Arbitrary or excessive tax results in "social injustice" by a government:CJI

Chief Justice of India S A Bobde on Friday said arbitrary or excessive tax results in "social injustice" by a government, adding tax should be collected from people like honey bee draws nectar from flowers without harming it.

Justice Bobe, whose comments came just a week ahead of the General Budget, also made a case for speedy resolution of tax disputes, saying it will act as an incentive for tax payers and free the funds locked in litigation.

"While tax evasion is a social injustice to the fellow citizens, arbitrary or excessive tax also results in social injustice by a government," the CJI said at the 79th foundation day celebrations of the Income Tax Appellate Tribunal.

"Tax should be collected from people like honey bee draws nectar from flowers without harming it," he said and referred to ancient taxation laws in India.

The CJI said tax judiciary plays a very important role in resource mobilisation of the country and expressed concern over pendency of cases.

"A just and speedy dispute resolution is perceived as a tax incentive by the taxpayer. To the tax collector, an efficient tax judiciary assures that demands arising out of legitimate assessment are not strangled in delayed litigation," the judge said.

The pendency of appeal cases related to indirect taxes in the Supreme Court, High Court and CESTAT has reduced 61 per cent to 1.05 lakh in almost two years.

According to official data, total pendency of appeals at the Supreme Court, High Court and CESTAT (Customs Excise and Service Tax Appellate Tribunal) as on June 30, 2017, was 2,73,591, whereas the same significantly came down to 1,05,756 as on March 31, 2019, a reduction of 61 per cent.

With regard to direct taxes, as many as 3.41 lakh cases were pending before commissioner (appeals), while 92,205 cases were pending before the Income Tax Appellate Tribunal (ITAT) as on March 31, 2019.

Asked about setting up more tribunals for reducing pendency in High Courts and lower judiciary, the Chief Justice said, "You have to be careful that we don't only transfer pendency."