Inordinate delays in filing appeals for recovery of tax dues by the government have often attracted the attention of the apex court. These delays caused by lapses on the part of revenue officials at Centre and states, however, also represent a systemic failure, legal experts say.
A Supreme Court Bench headed by Justice SH Kapadia recently pulled up the Jharkhand government for filing its appeal against Steel Authority of India Ltd for recovery of tax dues after a delay of more than 1,200 days. The judge asked the state government to explain what action it has taken against the officer concerned who was assigned the task of filing the appeal. The court direction underlines the concept of public accountability and fixing of responsibility in discharge of official duties, as the revenue department has been found wanting on this aspect. The government being the biggest litigant in the country, more often than not fails to impress upon the courts in explaining the reasons for the delay. Worse, it also doesn’t take any action against the officers responsible for causing huge losses to the exchequer.
Additional solicitor general Vivek Tanka, who is also seen juggling in the courts to defend various departments, explains: “There is a complete systematic failure. It is endemic not merely in states but also in different departments of the central government.”
He says the consultative process has too many layers and thus takes long. “The impact of such delays is immense and difficult to quantify,” he adds. Besides, non-cooperation and non-coordination between the departments also adds to the departments’ woes.
Senior corporate lawyer Mukul Rohtagi feels that the appeals are delayed by certain officials “who have some axe to grind.” “Either they have colluded with the private parties or are somehow interested in delaying the matter so that appeals get knocked out just for delay,” he said.
Echoing Rohtagi’s views, corporate lawyer KR Sashiprabhu, who often represents Reliance Industries, finds it “normal” for revenue to file appeals after the limitation period. “The obvious thing is that there is a possible collusion with the assessees (be it companies or individuals) as high stakes are involved. Delay helps the assessee as there is high chance that the department’s appeal will be knocked out without going into merits,” says Sasiprabhu.
The failure to recover tax dues could adversely impact the fisc as it could somewhat negate its success in recent years in enhancing tax collections. Often, government petitions on tax dues are being dismissed not on merits but on grounds of delays and inept conduct of litigation. According to Tankha, there are vested interests that prevent expeditious resolution of cases. “This issue is not confined to any one department but is a pan-India problem,” he added.
Under the Income-tax Act, 1961, a specific period of limitation is provided for filing an appeal before any higher court or appellate authority. Under Section 260-A of the Act, a period of 120 days is being provided for filing an appeal to the High Court from the order of the income tax tribunals. However, the courts have discretion to take a lenient view and condone the delay, but now the government is finding it tough to explain the reasons for undue delays, arising out of sheer negligence.
Solicitor general Gopal Subramanium said the law ministry would reintroduce a blueprint in the beginning of February to process all the information quickly between different departments. Computerised would also help in a big way.
Do you think CBDT should extend Tax Audit Report and relevant ITR Due Date? Please Comment, Vote, Retweet and Like.— Tax Guru (@taxguru_in) September 18, 2018