The Supreme Court on Tuesday disposed of 573 direct tax cases with tax effect less than ₹5 crore, after the monetary limits for appeals were revised in the Budget, earlier this year.

“This significant milestone aligns with the government’s efforts to reduce tax litigation and promote ease of doing business,” the finance ministry said while reacting to the apex court’s ruling, which is a result of the announcement made in the Budget by Finance Minister Nirmala Sitharaman. “I propose to increase monetary limits for filing appeals related to direct taxes, excise and service tax in the Tax Tribunals, High Courts, and the Supreme Court, to ₹60 lakh, ₹2 crore and ₹5 crore respectively,” she had said.

In pursuant to the Budget announcement, the CBDT (Central Board of Direct Taxes) and CBIC (Central Board of Indirect Taxes and Customs) had issued necessary orders to enhance the monetary limit for filing appeals in their respective domains. As a result, it is expected that the cases pending before various appellate fora will come down and reduce tax litigation, the Ministry said.

Direct Taxes

The monetary threshold for filing tax dispute appeals by the department in the Income Tax Appellate Tribunal (ITAT)wasraised to ₹60 lakh from ₹50 lakh. For High Courts, the new ceiling is ₹2 crore as against ₹1 crore previously. Similarly, for the Supreme Court, the limit has been enhanced to ₹5 crore from ₹2 crore. “As a result of these revised limits, it is estimated that around 4,300 cases (ITAT: 700 cases, High Courts: 2,800 cases and Supreme Court: 800 cases) will be withdrawn from various judicial forums over the course of time,” the Ministry said. 

Indirect Taxes

Similarly, the limit for filing appeals for the specified legacy, Central Excise & Service Tax was increased for CESTAT (Customs Excise and Service Tax Appellate Tribunal) to ₹60 lakh from ₹50 lakh. For High Courts, the limit was increased to ₹2 crore from ₹1 crore, and for the Supreme Court, the revised limit stood at ₹5 crore, from the earlier ₹2 crore. As a result of these revised limits, it is estimated that around 1,050 cases (CESTAT and Supreme Court: 250 appeals each, High Court: 550 appeals), pertaining to specified legacy Central Excise & Service Tax cases, are estimated to be withdrawn from various judicial forum, the Ministry said.

It also mentioned that all these measures on tax front are expected to significantly reduce the burden of tax litigation and expedite the resolution of tax disputes. In addition, steps have been taken to deploy more officers dedicated to hearing and deciding income tax appeals, particularly those involving significant tax amounts. “These initiatives reflect the government’s commitment to improve the ‘Ease of Living’ and ‘Ease of Doing Business’ across the country by reducing pending litigation,” it said.

Related Topics