One Case, One Journey in Tax Dispute Resolution

PT Pantang Rugi (let us call it that) is a technology consultancy firm facing an income tax adjustment. The trigger is a difference in interpretation regarding revenue recognition on multi-year service contracts.

The objection filed with the Directorate General of Taxes (DGT) was rejected, and the dispute was brought before the Tax Court. Up to this point, everything appears to follow normal legal procedure. However, for the company, the dispute carries far broader consequences.

Funds must be set aside for potential tax liabilities, investment decisions must be reconsidered and financial recording issues cannot be entirely separated from the outcome of the dispute. Because the business continues to operate, uncertainty in one case may overlap with tax obligations in subsequent periods.

Therein lies an aspect frequently overlooked when we discuss judicial reform: for an institution, a case is an administrative process, whereas for the litigant, a case is a journey that determines the course of its business. This difference in perspective may seem simple, yet it is highly determinative of the quality of a judicial system.

A Case Needs a Conclusion, Not Speed

There is a long-standing legal principle, litis finiri oportet, namely that every dispute must have a path towards resolution (Avriantara, 2024). This principle is reflected in judicial practice that treats a ruling as the final point of an enforcement effort.

In tax cases, for example, the Supreme Court affirms that an application for civil review may only be filed once; an affirmation of the importance of finality in case resolution (Law Number 14 of 1985 on the Supreme Court).

However, that principle is mistaken if interpreted simply as a demand for judges to rule as quickly as possible. The judiciary is not a race to achieve case-completion figures. Judges need time to examine evidence, hear the parties and formulate their reasoning. That time is itself part of justice.

Judicial reform frequently falls into one of two extremes: assuming that all issues may be resolved by expediting the process or conversely assuming that judicial independence implies that nearly all administrative processes lie beyond the scope of reform. Both are incorrect.
Finality also does not mean absolute truth. The law recognises that judges can err and correction mechanisms exist for that purpose. However, without a point at which a case is considered concluded, the pursuit of justice can itself become an endless source of uncertainty.

In the tax context, this issue is felt more acutely because the tax relationship is periodic. A dispute over revenue recognition in one period can have repercussions in the next, such that a single unresolved case can prolong uncertainty across the company's entire tax relationship.

The aspect requiring improvement is not the speed with which judges rule, but rather the journey a case takes before reaching the deliberation chamber. This is where it is important to distinguish two things: judicial substance and case process management.

Judicial substance — that is, the assessment of evidence, legal argument, and reasoning behind a ruling — must remain entirely within the domain of judicial independence as guaranteed by the 1945 Constitution (Article 24 paragraph (1)). No case management system or performance indicator should pressure judges to rule due to administrative pressure.

Conversely, matters such as completeness of files, scheduling, notifications, document management, and tracking a case's position are areas highly open to improvement and that is where reform ought to focus.

The momentum to reorganise this second domain is now present. Constitutional Court Decision Number 26/PUU-XXI/2023 requires the unification of organisational, administrative, and financial oversight of the Tax Court under the Supreme Court, no later than 31 December 2026 (Constitutional Court of the Republic of Indonesia, 2023).

Nevertheless, this unification of roof — referred to as one roof — should not stop at a mere transfer of authority. It needs to be followed by building one architecture: an institutional, process, data, and technology architecture that is mutually interconnected.

One roof serves as the institutional foundation. One architecture serves as the framework for systemic connectivity. Then, one case, one journey becomes the means of ensuring that the entire architecture culminates in a complete case journey whilst preserving judicial independence.

One Case is One Journey

The idea of one case, one journey — a framework the author has developed — is in fact straightforward. A case should not be understood merely as a collection of stages each running independently. In PT Pantang Rugi's journey, there is the registration of the appeal, examination of file completeness, appointment of a judicial panel, trial scheduling, the trial, judicial panel deliberation, and finally the ruling.

Each of these stages has a different person in charge. The issue is not that division of functions per se, but whether all those stages are visible as one journey to the litigant.

A single case ought to have a consistent identity from the time it is registered until it is concluded. This means its history can be traced, its stages can be ascertained and its documents are interconnected, without the litigant needing to understand the institution's internal structure merely to know where their case stands.

