2012 (9) TMI 523 - SC - Income Tax

Delay in filing the special leave petitions - Held that - Where huge revenue/demand from the Department is involved, invariably, there is inordinate delay in filing appeals before the High Court under Section 260A and in filing special leave petitions before this Court - direct the Registry to forward a copy of this Order to the Hon ble Finance Minister and Hon ble Law Minister for doing the needful at the departmental level so that such cases of revenue leakages do not recur. Place these matters on 17th September, 2012, in order to enable learned Additional Solicitor General to make a statement in this regard.

Summary

Issues:
1. Huge delay in filing special leave petitions and appeals before the High Court.
2. Inordinate delays in cases involving significant revenue from the Department.
3. Lack of satisfactory explanation for delays leading to revenue leakages.

Analysis:
1. The Supreme Court addressed the issue of significant delays in filing special leave petitions and appeals before the High Court, especially in cases involving substantial amounts of revenue. The Court noted the delay in this particular case amounting to approximately ninety crores and expressed dissatisfaction with the affidavit provided by the Department to explain the delay. The Court raised concerns about the lack of accountability and directed the Department to consider holding a departmental inquiry into the delay.

2. The Court highlighted a recurring problem where delays in legal proceedings seem to occur primarily in cases with high stakes or substantial revenue demands from the Department. This pattern of inordinate delays, specifically in filing appeals under Section 260A of the Income Tax Act, raised suspicions and prompted the Court to question the reasons behind such delays. The Court emphasized the need to investigate this issue further and mentioned that similar concerns have been brought to the attention of the Attorney General and the Ministry of Law in the past.

3. In response to the identified issues, the Supreme Court directed the Registry to send a copy of the order to the Finance Minister and Law Minister to take necessary actions at the departmental level to prevent future cases of revenue leakages due to delays in legal proceedings. The Court scheduled a follow-up hearing to allow the Additional Solicitor General to provide further information and updates on the steps taken to address the delays and prevent similar occurrences in the future. The Court's proactive approach aimed to ensure accountability and efficiency in handling cases involving substantial revenue to prevent any adverse impact on the legal process and revenue collection mechanisms.