Up to 41% litigations to be withdrawn as govt hikes threshold limits for appeals in tribunals, courts
To reduce the long-pending grievances of taxpayers and to minimise tax litigations, the government on Wednesday decided to increase the threshold monetary limits for filing appeals in appellate tribunals, high courts and the Supreme Court to Rs 20 lakh, Rs 50 lakh and Rs 1 crore, respectively. The earlier limits for filing appeals in these fora were Rs 10 lakh (appellate tribunals), Rs 20 lakh (HCs), and Rs 25 lakh (SC), respectively. Apart from facilitating ease of doing business, the measure would also reduce future litigation flow from the tax departments. Overall, around 41 per cent cases related to direct taxes and 18 per cent cases related to indirect taxes would be withdrawn after the move.
"This is a major step in the direction of litigation management of both direct and indirect taxes as it will effectively reduce minor litigations and help the department to focus on high-value litigations," the Ministry of Finance said in a statement.
In case of Central Board of Direct Taxation (CBDT), out of total cases filed by the department in Income Tax Appellate Tribunal (ITAT), 34 per cent of cases will be withdrawn after the introduction of the new limits. In case of high courts, 48 per cent of cases will be withdrawn, and in case of the Supreme Court, 54 per cent of cases will be withdrawn.
The total percentage of reduction of litigation from the department's side will get reduced by 41 per cent. "However, this will not apply in such cases where the substantial point of law is involved," said the Ministry.
Similarly, in case of the Central Board of Indirect Taxes and Customs (CBIC), out of total cases filed by the department in the Customs, Excise and Service Tax Appellate Tribunal, total 16 per cent of cases will be withdrawn. In case of high courts, 22 per cent of cases will be withdrawn and in the case of Supreme Court, 21 per cent of cases will be withdrawn. The total percentage of reduction of litigation from the CBIC's side will get reduced by 18 per cent. The ministry said this will not apply in such cases where the substantial point of law is involved.