Un-necessary litigation and spending on low tax effect cases. Why Senior Advocates appear in a large team in such cases? Is money making only target?

[DEVKUMAR KOTHARI]

Some of earlier articles on related topics:

Low tax effect in pending appeals- The administrative role to withdraw appeal can be carried by officers of appellant and / or by the Advocate on Record of appellant ( revenue) and Registry office without engaging counsels by appellant and respondent. Appeals with low tax effect must be withdrawn to avoid wastage of public money, brain drain of honorable judges and counsels and to achieve purpose for prescribing minimum tax effect limit for filing appeals.  Dt. 04.05.2024

AVOID EXCESSIVE PUBLIC SPENDING ON UN NECESSARY LITIGATION AND ENGAGING EXCESSIVE NUMBER OF COUNSELS.

Dated: December 21, 2022

FILING APPEAL BEFORE SUPREME COURT – LOW TAX EFFECT

Dated: April 29, 2024

WASTAGE OF TIME OF JUDICIARY AND PUBLIC MONEY -WHY A TEAM OF SO MANY COUNSELS JUST TO WITHDRAW APPEAL AND ALSO ON UNNECESSARY LITIGATION BY REVENUE

Dated:- September 15, 2021

Litigation to be avoided in low tax effect cases:

Policies have been framed from time to time under various tax laws by government to avoid costly litigation on matters involving low tax effect. The policy decisions provide for not filing of appeals in such cases and to withdraw appeals, if already filed.

However, we find that large number of appeals are filed even when tax effect is low and these are contested also and the Courts dismiss them as not maintainable.

Appeals pending are also contested and  in many cases Courts dismiss them for low tax effect.

Withdrawal of appeal can be through a simple process of writing an  application for withdrawal, with a copy to opposite party also.

We find large numbers of senior counsels appears on behalf of tax department even to withdraw such appeals.

Withdrawal applications, can also be dealt by the Registry office, and can be decided based on application filed by appellant and response, if any filed by the respondent.

In case of necessity, these can be placed before the bench, for their decision. This will be required in rare cases when department is seeking withdrawal of appeal.

For safe guard and standard practices, guidelines can be prescribed to deal with applications for withdrawal of appeals by tax departments.

This can reduce burden on Courts and  judges considerably.

Search Results about low tax effect cases:     

Author searched on this website and found search results in terms of number of records as follows for some of criterion of search as follows:      

Search Text: dismissed for low tax effect  - all courts , all laws -   6760 Records

Search Text: dismissed for low tax effect   - all courts , Income tax  5136 Records

Search Text: dismissed for low tax effect  SC/ orders/ highlights , all laws -171 records.                                                              

Search Text: dismissed for low tax effect  SC orders/ highlights  income tax -112 records.

Search Text: dismissed for low tax effect    SC orders/ highlights Customs  17 Records

Search Text: dismissed for low tax effect     SC orders/ highlights  Central Excise-  30 records.     

The above are illustrative and not exhaustive for the reason that search for not all different laws have been made.

Furthermore, on further in depth history of some of cases  it is found that many times cases involved COD petitions, cases  were fixed for hearing, part heard or adjourned for some or other reason. In some case other procedures were also involved about filing, refiling, removing  defect, service of notices, interlocutory applications, etc. Causing prolonged pendency and delay in disposal of cases.

Counsels- When tax department engages large number of senior counsel, the tax payer has also to engage some counsel to protect his case from any uncertainty.

These illustrative, data definitely indicates large-scale wastage of valuable time of Courts and public money spent on hefty fees for counsels.

Some random examples:

PRINCIPAL COMMISSIONER OF INCOME TAX VERSUS M/S AHINSA VINIMAY PVT. LTD. - 2024 (11) TMI 537 - SC ORDER

PRINCIPAL COMMISSIONER OF CUSTOMS VERSUS CMR NIKKEI INDIA PVT. LTD. [2024 (1) TMI 291 - SC ORDER]

COMMISSIONER OF CUSTOMS VERSUS M/S. LAVEENA COMBERS [2023 (11) TMI 272 - SC ORDER]

C.C.E., KOLKATA III VERSUS M/S. KALYANI SPINNING MILLS LTD. [2023 (11) TMI 680 - SC ORDER]

COMMISSIONER OF CENTRAL EXCISE, PONDICHERRY, PONDICHERRY VERSUS M/S. M.R.F. LTD. THROUGH MANAGING DIRECTOR, ERIPAKKM VILLAGE, PONDICHERRY [2023 (12) TMI 781 - SC ORDER]

Observations- whether it was at all necessary to engage so many  counsels by the Petitioners/ appellants being tax department?

 Whether it was not possible to withdraw   the appeal by the applicant by making an application in this regard as soon as it was found that appeal involves low tax effect?

If application was made well in advance, the respondent could also decide not to engage counsels and instead could have filed no objection, if required.

Pendency of cases could be reduced considerably.

Readers are requested to share their experience and can comment upon this article and can also write further articles.