By Dr. K. Shivaram
Ajay R. Singh
Advocates
New Page 1
2 Appeal by Department —
Measures to reduce litigation.
[Commr. of Central Excise
v. Techno Economic Services P. Ltd., (2010) 255 ELT 526 (Bom.)]
While dismissing an appeal
filed by the Revenue wherein the amount in dispute was Rs.1,21,219 the Court
noted that number of appeals are being filed before the Court; wherein the
customs duty and/or central excise duty involved was negligible. It was noticed
that most of the times the duty impact ranges between
`2 to 3 lakh; wherein,
normally, senior advocates appear on behalf of the Revenue assisted by two
junior advocates. In spite of engaging multiple advocates, adjournments were
sought. The matters were allowed to remain pending in the Court for a
substantially long period of time. With the result, they come up for hearing on
more than two or three occasions. Adjournments were always taken and granted by
the Court considering the substantial cause shown for the adjournment. All this
results in payment of heavy professional charges to the advocates appearing for
the Department. Sometimes the expenses incurred by the Revenue were
disproportionate to the stakes involved in the appeal and/or petition filed by
the Department.
In the aforesaid scenario,
the Court took the judicial notice of the fact that the Centre and the States
had acquired the ‘government is the largest litigant’ tag, accounting for 70% of
the 3 crore cases — over 2.1 crore pending in various Courts.
The Court, observed that the
Central Government had formulated a National Litigation Policy (NLP) to shed the
tag ‘Largest Litigant’. Thus, keeping in view the policy of the Central
Government, it invited attention of the Chairman of the Central Board of Excise
and Revenue (‘the Board’) to consider the necessity of taking policy decision
not to file cases; wherein the duty/tax impact was negligible. The similar
policy was already in vogue so far as the Income-tax Department was concerned.
The Central Board of Direct Taxes vide its Circular dated 27th March, 2000
followed by other Circulars dated 24th October, 2005 and 15th May, 2008 had
taken a policy decision not to file appeals or references wherein the tax effect
is less than the amount prescribed in the instructions issued from time to time,
so as to reduce litigation before the High Courts and the Supreme Court. The
said policy decision taken by the CBDT had reduced the volume of litigation,
with the result, their officers were in a position to concentrate on the cases
involving heavy stakes.
It has, therefore, become
necessary for the Board to impress upon the Departmental heads not to go for
appeals and litigation wherein tax or duty impact was not substantial, otherwise
it results in harassment to the assessees and creates unnecessary burden on the
infrastructure of the Revenue Department. The ‘let the Court decide’ attitude
needs to be given go-bye.
The Chairman of the Central
Board of Excise and Revenue shall consider the necessity of issuing a Circular,
on the lines of the Circulars issued by the CBDT, so as to reduce litigations
arising out of indirect tax legislations.
