In limine rejection of an appeal by the high courts or the Supreme Court on ground of a delay in filing is quite common. But in limine rejection on merit by the courts is nothing but an ignominy. It is a humiliation and discomfiture put together. The case I am discussing here is an apt example of the above. It also smacks of harassment to the assessee.
The Uttarakhand High Court did not admit an appeal filed by the revenue and rejected it in limine on the ground that there was neither any question of law nor any question of fact as reported in 2012 (285) ELT 497 (Uttarakhand). The facts are simple in this case. A Central Excise Assessee submitted a declaration for the purpose of obtaining benefit of notification No.50/2003-C.E. The assessee should have written 50 but by mistake wrote 49. It was a clerical error.
The revenue even accepted that the wrong number of the notification was by mistake and the goods were covered by notification No 50. The commissioner in-charge of adjudication did not allow the benefit of the exemption on the ground that the notification number was written wrongly even though by mistake. The Tribunal accepted the appeal by waving the requirement of pre-payment of duty because the case was very clear in favour of the assessee.
Against such a clear order of the tribunal there was no question of going to the high court. The issue here that I want to highlight is, why the department goes to high court in cases which they are destined to lose in limine.
Partly, it is because of the revenue department's attitude of harassing an assessee and partly because the lawyers arguing such cases in the high court do not want to miss their fees, even if it is a terribly bad case to argue.
No wonder the revenue department loses so badly in tribunal, high courts and Supreme Court.
The data for both direct and indirect taxes are similar. The Minister of State for Finance on September 9, 2012, gave figures (for indirect taxes) to Parliament that between 2008-09 and 2011-12, nearly 85 per cent cases on an average were lost in the Tribunal, 80 per cent in high courts and 90 per cent in the Supreme Court.
For direct taxes on the basis of data taken from the Report of Standing Committee on Finance, it is found that during FY12, only 23 per cent cases filed by taxpayers were decided in favour of the department at the tribunal level. At the high court-level, the success rates for the department was 26 per cent in FY10 and 36 per cent in FY12. In the Supreme Court, the success rates was 14 per cent in FY12.
The conclusion is as follows.
1. It should be admitted by CBEC and CBDT that filing infructous appeal tantamount to harassment of assessee.
2. Member (Legal) should personally examine several cases where the revenue department has lost in high courts and the Supreme Court to ensure that corrective action is taken particularly to avoid filing infructous appeals.
3. In cases where the tribunal has allowed the appeal of the assessee without even insisting on pre-deposit of duty, appeal should not be allowed to be filed without specific permission of Member.
4. CBEC and CBDT should institute a system of discussing in its regular weekly meetings the causes for losing cases at high courts and Supreme Court.
5. A determined and well thought out plan should be launched by CBEC and CBDT to improve the performance of the Department in Tribunal, high courts and Supreme Court.
Email: smukher2000@yahoo.com
IN CONCLUSION:
The Uttarakhand High Court did not admit an appeal filed by the revenue and rejected it in limine on the ground that there was neither any question of law nor any question of fact as reported in 2012 (285) ELT 497 (Uttarakhand). The facts are simple in this case. A Central Excise Assessee submitted a declaration for the purpose of obtaining benefit of notification No.50/2003-C.E. The assessee should have written 50 but by mistake wrote 49. It was a clerical error.
The revenue even accepted that the wrong number of the notification was by mistake and the goods were covered by notification No 50. The commissioner in-charge of adjudication did not allow the benefit of the exemption on the ground that the notification number was written wrongly even though by mistake. The Tribunal accepted the appeal by waving the requirement of pre-payment of duty because the case was very clear in favour of the assessee.
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The Tribunal observed in this case Packaging India Pvt. Ltd. Vs. CCE Meerut- 2012(283)ELT 390 (Tri. Del), that it is not the department's case that at any stage the appellant became ineligible for exemption. So the tribunal held, "Therefore, in our view, merely because of inadvertent clerical error regarding Notification No. in the declaration filed for the purpose of exemption, the appellant cannot be denied the benefit of Notification No. 50/2003-C.E., when he otherwise is eligible for the same". The tribunal pertinently observed that it was difficult to sustain the impugned order of commissioner adjudication which is based upon the technical consideration ignoring real facts.
Against such a clear order of the tribunal there was no question of going to the high court. The issue here that I want to highlight is, why the department goes to high court in cases which they are destined to lose in limine.
Partly, it is because of the revenue department's attitude of harassing an assessee and partly because the lawyers arguing such cases in the high court do not want to miss their fees, even if it is a terribly bad case to argue.
No wonder the revenue department loses so badly in tribunal, high courts and Supreme Court.
The data for both direct and indirect taxes are similar. The Minister of State for Finance on September 9, 2012, gave figures (for indirect taxes) to Parliament that between 2008-09 and 2011-12, nearly 85 per cent cases on an average were lost in the Tribunal, 80 per cent in high courts and 90 per cent in the Supreme Court.
For direct taxes on the basis of data taken from the Report of Standing Committee on Finance, it is found that during FY12, only 23 per cent cases filed by taxpayers were decided in favour of the department at the tribunal level. At the high court-level, the success rates for the department was 26 per cent in FY10 and 36 per cent in FY12. In the Supreme Court, the success rates was 14 per cent in FY12.
The conclusion is as follows.
1. It should be admitted by CBEC and CBDT that filing infructous appeal tantamount to harassment of assessee.
2. Member (Legal) should personally examine several cases where the revenue department has lost in high courts and the Supreme Court to ensure that corrective action is taken particularly to avoid filing infructous appeals.
3. In cases where the tribunal has allowed the appeal of the assessee without even insisting on pre-deposit of duty, appeal should not be allowed to be filed without specific permission of Member.
4. CBEC and CBDT should institute a system of discussing in its regular weekly meetings the causes for losing cases at high courts and Supreme Court.
5. A determined and well thought out plan should be launched by CBEC and CBDT to improve the performance of the Department in Tribunal, high courts and Supreme Court.
Email: smukher2000@yahoo.com
IN CONCLUSION:
- CBEC and CBDT should admit that filing infructuous appeal tantamount to harassment of assessee
- Member (Legal) to examine cases where Revenue has lost in High Courts and the Supreme Court for corrective action to avoid filing of infructuous appeals
- In cases where the tribunal has allowed the appeal of the assessee without pre-deposit of duty, the appeal should not be allowed to be filed without specific permission of Member.