When Chief Justice S H Kapadia assumed the top post, one of the first things he did in July, 2010, was to order investigation into inordinate delays in filing appeals by the revenue departments. The time limit had been exceeded by more than three years in two cases. In one case, the solicitor general admitted that there was an “elephantine delay of 1,206 days”.
This week, the judge is retiring. Things have not changed substantially, going by his recent orders in the case, Director, IT International Taxation vs Citi Bank N A. The judge has been definitely up against a steel frame. On Monday, the government characteristically told him that it has set up a committee. Haven’t we heard that one before?
The orders in this case are typical in revenue cases. In July this year, the court stated that “there is an enormous delay of 450 days in filing the appeals before the Bombay high court. There is also delay of 535 days in filing and 123 days in re-filing special leave petition (SLP), and 694 days’ delay in filing another SLP in the Supreme Court.
We want the department to file an additional affidavit giving reasons for the delay and what steps the department intends to take to remedy such situations which have been recurring in matters involving huge amounts.”
In August, the case had to be adjourned again since the government counsel had “not received any instructions” from the department, “particularly, when the stakes are running into Rs 59 crore”.
Most laws, like the Income Tax Act, prescribe a 120-day deadline to file appeals. The Limitation Act and the Civil Procedure Code also have such rules, which is based on the principle that equity aids the vigilant, not those who slumber over their rights. Private citizens who lose their suit are anxious to file appeals. But not revenue officials.
According to the government, 5,860 direct tax cases involving demand worth Rs 2,707 crore are pending in the Supreme Court, while 29,650 other cases worth Rs 36,340 crore are before the high courts.
Is it merely because the officials are slumbering over the files tied in red tape? Or because of the need for frequent conferences with officials and lawyers, transfer and promotion of officials handling the cases? Or is it because the government needs better legal professionals to draft appeals, as the Chief Justice pointed out on Monday?
And why does the delay happen more often when huge amounts of mega corporations are involved? In the current miasma of corruption, one would harbour wild suspicions.
Some earlier judgments of the Supreme Court have been outspoken on this. In the judgment, State of Jharkhand vs Krishan Pradhan, the court discussed the problem thus: “It appears that cases are coming up before this court and probably before the high courts also, where appeals are filed after inordinate delay and an explanation is sought to be given in the application for condonation of delay filed by the government or state authorities that the file was moved from one desk to another or the approval from the higher authority which took considerable time.”
Not convinced by the explanations, the judgment was more forthright: “We feel that the beneficiary of the judgment may be hand-in-glove with the officials who deal with the files, and the files are suppressed for a long period. Then the appeals are filed after a long delay to get them dismissed on the ground of delay. Huge amounts of public money or public property may be involved and the government will be the loser on the technical point of limitation. This racket has been going on for a long time. Now the time has come that this racket is ended and the officials responsible given severe punishment.”
In one case, a Gujarat government corporation took four years to file its appeal in a lost case and the court ordered that the loss suffered by the corporation should be recovered from the officials who did not file appeal on time (Oriental Aroma vs Gujarat Industrial Corporation).
The court asked the Karnataka government to pay Rs 1 lakh as fine for filing an appeal after 14 years (State of Karnataka vs Moideen Kunhi). It also ordered the government to take action against “every person responsible for the alleged fraud and delay in pursuing legal remedies”. A similar order was passed in the case, State of Delhi vs Ahmed Jaan.
A 2003 study by the Comptroller and Auditor General has explained the reasons for the delay in filing appeals and it said if the rules are followed, there would be no such complaint. A former Attorney General, at the request of the court a decade ago, had made several suggestions. Now the Central Board of Direct taxes is reported to have issued fresh directives. We shall wait to see the leopard change its spots.
