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Introduction of concept of mediation and Advance Ruling System for Residents to reduce tax litigation and more clarity 2020 (9) TMI 496 - Supreme Court -

Extract

..... Government will be benefitted? 2. The aforesaid position resulted in a judicial innovation with the Supreme Court passing orders in Oil and Natural Gas Commission & Anr. v. Collector of Central Excise [1991 (10) TMI 58 - Supreme Court] requiring that such cases must be referred to a Committee to be appointed by the Government to facilitate a resolution of such disputes and that no case should be filed without the approval of this Committee. This system was a failure as is apparent from the facts of the present case, where the SLP filed by the appellant-Corporation was initially dismissed with liberty to revive the same in case the High Powered Committee granted such a permission which was so granted in a meeting held on 14.08.2009. The .....

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Introduction of concept of mediation and Advance Ruling System for Residents to reduce tax litigation and more clarity 2020 (9) TMI 496 - Supreme Court -

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..... . Undoubtedly, this is complete wastage of judicial time and in various orders of this Court it has been categorized as “certificate cases”, i.e., the purpose of which is only to obtain this certificate of dismissal. 5. The 126th Law Commission of India Report titled ‘Government and Public Sector Undertaking Litigation Policy and Strategies’ debated the Government versus Government matters which weighed heavily on the time of the Courts as well as the public exchequer. This was as far back as in 1988. It was only in the year 2010 that the National Litigation Policy (for short ‘NLP’) was formulated with the aim of reducing litigation and making the Government an efficient and responsible litigant. Five (5) .....

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Introduction of concept of mediation and Advance Ruling System for Residents to reduce tax litigation and more clarity 2020 (9) TMI 496 - Supreme Court -

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..... s belong to the same Ministry/Department, the Committee will comprise Secretary of Administrative Ministry/Department concerned; the Secretary, Department of Legal Affairs and the Secretary, Department of Public Enterprises. If a dispute is between a CPSE and a State Government Department/Organisation, the Committee will comprise of the Secretary of the Ministry Department of the Union to which the CPSE belongs, the Secretary, Department of Legal Affairs and the Chief Secretary of the State concerned. Such disputes are ideally to be resolved at the first level itself within a time schedule of three (3) months, and in the eventuality of them remaining unresolved, the same may be referred to the Cabinet Secretary at the second level, whose de .....

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Introduction of concept of mediation and Advance Ruling System for Residents to reduce tax litigation and more clarity 2020 (9) TMI 496 - Supreme Court -

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..... tion matters. The petition rate of the tax department before the Supreme Court is at 87%. - See ‘Economic Survey 2017-19 - Volume 1’ by the Department of Economic Affairs, Ministry of Finance, Government of India So, the question is can something be done about it? 11. In our opinion, a vibrant system of Advance Ruling can go a long way in reducing taxation litigation. This is not only true of these kinds of disputes but even disputes between the taxation department and private persons, who are more than willing to comply with the law of the land but find some ambiguity. Instead of first filing a return and then facing consequences from the Department because of a different perception which the Department may have, an Advance Rul .....

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Introduction of concept of mediation and Advance Ruling System for Residents to reduce tax litigation and more clarity 2020 (9) TMI 496 - Supreme Court -

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..... can seek the same for issues having a substantial tax impact. Chapter XIX-B of the IT Act deals with advance rulings and it has been defined in Section 245N(a) of the IT Act. These rulings are binding both on the Income Tax Department and the applicant, and while there is no statutory right to appeal, the Supreme Court has held in Columbia Sportswear Company v. Director of Income Tax Bangalore [2012 (8) TMI 105 - Supreme Court] that a challenge an advance ruling first lies before the High Court, and subsequently before the Supreme Court. The advance ruling may be reversed in the event a substantial question of general public importance arises or a similar question is already pending before the Supreme Court for adjudication. 13. The ground .....

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Introduction of concept of mediation and Advance Ruling System for Residents to reduce tax litigation and more clarity 2020 (9) TMI 496 - Supreme Court -

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..... erance of a tax friendly face-less regime! 16. We may refer to the international scenario where there has been an incremental shift towards mature tax regimes adopting advance ruling mechanisms. The increase in global trade puts the rulings system at the centre-stage of a robust international tax cooperation regime. The Organisation for Economic Cooperation and Development (for short ‘OECD’) lists advance rulings as one of the indicators to assess trade facilitation policies, making it an aspirational international best practice standard. For example, Australia and New Zealand have a robust system of advance rulings wherein the decisions (which are public rulings affecting a large number of taxpayers) are given teeth by being ma .....

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Introduction of concept of mediation and Advance Ruling System for Residents to reduce tax litigation and more clarity 2020 (9) TMI 496 - Supreme Court -

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