To appeal or not to appeal – that’s the question
Can Audit question the decision of the commissioner not to file an appeal?
Please see the two paras extracted from the latest Audit Report
On this being pointed out (June 2004), the Ministry stated (August 2005) that the order in appeal was accepted by the commissioner in June 2002 and therefore it had attained finality in terms of legal provisions.
Reply is not tenable as provisions of rule 8 were mandatory in nature and therefore the case was fit for appeal. Failure of department in not doing so resulted in financial accommodation to the assessee to the tune of Rs.1.90 crore.
The Commissioner (Appeals) allowed utilization of credit for duty payment even after default. The department must have thought, it was not worthwhile to go in appeal. One of the rarest of rare cases when department decides not to appeal. If the department takes such a judicial decision, the Audit is not going to keep quite. Audit has alleged financial accommodation in not appealing. If every decision not to appeal is subject to Audit scrutiny, then, nobody in the department will accept any order. Before deciding to accept an order, the officers have to now think of the Audit sword.
No appeal is no more an appealing proposition for the revenue officers. As such our Tribunals and courts are clogged with frivolous revenue appeals on matters which have reached finality long ago. The assessees feel frustrated when they are stuck with Show Cause Notices based on silly audit objections (the abatement on GTA service is a classic example). Now even appellate orders are under Audit scrutiny.
At what stage would Audit allow the department to accept an order? Tomorrow if a Tribunal order is accepted, the Audit can raise the same objection.
They can go a step further and say that even the Supreme Court order should not be accepted and the government should have brought in a retrospective legislation.
Where will all this end at? Are we condemned to spend our money, time and energy in litigation? What makes the Audit think that it can sit in judgement over the orders of a Commissioner (Appeals) and a jurisdictional commissioner who accepted that order? Is it not interference in the judicial work?
Audit is absolutely essential, but if the whole purpose of audit is to increase litigation and produce mountains of paper waste, it is time, we had a fresh look at the whole scheme. For that one para in the Audit report, thousands of man-hours must have been wasted. Audit says, “reply of the department is not tenable”. Now what does it want the commissioner to do?
CAG should do a study on frivolous objections raised by Audit, number of Show Cause Notices issued consequently, amount of paper and man-hours spent, the stages of adjudication and appeals and final result and finally the net loss to the country because of that objection should be computed and informed to Parliament.