The author lashes out at the tax department for stonewalling the sincere efforts of the Court to reduce the arrears of tax matters by seeking repeated adjournments. He points out the problem areas and also outlines practical suggestions to help the department overcome its perennial drawbacks.
City of Mumbai contributes 40% of Direct Taxes revenue to Government of India. Also more than 40% of tax litigation is from the city of Mumbai. Significantly more than 70% appeals and references pending before the Bombay High Court are from the Revenue. It is on record that more than 4,000 tax appeals were filed late necessitating condonation of delay first before the matter can be taken up for hearing. To reduce the pendency of notices of motions filed by the tax department the Hon’ble Chief Justice of Bombay High Court allotted the work to eight tax benches. Tax Bar is of the considered view that by end of August at least all the notices of motions may be disposed of. More than 2,000 Tax appeals were pending for admission since 2002. To reduce the pendency, all tax appeals have been allotted to four tax benches. Tax Bar has made representation to the Hon’ble Chief Justice to have only one tax Bench dedicated to direct taxes and one tax bench for other taxes. Hon’ble Chief Justice has agreed with the view of the Tax Bar and constituted a tax bench only for hearing tax appeals and references and it is working very satisfactorily and is able to dispose large number of tax appeals and references. However, the Bar is of the considered view that instead of having four tax benches, if all pending notices of motion, tax appeals are transferred to one tax bench which is hearing the tax appeals and references, the disposal will accelerate and it will also help the tax administration to improve co-ordination and effective representation. This will prevent the embarrassing situation of different Benches taking different view in respect of identical issue.