The Central Board of Revenue (CBR) has in principle agreed to reduce, in the 2005-06 budget, the time limit from maximum two years to six months, for re-opening of cases by the department after issuance of orders passed by regional collectorates. Official sources told Business Recorder on Saturday that currently the collectors and the Board are empowered to re-open cases to assess the legality of an ''order-in-original'' within two years of passing of such order. This authority is available under section 195 of Customs Act, 1969, section 45-A of Sales Tax Act, 1990 and section 35-E of Central Excise Act, 1944.
On the other hand, the time period for filing of appeal by the litigating taxpayer is 30 or 60 days. The department also has the right to go in appeal within this period against the order passed in favour of the taxpayers. The comparison clearly reflects the disparity between the powers of tax officials who have the authority up to two years for reopening a case, against the taxpayer''s right of appeal for only one or two months.
According to CBR, the additional right of re-opening of cases within the extended period of two years provides undue leverage to the department. Therefore, it is necessary that the powers to re-open cases should be exercised by the department only up to six months of passing of the order-in-original to save the taxpayers from the constant agony.
Moreover, it is also proposed that the order-in-appeals passed by the Collectors (Appeals) should not be subject to re-opening.
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