Tax Appeals - Pre-deposit Should Go
IT is high time that we seriously think of doing away with this anarchy called pre-deposit, which is causing irreparable damage to the Industry and Trade. In the CESTAT, most of the cases heard on any day are stay matters and the only issue is ‘waiver of pre-deposit'.Though some cases are listed at the end of cause list for final disposal, they hardly reach the Bench. If things go like this, it will take decades before matters are finally settled and in trying to convince the Bench about the need to waive pre-deposit, elaborate arguments are made at the Stay stage that they look almost like final hearings.
And a major part of the department's activities consists of pursuing these irrecoverable arrears - attaching properties, bank accounts, going after missing assessees and even then not being able to recover even a small fraction of the huge arrears.
Should we waste the National time and talent in such totally unproductive activities? Pre-deposit is really not required now, because if the assessee loses the case ultimately, he has to pay the tax/duty with 18 percent interest and this is a wonderful investment for the Government. No Government investment brings in at least a third of that kind of returns. If the assessee ultimately wins, this pre-deposit is a huge unjust burden on him and is simply State torture. Let the Government consider this as a good investment for future, instead of blowing up all the money they have and even the money they don't have, on all kinds of wasteful expenditure.
Even if total waiver cannot be given, let us fix pre-deposit as a standard 10 percent of the duty/tax demanded with absolutely no discretion to any appellate authority- then appellate authorities, especially the Tribunal need not waste its time on Stay matters and final matters can be taken up and perhaps they can be decided in a couple of years.
This will also bring down the corruption levels considerably.
This is the best time for the Industry and Trade bodies to influence the political parties to bring in law providing for little or no pre-deposit. Political parties are offering all kinds of sops like free electricity and colour TVs to voters - with the taxpayers' money. It is time that the real taxpayers also demand and get some relief (at least a little less harassment). They should insist on political parties including these measures in their manifestos issued during elections - though this may not be very populist.
After all you give a lot of money to the politicians - make them listen to your woes - at least during elections. If you have tears, prepare to shed them NOW.
We had too much of politics running/ruling economics - let economics now dictate politics.