The Supreme Court of India has reprimanded the Income Tax Department for filing a frivolous Special Leave Petition (SLP) in a matter that had already been conclusively settled by the Court. The Bench criticised the Department for contributing to needless litigation, judicial burden and avoidable harassment of taxpayers.
Supreme Court Expresses Serious Concern
A Bench led by Justices BV Nagarathna and R. Mahadevan observed that the Department continues to file SLPs even on issues that the Court has repeatedly settled. Calling the practice "unnecessary and wasteful," the Court stressed that such filings clog the judicial system and divert resources away from cases that genuinely require attention.
The Court noted that once an issue has been decided and the law is settled, the Revenue should refrain from filing appeals under "different permutations" merely to keep litigation alive.
Repetitive Appeals Despite Settled Legal Position
The ruling has brought back focus on the long-standing issue of repetitive and mechanical appeals filed by revenue authorities, often without assessing merit or applicability. Despite the Central Board of Direct Taxes (CBDT) revising monetary limits for filing appeals and SLPs to reduce litigation, the Court highlighted that departments continue to pursue cases even when:
- The tax effect is below the prescribed limits
- The legal issue is already settled
- The chances of success are extremely low
This contradicts the Department's own litigation-management policy and burdens both the judiciary and taxpayers.
CBDT's Monetary Thresholds Meant to Reduce Litigation
To discourage excessive litigation, the CBDT had increased the monetary thresholds in 2024 for filing appeals:
- Rs 60 lakh for ITAT appeals
- Rs 2 crore for High Court appeals
- Rs 5 crore for SLPs before the Supreme Court
However, the SC noted that despite these guidelines, departments often file SLPs on identical issues "just to keep the matter alive."
This, the Court said, shows a lack of due diligence and undermines the very purpose of litigation-control reforms.
Implications for Taxpayers and the Revenue
For Taxpayers
- The ruling strengthens the case against repetitive, meritless appeals.
- Taxpayers facing similar SLPs may now seek quicker disposal, citing the SC's observations.
- It may reduce litigation pressure, especially in matters where precedents already exist.
For the Income Tax Department
- The judgment is expected to push internal reforms in litigation-management.
- Officers may face stricter scrutiny when filing SLPs without sufficient grounds.
- The Department may soon revisit and withdraw several pending SLPs on settled issues.
A Step Towards Reducing Judicial Backlog
The Supreme Court has repeatedly urged government departments to avoid filing appeals mechanically. This latest order reinforces that message, signalling a possible shift toward more responsible litigation practices.
With nearly 70% of tax cases in higher courts filed by government authorities, the ruling is seen as a reminder that judicial time must be used judiciously and that settled issues should not be reopened unless backed by substantial legal grounds.
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