CBIC raises threshold for filing appeals before CESTAT and courts

The Central Board of Indirect Taxes and Customs (CBIC) has raised the threshold for filing of appeals before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) by ten times to Rs 50 lakh, as it looks to reduce the number of litigations.

The thresholds for appeals in the high courts and the Supreme Court have been doubled to Rs 1 crore and Rs 2 crore, respectively. These thresholds will not apply in matters where the constitutional validity of the provisions of an Act or Rule are being challenged, the CBIC said in an instruction issued on Monday.

The CBIC has also asked officials to withdraw litigations as per the new enhanced limit where applicable and possible.


“The new monetary limits for filing appeals by the revenue (department) will not only reduce litigation in future but will also enhance withdrawals of pending matters falling within the new limits,” said Abhishek A Rastogi, founder of Rastogi Chambers.

The move follows an advisory from the department of legal affairs, asking all ministries to undertake measures to reduce the number of frivolous litigations.

In the Monsoon session of parliament, the law ministry had said that the central government is party to 6.3 lakh court cases and has spent Rs 272 crore on litigation over the last five years.

As of March 31 this year, there were about 80,000 pending cases in CESTAT, with an average pendency of 4-5 years, according to the revenue department.

Officials say that in many cases the cost of litigation is higher than the amount recovered.

"Officials have to file an appeal against an adverse order, but yes, sometimes the amount recovered is less than the amount spent on litigation," a senior official told ET.

The official said that in many cases, the high courts have given adverse comments and have already started rejecting cases.

The move is seen reducing the pressure on the various courts.

The government is also planning to set up a committee to suggest measures to minimise tax litigation and expeditious disposal of backlogged cases.

The Central Board of Direct Taxes (CBDT) had already raised the monetary threshold for filing of appeals before various appellate fora.