SC disposes over 500 tax appeals worth less than ₹5 crore in a single day

New Delhi: The Supreme Court on Tuesday disposed over 500 matters of direct tax appeals in a bid to reduce pendency in courts following the Union government's efforts to make such appeals more stringent in the latest full budget.

A government press release said the top court would not hear as many as 573 matters of direct tax appeals as they do not meet the requirements for appeals set in the Union budget for FY25, which were amended in July to reduce the burgeoning pendency of litigation related to income tax disputes.

This "aligns with the government's efforts to reduce tax litigation and promote Ease of Doing Business," the government said in a press release.

In July, the Centre announced new lower limits in monetary terms for income tax cases being appealed in various courts. Previously, litigants could appeal such cases to the Income Tax Appellate Tribunal (ITAT), high courts, or the apex court if they were over ₹50 lakh, ₹1 crore, and ₹2 crore, respectively.

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Now, after amendments in the budget, the ITAT will only hear matters worth over ₹60 lakh, high courts ₹2 crore, and the apex court ₹5 crore. As the above appeals did not meet this criterion, the Supreme Court dismissed them on Tuesday.

Various courts across the country will not have to hear as many as 4,300 such matters due to the change in monetary limits for income tax dispute appeals. The ITAT is expected to be relieved of 700 cases, while high courts will not hear 2,800 cases, and the apex court will not hear 800 cases, the press release said.

The government also revised the monetary limits for legal appeals related to indirect taxes in the latest budget, with the same agenda of reducing pendency. The lower limits for filing appeals before the Customs Excise and Service Tax Appellate Tribunal (Cestat) was revised to ₹60 lakh from ₹50 lakh, that for high courts was revised to ₹2 crore from ₹1 crore, and that of the Supreme Court was revised to ₹5 crore from ₹2 crore earlier. As a result, over a thousand cases related to central excise and service taxes before the Cestat, as well as higher courts will be withdrawn, according to the press release.

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The government has also started the process of deploying more officers to cater to high-value tax litigation cases, the press release said.

Mint reported the judiciary's criticism of delays in tax litigation a week before the announcement of the budget. 

The top court's dismissal abiding by the Union government's amendment of monetary limits in tax appeals followed the ministry of law and justice's efforts to reduce pendency in courts. The law and justice minister Arjun Ram Meghwal told Mint last week the government was conducting an "ageing analysis" to identify cases that were delayed for multiple years, and the reasons for the delay.