Why income-tax cases drag on in high courts

The second of a two-part series on tax litigation looks at the time it takes for high courts to wind up cases

- SACHIN P MAMPATTA

When the Karnataka High Court disposed of a tax case against Texas Instruments in 2020 the ruling could not have come a day sooner for the American chipmaker. It took the court no fewer than 3,403 days to pass its ruling.

That the resolution of the case — the ruling went in favour of the multinational — took nearly 10 years is not unusual in India. There were 14,858 cases that took 10-15 years to resolve across high courts, shows a Business Standard analysis of a database of over 320,000 tax disputes filed between 2000 and 2021 across 23 out of 25 high courts compiled by legal thinktank DAKSH. Another 1,890 took more than 15 years for disposal.

A combination of overburdened courts, misaligned incentives for department behaviour including aggressive revenue targets, and a tendency to treat all cases alike — without prioritising important ones — has resulted in unending timelines, according to experts who say speeding up this process may take some doing.

“Faster disposal would require measures such as more frequent scheduling (of hearings), limiting adjournments, fixing a timeline for each stage of the case, limiting oral arguments, seeking cooperation from both sides,” said Smita Mutt, strategic initiatives lead at DAKSH.