'Largest Litigant' Tag for Government - HC asks CBEC to avoid frivolous litigation - Follow CBDT
THE Bombay High Court recently expressed its anguish over the frivolous appeals filed by the Customs and Central Excise Department. In one particular Central Excise case, the involved stake was Rs. 5000/-.
The Court noticed that the Centre and the States have acquired the “government is largest litigant” tag, accounting for 70% of the 3 crore cases – over 2.1 crore pending in various Courts.
The High Court observed, “Now, the Central Government has formulated a National Litigation Policy (NLP) to shed the tag “Largest Litigant”. Thus, keeping in view the policy of the Central Government, the time has come to invite 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 is negligible. The similar policy is already in vogue so far as Income Tax Department is concerned. The Central Board of Direct Taxes (“CBDT”) vide its circular dated 27th March, 2000 followed by other circulars dated 24th October, 2005 and 15th May, 2008 has 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 has definitely reduced volume of litigation, with the result, their officers are 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 is 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 to decide” attitude needs to be given go bye.
On the aforesaid backdrop, we hope that the Chairman of the Central Board of Excise and Revenue shall consider the necessity of issuing circular, on the lines of the circulars issued by the CBDT, so as to reduce litigations arising out of indirect tax legislations. This will definitely go a long way to reduce pendency of the cases in the various Courts and at the same time will help the officers of the department to concentrate more on the cases involving heavy stakes. Eventually, litigation expenses, burden of the Courts as well as that of the Revenue department to a considerable extent would get reduced.”
Click here for the HC Order.