Book, ensuring regular updates and accessibility for verification by higher-ranking officers. However, this directive applies to Kerala's state GST Authorities only. In an era where state and central authorities share GST administrative functions through cross-empowerment with an aim to enable a unified GST nationwide, such isolated efforts hinder this goal. Wouldn't it be prudent for the GST council to handle such tasks, ensuring a uniform Call Book policy applicable across India?

This approach mirrors the implementation of the Document Identification Number (DIN) system by CBIC, as outlined in Circular No. 122/41/2019-GST and Circular No. 128/47/2019-GST dated 05.11.2019 and 23.12.2019 respectively,[Please read DIN tagged communications in Tax regime - NOVEMBER 18, 2019; GST Administration - Need of Comprehensive Approach AUGUST 17, 2022; Use DIN to Reform GST Administration AUGUST 10, 2022 by the author ] in respect of central administrations only. The DIN system is advocated for enhancing transparency in departmental communications with registered individuals, a principle endorsed by the Supreme Court in the case of PRADEEP GOYAL Vs UNION OF INDIA & ORS in WRIT PETITION (CIVIL) NO. 320 OF 2022 Dated 18.07.2022 - 2022-TIOL-66-SC-GST. In Paragraph 7 of its judgment, the Honorable court stated, " Given the implementation of the GST and as per Article 279A of the Constitution of India, the GST Council is authorized to make recommendations to the States on GST-related matters. The GST Council can also issue advisories to the respective States for the implementation of the DIN system, which is in the broader public interest and could enhance transparency and accountability in indirect tax administration. Therefore, we resolve the present writ petition by instructing the Union of India / GST Council to issue advisory / instructions / recommendations to the respective States regarding the adoption of electronic (digital) DIN generation in indirect tax administration. " However, despite this directive, the DIN system remains unimplemented in several states, indicating the potential for a recurrence of similar situations concerning issues/policies of all-India significance. Continued unilateral policy decisions without comprehensive involvement of all relevant authorities and stakeholders perpetuate such discrepancies, impeding progress towards a simplified unified GST framework.

Benefits of Digital Common Call Book

Introducing the Digital Common Call Book system in GST offers numerous benefits. It allows tax authorities to prioritize active cases, expediting the resolution process. This system also optimises resource allocation by focusing efforts on cases that can be resolved quickly, while temporarily setting aside more complex cases. Furthermore, the Call Book ensures compliance with legal requirements, avoiding procedural lapses and enhancing dispute resolution credibility. Categorizing cases based on their stage and complexity reduces the backlog of pending litigations, leading to a more efficient tax adjudication system. A digitally managed Call Book promotes transparency and accountability by providing a clear record of case statuses and reasons for temporary suspension. This will also help in overcoming many lapses reported in the earlier regimes.

Given the principles of uniform law and common procedures for registered taxable persons in the GST realm, it appears equitable to adopt a uniform backend approach in the administration to benefit all stakeholders. States and the central government ought to be instructed to bring / raise issues with nationwide ramifications to the attention of the council, to prevent unilateral implementation without the council's recommendations, that leads to fragmented administration of GST Laws. The unified approach will empower the council to promote consistency in backend engagements by all authorities in a transparent manner.

The GST Council should consider discussing a nationwide, integrated digitally enabled call back case management system in its future meetings to ensure the welfare of all stakeholders.

[The views expressed are strictly personal.]