M J Antony: Taxmen in slumberland

The SC seems to have launched a drive to nudge revenue officials to file appeals within time limit

Equity aids the vigilant, not those who slumber on their rights, goes a legal maxim. When a citizen is hurt by injustice, it is his duty to seek legal help fast and he normally does so. But, when it is public money that is at stake, no one is in a hurry to claim it. It is so easy to play Kumbhkaran when it is about revenue due to the government.

Generations of judges of the Supreme Court and high courts have been trying to awaken revenue departments to move appeals within the time prescribed in the Income Tax Act or the Limitation Act. Once, a former attorney general was asked to investigate and straighten up the law department. Two decades have gone by without even a yawn from the slumbering mandarins. Even now, a snail can take four rounds of the North Block before the revenue department moves an appeal in the Supreme Court.

Last week, the new Chief Justice of India (CJI), S H Kapadia, ordered investigation into the inordinate delay in filing appeals by the income tax department in at least two gross cases. The time limit has been exceeded by nearly three years in both cases. The stakes involved are to the tune of Rs 2-5 crore. In another case, the solicitor general admitted that the delay was an “elephantine 1,206 days”. Since the reopening of the court, one of the CJI’s singular themes in his observations has been the delay caused by income tax, customs, excise and other departments, which should be prompt in filing appeals when they lose their case in tribunals or high courts. A delay of thousand days does not surprise anyone anymore.

Prodded by the remarks of the court, the solicitor general has taken up the issue with the Central Board of Direct Taxes and the revenue secretary. He has assured the court that he would do his best to solve the problem.

Several statutes prescribe time limits for filing appeals. Section 260-A of the Income Tax Act has a detailed provision prescribing a 120-day limit. The Limitation Act has a schedule setting down the outer limits. The Civil Procedure Code regulates applications for condoning delays in certain circumstances.

However, if the statutes are followed strictly, the public might suffer because they may have genuine difficulties in moving the appellate court. They have to wait for the receipt of certified copies of the judgments, draft new petitions and follow other formalities. In the case of the revenue department, the problem is compounded by the need for examination of the papers by a board, drafting by a panel of lawyers and absence, transfers and promotion of officials dealing with the issue. The quality of lawyers filing and appearing before the courts has also been a subject of the Supreme Court’s criticism. Scores of tax briefs are usually dumped at the last minute on one lawyer, as in the last week.

If the court dismisses government appeals filed after a long delay, the gainers would certainly be tax-dodgers and their friends in high places. Therefore, the court reluctantly responds to the government lawyer’s plea for “condonation” of delay. The judges plonk down such case bundles suppressing their mixed feelings on the subject.

Passing strictures on the guilty departments has had no effect so far. In several judgments in recent times, the court has ordered enquiry and action against officials. A few months ago, the court ordered an enquiry into the conduct of the high functionaries of a state corporation which had caused a delay of four years before asserting its rights by filing an appeal (Oriental Aroma Chemicals vs Gujarat Industrial Development Corporation). The court further ordered that the loss suffered by the corporation should be recovered from the officials who caused the delay.

A year ago, the Supreme Court had asked the Karnataka government to pay Rs 10 lakh for filing an appeal 14 years after an adverse judgment in the State of Karnataka vs Moideen Kunhi case. Kunhi had died fighting the case in the meantime. The court directed the government to take action against “every person responsible for the alleged fraud and delay in pursuing legal remedies, fix responsibility and recover the amount from them”. It further remarked that the delays are “skilfully managed” and it is done to protect unscrupulous litigants at the cost of public interest or the exchequer. In yet another recent case, State of Delhi vs Ahmed Jaan, the court wanted the official who failed to appeal on time to be made personally responsible for the lapse. However, you can trust the fraternity of bureaucrats to overcome such irritants.