Insofar as an organisation evaluates work by unit, each unit may feel it has completed its task. Yet the case itself may still be progressing slowly because no one is observing the entirety of its journey. This is also a matter of digitalisation. There is a tendency to assume that the more applications an institution has, the more modern it is.

In reality, applications do not automatically improve processes. If fragmented legacy processes are simply migrated to a digital system, only the medium changes. Files that once moved physically now move electronically. People who once telephoned to enquire about a case's status now open an application. But if that application does not depict the case's journey in its entirety, the underlying problem remains unsolved.

This approach should begin from the principle of human first — that is, a case is viewed not only from the organisation's perspective, but from the experience, needs, and certainty felt by the litigant. This is where design thinking (Brown, 2008) becomes relevant: understanding the litigant's experience directly, formulating the problems that are actually occurring, and then testing improvements at a controlled scale before full implementation.

In this way, the case journey is designed not merely to fit the institution's internal structure, but to be readily understood and to provide certainty to the people experiencing it. That is the difference between managing activities and managing a case journey.

Transformation should therefore begin not from the system, but from mapping the actual process — an approach commonly known as business process reengineering (Hammer & Champy, 1993). Where does backlog accumulate? What information is repeatedly requested? At which stage do litigants most frequently experience a lack of clarity? Which processes are genuinely necessary, and which are merely vestiges of old procedure?

Only once those questions are answered should technology be designed to support the improved process; not the reverse, digitalising processes that should have been redesigned from the outset.

The same applies to inter-agency data integration. Interoperability does not imply that all data must be accessible everywhere. Data must be available on the basis of authority, relevance, security and the needs of the case. A good system is not one that accesses as much data as possible, but one capable of providing the right data to the right party for the right purpose.

The same holds for artificial intelligence. AI can assist with document retrieval, classification or certain administrative tasks, but must not replace judicial assessment. Rulings remain entirely the responsibility of judges.

The more pertinent question, therefore, is not whether the Tax Court needs to use AI. What matters more is which problems are intended to be resolved through AI, what data is available and how to ensure the results remain accountable.

Reform That Continuously Learns

Transformation must also not cease at the construction of new systems. Every change ought to be treated as something that can be tested, measured and improved, including the rulings themselves. A concluded case ought to form part of institutional memory, so that rulings on similar legal questions can be studied to maintain consistency, identify potential disparities and develop jurisprudence, without diminishing judicial independence.

In the tax context, this capacity for learning also needs to recognise when a set of facts overlaps with fiscal criminal proceedings. What needs to be connected is not the adjudicatory authority, but the relevant facts and history. The aim is for the legal journey to be understood in its entirety without conflating the functions of each process.

That is what ought to be understood as an adaptive tax court: a court that not only possesses digital applications, but is also capable of reading changes in the tax environment, understanding the evolving character of disputes, improving processes on the basis of evidence and using technology responsibly.

Questions of institutional structure remain relevant, particularly amid the broader legal changes currently under way. However, structural change should not be the first reflex whenever a problem arises. Before creating a new structure, it is necessary first to establish where the actual problem lies. Is it in the structure? In coordination? Case management, data, technology, competence or working processes?

If the issue can be resolved through process improvement, not everything requires a new structure. Structure should follow functional need, not the reverse. This principle also means that straightforward cases and complex cases may receive different process support, without diminishing standards of justice and judicial independence.

Ultimately, the success of tax judicial transformation should not be measured solely by the number of applications built or cases recorded as concluded. A more substantive measure lies in the journey of a case itself. Returning to PT Pantang Rugi: the company does not merely need a system that appears modern. It needs a system that gives its dispute a comprehensible path from beginning to end, starting with certainty that its case has been received, then the stages currently underway and what comes next, before ultimately obtaining a ruling arising from an independent and fair audit.

None of this means cases must be decided at the expense of thoroughness. On the contrary, certainty regarding the case journey must be built without diminishing independence in deciding cases.

Litis finiri oportet reminds us that law requires a point of resolution. One case, one journey provides a framework for how the journey towards that point can be managed in its entirety. When a dispute commences, a litigant should not feel they are entering a long corridor full of many doors without knowing which door comes next.

They must see a journey.
One case.
One path.
And, ultimately, one clear point of resolution.

*This opinion article represents the author's personal views and does not reflect the position of the institution where the author is employed.