Supreme Court disposes of 573 direct tax cases under revised monetary limits

It aligns with the government's efforts to reduce tax litigation and promote Ease of Doing Business.

In a major step towards reducing tax litigation, the Supreme Court on September 24 disposed of 573 direct tax cases where the tax effect was less than Rs 5 crore. This move is aligned with the revised monetary thresholds for filing tax appeals, which were introduced in the Union Budget 2024-25.

The Union Budget 2024-25 enhanced the monetary limits for filing appeals related to direct taxes, excise, and service tax in various judicial forums. The limits were raised to Rs 60 lakh for the Income Tax Appellate Tribunal (ITAT), Rs 2 crore for the high courts, and Rs 5 crore for the Supreme Court. Following these changes, the Central Board of Direct Taxes (CBDT) and Central Board of Indirect Taxes and Customs (CBIC) had issued the necessary orders to implement these amendments.

“This significant milestone aligns with the government's efforts to reduce tax litigation and promote Ease of Doing Business,” the Finance Ministry said in a statement on Tuesday.

The enhanced thresholds are expected to result in the withdrawal of around 4,300 cases from different judicial forums over time including 700 cases from ITAT, 2,800 cases from high courts and 800 cases from the Supreme Court.

On the indirect tax front, the limits for filing appeals in legacy central excise and service tax cases were similarly raised to Rs 60 lakh for Customs Excise and Service Tax Appellate Tribunal (CESTAT), Rs 2 crore for high courts, and Rs 5 crore for the Supreme Court. As a result, an estimated 1,050 cases are set to be withdrawn, with 250 appeals from the Supreme Court, 550 appeals from high courts, and 250 appeals from CESTAT.

“These measures are expected to significantly reduce the burden of tax litigation and expedite the resolution of tax disputes,” the ministry added, emphasising the focus on simplifying tax procedures and minimising litigation.

The Finance Ministry also highlighted the deployment of additional officers dedicated to hearing and resolving cases, particularly those involving substantial tax amounts. This is a clear indication of the government's efforts to create a more conducive business environment and enhance taxpayer services.