Govt files appeal on ITC tax dues

Revenue dept assessing impact on other cases

The government has filed a review petition before the Supreme Court against the court's order granting tobacco giant ITC excise duty relief in a dispute over Rs 803 crore tax.

"We filed the review petition on October 7 under the provisions of Article 137 of the Constitution. If the court accepts the grounds on which the petition has been filed then the case will be heard," a senior finance ministry official told Business Standard.

The government had to file a review petition by October 10. The revenue department is also analysing the implications of the order on other cases, sources added.

While ministry officials were tightlipped about the argument being put forth by the department against the court's verdict, officials said that the Supreme Court has interpreted the notifications of 1983 and 1985 in a certain manner which has led to a decision in favour of ITC.

Though there have been instances of government having to refund duties following directives of the court, such a huge sum is unprecedented.

As per the order, the government would have to refund the Rs 350 crore pre-deposit paid by the company. ITC had appealed to the SC against Cegat's order upholding the charge of excise evasion.

The revenue department too had appealed to the court challenging Cegat's decision to waive duties on job workers and reducing the duty liability of the ITC.

The case had been dragging in court for 17 years. The company was charged on grounds of selling cigarettes at a price higher than the prices printed on the packs, which is the basis for levying duty for the period March 1983 to February 1987 The alleged evasion was originally put at Rs 803.78 crore.

The case was heard by a two-judge bench "" Justice Ruma Pal and Justice P V Reddi.

The review petition if admitted would be heard by the same bench.

The verdict was originally announced on September 9, but the order was reserved after it was discovered that an unsigned order had been taken out of the courtroom without permission. The decision was then announced the next day.

Taxing times

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• The government has filed a review petition before the Supreme Court against the court's order granting tobacco giant ITC excise duty relief in a dispute over Rs 803 crore tax
• If the court accepts the grounds on which the petition has been filed, the case will be heard
• The government had to file a review petition by October 10
• The revenue department is also analysing the implications of the order on other cases
• Officials say the Supreme Court has interpreted the notifications of 1983 and 1985 in a certain manner, which has led to a decision in favour of ITC