80,000 cases pending in CESTAT; Govt to set committee to reduce litigation

With a whopping 80,000 tax litigation cases pending before Cestat, Revenue Secretary Sanjay Malhotra on said the government will set up a committee to suggest measures to reduce tax litigation

With a whopping 80,000 tax litigation cases pending before Cestat, Revenue Secretary Sanjay Malhotra on Saturday said the government will set up a committee to suggest measures to reduce tax litigation and expeditious disposal of backlog.

Speaking at an event to commemorate 40 years of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Malhotra said bringing clarity in tax laws and rules will help in reducing litigation as pendency of litigation has been a constant challenge before the tribunal.

"What we will do in the government and we will seek support from CESTAT and CBIC is with us, we will set up a group and see how we can reduce litigation and reduce pendency. Whether it is by simplifying, clarifying law or training (officers), what are the various ways we can reduce fresh litigation and provide for expeditious disposal of pending cases," Malhotra said.

He said CESTAT is currently operating with a full bench and the vacancies that were there last year have been all filled up. However, 80,000 cases are still pending before the tribunal and the average pendency is of 4-6 years.

"20,000 cases are registered every year. We are disposing of as many but we are not able to clear the backlog," Malhotra said.

Speaking at the event, Central Board of Indirect Taxes and Customs (CBIC) Chairman Vivek Johri suggested greater interaction between the CESTAT members and CBIC officers to help tax officers learn the often repeated mistakes in the adjudication process.

"I just wonder if there is any scope for greater interaction between the members of the bench and the department.

"It could be workshops, roundtables... so that mistakes that occur repeatedly by officers who are implementing the law, particularly in terms of principles, and not necessarily in a particular case ... could be flagged to us and then we could build those into our training system into the discussion we have with our (adjudicating) officers so that disputes come down quite substantially. That would be a useful step to take for the future," Johri said.

CESTAT hears appeals against orders passed by the Commissioners of Customs and Excise and Service Tax under the Customs Act, 1962, Central Excise Act, 1944 and Finance Act 1994. The Tribunal is also empowered to hear the appeals against orders passed by the Designated Authority in Anti Dumping Duties under the Customs Tariff Act,1975.

The sanctioned strength of the tribunal as on date, apart from the President of the Tribunal, is of 16 judicial and as many technical members.

CESTAT President Justice Dilip Gupta said in 2022 there were only 9 judicial members and 4 technical members with me. "All the vacancies have now been filled up," he said, adding all orders are uploaded on real-time basis on the Cestat website.