Tax litigations mostly get settled at the level of Tribunals - ITAT in case of direct tax, and CESTAT/VAT/CSTAA in case of indirect taxes. Appeals from the Tribunals to High Court/Supreme Court mostly get upheld by these courts. Therefore, the real tax litigation happens at the Tribunal level. Interestingly, the direct tax litigation space before the quasi judicial authorities and the ITAT is largely CA driven for two primary reasons: (I) they have the client’s file and are reluctant to engage a lawyer: and (ii) CAs generally have a better grip on the issues arising out of tax compliances as they are directly involved in the compliances and have been trained to prepare books of accounts and undertake audits. For these reasons you will rarely see a lawyer solely involved with direct tax litigation. 90% of the appearances before the ITAT is by CAs.

On the other hand, Indirect tax litigation space is mostly driven by lawyers as the issues are less procedural/compliances and more substantive in nature. Further, indirect tax litigation is broad as it covers GST, VAT (alcohol and petroleum), central and state excise, customs, and trade remedies. Indirect tax laws in India mostly mirror the indirect tax laws in countries such as Australia, Canada, EU, etc and hence have a universal colour. This makes a practitioner geographically mobile.

Also, while Delhi is the hub for tax litigation given the presence of the Tribunals and quasi judicial bodies and the Supreme Court. Bombay and Bangalore can also be considered as there’s a huge demand for good tax lawyers in these places.

Tbh now in GST compliance is becoming a damn headache, GSTR-1,3B,9,9C. Reconcile this, reconcile that. Even a lot of notices that come these days are differences between two different data points. R1-3B, TDS 3B etc. god save this mundane cantankerous field. Idk how and what level litigation will be there in valuation,classification & place of supply. There is like peak doom and gloom about the future of IDT practice atleast with people I've been talking to.

You talk about GST compliances in response to a question on tax litigation. Compliance of any kind, including tax, is boring. Thankfully tax compliances are done by CAs and not lawyers. GST litigation mostly involves issues related to taxability, classification, applicable rate, exemption, valuation, credit, refunds, etc. Then there’s Customs, Excise, VAT, Trade remedies, WTO disputes. In case of direct tax, the issues involve determination of income, expenses, TDS payment, valuation/TP, etc. When VAT was introduced, it was said that the litigation will come down. The reality was it only increased. Concepts related to Customs law, export controls, trade remedies, VAT/GST are largely same across jurisdictions.
Just consider this: partners/counsel working at law firms doing direct tax work are invariably CAs (with law degree from CCS), but partners/counsel in indirect tax practice are mostly lawyers. The same pattern is reflected at the bar too!

OP here: Do you see idt litigation growing with time to come, and lawyers having greater role, especially with gst litigation given the tribunal would be set up soon?

I've interned in idt and dt, and I liked both hence on litigation, am unsure and could really use advice, thanks!

I'll just speak on GST since I am in it & yes I do compliance work since that's how I get clients initially. Barring 2A-3B notices & 16(4) it is difficult to see really heavy litigation in the future. In the past issues like classification l, valuation etc. were taken up post department audits. These days automation and digitization means notices are (near) automatically generated on a comparison of two data points like say e-way bill & 3B, 2A-3b etc. given the level of automation and standardization it is difficult to see whether GST will generate the same level of litigation like the erstwhile laws.

It will increase. Don't worry. Today, the department assessment is nothing but number matching exercise so that's how the litigation till now are only on that. The disputes on legal issues have not progressed much. Once they start, there will be more work. Plus once the judgments start coming, it'll generate more advisory work to address these litigations. And last, once judgments start coming in public domain, once the GSTAT starts functioning, every oddball judgment will start snowball effect with notices being issued basis that, which may ultimately get dropped but will generate professional work.

Some comments:

1. Indirect tax laws don't really mirror other countries and doesn't make you mobile. In tax, transfer pricing is uniform amd will make you mobile, followed by international tax then other part of direct tax and then Indirect tax.

2. CAs are present in both DT and IDT with good hold. However, lawyers are also present in both. With GST, there's a lot of data related litigations, so are better handled by person who did compliance.