CBDT monetary limit for tax appeals applied retrospectively, but later-added exceptions operated only prospectively.

The CBDT circular dated 11 July 2018 enhanced the monetary limit for filing tax appeals and expressly applied to pending appeals, so appeals below the revised threshold were to be withdrawn or not pressed. The later letter dated 20 August 2018 introduced additional exceptions, including cases involving information from specified enforcement agencies, but those exceptions were held to operate prospectively only because no retrospective effect was stated and the earlier retrospective clause was not amended. Appeals instituted before 20 August 2018 and not covered by any then-existing exception were therefore not maintainable on account of low tax effect.

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Issues: Whether the enhanced monetary limit introduced by the CBDT circular dated 11 July 2018 applied to pending appeals, and whether the exceptions subsequently added by the letter dated 20 August 2018 could be applied retrospectively to appeals instituted before that date.

Analysis: The CBDT circular dated 11 July 2018 increased the monetary limit for filing tax appeals and expressly stated that it would apply retrospectively to pending appeals, while pending appeals below the specified limit were to be withdrawn or not pressed. The later modification introduced by the letter dated 20 August 2018 added new exceptions, including cases based on information from specified enforcement agencies. The modified exceptions were held not to operate retrospectively, because the letter gave them effect only from the date of issue and did not amend the earlier retrospective clause governing monetary limits. The appeals in question had been instituted before 20 August 2018 and did not fall within any exception then in force.

Conclusion: The enhanced monetary limit applied to the pending appeals, but the later-added exceptions did not apply retrospectively. The appeals were therefore not maintainable on account of low tax effect and stood disposed of accordingly.

Final Conclusion: Revenue appeals below the applicable monetary threshold were treated as not fit for continuation, and the questions of law were left open.

Ratio Decidendi: A CBDT circular increasing monetary limits for tax appeals may apply retrospectively to pending appeals where so stated, but exceptions introduced later operate only prospectively unless expressly given retrospective effect.

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