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NEW DELHI : The Supreme Court on Friday urged the Union government to expeditiously put in place an electronic monitoring system to track tax litigation, observing that such a tool is necessary to provide a business-friendly climate.

A bench of justices Dhananjaya Y. Chandrachud and M.R. Shah said that it has become necessary to have a system where all direct and indirect litigation involving the revenue arm of the central government is monitored to track the movement of cases between tribunals and courts.

“A technological tool to monitor revenue proceedings and litigation at all levels will ultimately subserve the legitimate interests of the government. Bring all the procedures of adjudication under one net so that the government is able to monitor its litigation very efficiently. This is for the benefit of the entire nation and for the revenue," the bench told solicitor general Tushar Mehta, who appeared for the Union government.

The court emphasized that having a monitoring system will also ensure a more friendly adjudication process.

“This will also subserve the intent of the government that it is taking into account the interest of the business community. Such a technological solution will help further the government’s intent to provide a business-friendly climate in the country," added the bench.

The Supreme Court added that the entire revenue network has to be integrated, and a robust technological system has to be there, especially after the goods and services tax (GST) regime was implemented.

The Supreme Court, while hearing an appeal by the revenue department in February, noted gross delays in appeals being filed in indirect taxation and asked the Union government to ensure that matters that are required to be litigated are litigated with all necessary dispatch, and matters not worthy of being pursued are set to rest.

There was a delay of more than 500 days in filing the appeal against the decision of the tax tribunal and the tax effect was over 66 crore.

Solicitor general Mehta assured the bench that a proposal incorporating technological modalities has been under consideration by the stakeholders to evolve a system of monitoring the revenue cases at all levels of the courts and tribunals.

On Thursday, Mehta agreed with the bench that the proposition to have a robust system was well-meaning, adding deliberations were on to integrate Legal Information Management and Briefing System (LIMBS) with the e-office system of National Informatics Centre (NIC) to ensure that once a judgement is pronounced in any court, processing of the same starts immediately on the e-office system.

Mehta pointed out that while LIMBS captures the lifetime of every litigation from the filing of the petition to final orders, it does not capture the processes between the order in the lower court and the decision to challenge or not challenge the order in a higher forum.

“Therefore, integrating LIMBS with NIC, which is widely used in government offices for file management, will enable the decision-making process to be monitored electronically and red-flag cases that are in the process of getting delayed," Mehta added.

At this, the top court suggested that a committee dedicated for the purpose of setting up the technological module should be formed to ascertain quick action.

“Let there be a committee, which can apply its mind. The idea is to push the government," it remarked.

The solicitor general said that he would come back with instructions on 27 August when the case is next heard in the top court.

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