Revenue dept to take up cases held in courts

The Revenue Department is working on a strategy to closely monitor 26 high-value cases of more than Rs 50 crore each that have been stayed by various courts across the country.

The finance ministry had, last year, mopped up indirect arrears worth Rs 2,642 crore against an internal target of Rs 3,000 crore.

Though no internal target for indirect tax arrears has been set so far, officials told Business Standard that the focus this fiscal would be on following up cases held up in the Supreme Court, the High Courts, the appellate or debt recovery tribunals. "We will try to get the stays vacated," an official said.

The task force on arrears recovery has suggested that the high-value cases be monitored by tax commissioners so that they can be followed up in courts.

While the total indirect tax arrears are estimated to be around Rs 8,000 crore, nearly Rs 800 crore are due from normal cases where the parties concerned are liquidated on account of bankruptcy or because of physical assets being sold off.

According to officials, there are two cases involving arrears of above Rs 50 crore each. These dues are pending since the concerned parties cannot be identified, the said.

Officials pointed out that, in order to facilitate arrears collection, the ministry had introduced several provisions in the law through the Taxation Law Amendment Bill, 2005. These included provisional attachment of property of errant parties, and their arrest.

The provision to attach property, introduced in the Customs and Excise Act, is similar to Section 281B of the Income tax Act, which has been in force since 1975.

"The attachment does not prevent an owner from using the property and assets. It merely prevents the owner from creating encumbrance or selling it so that future liabilities which arise after a case is finalised, can be recovered," officials said.

Officials pointed out that property and assets could only be attached after a written approval of the Commissioner of excise or Customs. The attachment automatically lapses at the end of six months unless extended by the commissioner. The total period of extension cannot be beyond two years.