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To Provide a 'Cascading Effect', CJI Khehar Seeks Details of Major Tax Cases; Judiciary, Industry Give a Thumbs Up

Soon after CJI JS Khehar sought details from the Ministry of Finance regarding major tax cases pending with the Supreme Court, experts lauded his proposal and said that it would lead to a 'major reduction in pendency of tax related litigation'.

Debayan Roy | News18.com

Updated:February 24, 2017, 9:16 PM IST
JS Khehar
File photo of Chief Justice of India (CJI) JS Khehar.

New Delhi: Soon after Chief Justice of India (CJI) JS Khehar sought details from the Ministry of Finance regarding major tax cases pending with the Supreme Court so that it could decide on the important ones, experts lauded CJI's proposal and said that it would lead to a 'major reduction in pendency of tax related litigation'.

CJI Khehar, while addressing a book release event at Rashtrapati Bhavan, said, "So far initiatives that we have taken, we have tried to collect data even from the Finance Ministry relating to cases, on tax issues, where there could be a cascading effect. So I wrote to the Secretary of the department asking him whether he can point out the cases where there is a cascading effect so that we decide one and lot of other cases of different levels can be disposed off."

Dinesh Kanabar, a tax expert and the CEO of Dhruva Advisors, told News18 that the proposal "is not a far-fetched dream" and the Finance Ministry should broadly identify 10 or 12 areas where the apex court would have to deliver verdicts.

"It is not about adjudicating only one case at hand. There are about 2000 cases relating to this issue and if the apex court deals with one such case and sets a precedent then it becomes the law of the land and hence has to be followed by the other courts," said Kanabar.

An estimated 390,000 direct tax cases are pending across various appeal forums including commissioner (appeals), income tax appellate tribunals (ITAT), high court and Supreme Court.

Senior advocate Dinesh Vyas told News18 that this move will "in one stroke strike at the root cause of pending tax litigation across the country."

"The process is a little daunting but not impossible. Certain areas need to be identified regarding which multiple litigations are pending across several forums. Like the Supreme Court verdict in the case of Disallowance of interest under Section 14A of the Income Tax Act is awaited and hence the lower courts are now collecting all cases which deal with 14A so that they can be disposed off once the apex court delivers the judgment," said Vyas.

There also have been suggestions from the industry to make this move a reality.

Sharad Kohli, Chairman of the KCC Group and a tax expert, told News18 that identifying the cases “on the basis of a monetary threshold will help in avoiding the stink of bias.”

"There need to be a clear bifurcation of cases while the list is being prepared by the Finance Ministry for the CJI. They should stick to the concept of monetary threshold so that cases are demarcated, like below 5 crores, above 20 crores, etc so that it would not look like a case of bias and won't seem picky," said Kohli.

However, Shiv Kant Jha, Former Commissioner of Income Tax and a tax expert, raised doubts on the practicality of the proposed move citing the number of factors and parties often involved in each case.

"Any step taken to address the issue of pending cases is a good one, but it has to be seen how such a move can be implemented. There are always several parties and factors involved in a case and this becomes an impediment in solving only the cases which have a cascading effect. This move cannot succeed without social consciousness at the grass root level where there is a general tendency to delay the cases on part of the lawyers, litigants and even the judges. So if one gentleman (CJI) thinks that this problem can be solved in this way, it would not be possible unless a reform comes from below and all factors are weighed in," Jha told News18.

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| Edited by: Bijaya Das
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