Possibility of Alternative Dispute Resolution System in Indian Direct Tax Disputes

Abstract

Taxation is one of the major revenue sources for the government. Taxes must be collected without any delay, government should focus on the scrutiny of the returns filed by the taxpayers rather than on litigation. The government is the major litigator when it comes to tax disputes in India. This tends to create hesitation in the minds of investors and companies to invest in our country. Many stages of litigation, from the Assessing Officer to the Supreme Court, have this problem. To curtail the same, the introduction of mandatory Alternative Dispute Resolution, viz., Arbitration, Mediation, Settlements, like in other branches of law, is needed in tax disputes, as an external adjudicatory forum rather than within the revenue department. Countries like the UK and the USA have been successful in adopting this method in their tax adjudication. This dissertation examines the possibility of resolving tax disputes in India by adapting ADR methods. Keywords: Direct Tax Litigation, ADR in Tax Disputes, Mediation & Arbitration in Tax Disputes.