Many feel that the tribunals and courts are pro assessee as majority of the decisions pronounced are against the revenue. But there is another side of the coin, which they fail to see. Majority of these departmental appeals should not have been made in the first place and thus they fail to hold ground in the courts. Unnecessary litigations have become a part and parcel of the government machinery.
The Bombay high court, in its order dated 21.06.2010, in the case of CCE Vs Techno Economic Services Pvt. Ltd. (CEO 2010 Bom 9) had desired that CBEC consider issuing circular, on the lines of circulars issued by the CBDT, so as to reduce litigations arising out of indirect tax litigations.
Accordingly, the policy lays down, inter alia, that in revenue matters, appeal shall not be filed if the amount involved is not very high and is less than the monetary limit fixed by the revenue authorities. It also states that appeals shall not be filed if the matter is covered by a series of judgments of the tribunal and the high courts which have held the field and have not been challenged in the Supreme Court. The Policy also lays down that no appeal shall be filed where the assessee has acted in accordance with the long standing practice and also merely because of change of opinion on the part of the jurisdictional officers.
Justice for people is blocked by none other than by the government department. To come to the help of the assessee as well as the courts, the Centre has formulated a National Litigation Policy to reduce the cases pending in various courts in India under the National Legal Mission to reduce average pendency time from 15 years to 3 years. Government should become an "efficient" and "responsible" litigant.
The Board has decided, vide instruction issued from File No.390/Misc./163/2010-JC New Delhi October 20, 2010 that appeals in the tribunal shall not be filed where the duty involved or the total revenue including fine and penalty is Rs1 Lakh and below. Similarly, in the case of high courts, appeals should not be filed in cases where the duty involved or total revenue including fine or penalty is Rs2 lakhs and below.
While deciding the thresholds mentioned above, the duty involved shall be the decisive element. For example, in a case involving duty of Rs1 lakh with mandatory penalty of Rs1 lakh besides any other penalty imposed under the relevant provisions of law, no appeal shall henceforth be filed in the tribunal as the duty involved is within the limit of Rs1 lakh.
Further, it has been made clear that, wherever it is decided not to file appeal in pursuance of these instructions, which are aimed solely at reducing government litigation, such cases shall not have any precedent value. In such cases, commissioners should specifically record that "even though the decision is not acceptable, appeal is not being filed as the amount involved is less than the monetary limit prescribed by the board."
It has been prescribed that in respect of an order where it is decided not to file appeal in pursuance of these instructions, a database needs to be created so that all the commissionerates are made aware of the orders that are accepted solely on the ground that the revenue involved is below the threshold prescribed herein and which should not be taken as having precedent value. The government should ensure that genuine cases are resolved at pre-litigation stage itself at their level so that poor and helpless citizens may not be compelled to unnecessarily knock the door of courts.