'Frivolous Cases Waste Judicial Time' : Supreme Court Raps Income Tax Dept For Filing SLP On Settled Issue

The Supreme Court on Friday pulled up the Income Tax Department for filing yet another Special Leave Petition (SLP) in a matter already settled by the Court, calling it a frivolous exercise that contributes to mounting pendency.

A Bench of Justice BV Nagarathna and Justice R Mahadevan was hearing an SLP challenging a Karnataka High Court order on tax deduction at source (TDS) liability, an issue the Supreme Court had already decided last year in a case involving Vodafone Idea, holding that payments made to non-resident telecom operators were not liable for TDS.

When the matter was called out, Justice Nagarathna questioned why the Department had filed the present SLP despite the Court dismissing an earlier petition arising from the same High Court order.

“Despite that order, why is this SLP filed?” she asked.

Counsel for the Department submitted that they had advised against filing the appeal, but the Department insisted on doing so on the ground that a review petition against the earlier judgment was pending. “We advised them correctly,” counsel said.

Justice Nagarathna responded that the Court would record its displeasure in the order to “send a message.”

In its order, the Bench noted:

“We fail to understand why the Department is continuously filing SLPs despite the order passed earlier by this Court following the decision in Engineering Analysis Centre for Excellence Private Limited v. CIT. Once an SLP has been dismissed by the Supreme Court based on an earlier judgement of the Supreme Court, there ought not to be any more petitions filed by the department which will include any case be dismissed based on the earlier judgement of this court. Filing such frivolous cases would only add to the pendency of this Court and lead to docket explosion and unnecessary wastage of judicial time.”

The Court further recorded that the review petition against the earlier judgment had already been dismissed by a three-judge Bench, making the Department's insistence on fresh litigation even more untenable.

Expressing strong disapproval, Justice Nagarathna, after dictating the order, observed: “Matter filed, dismissed. What is this? Statistics purpose? If you are seeking the same thing, no SLP should be filed.”

The Bench added that once an SLP has been dismissed based on a binding judgment, no further petitions should be filed by the Department in other assessees' cases on the same issue.

Justice Nagarathna instructed counsel to convey these remarks to the Department, noting that repeated filings show an absence of a coherent litigation policy.

“Once a matter is unsuccessful, the Department goes on filing cases in every assessee's case. How can you persuade us to think otherwise?” she asked.

When counsel said the Department follows a monetary-limit policy, Justice Nagarathna responded, “No no, please convey this to the Department with your opinion.”