By TIOL News Service

MUMBAI, MAR 17, 2015: THE Bombay High Court seems to be miffed with the CESTAT, WZB , if one goes by the recent orders passed. Kindly see the decisions in Nidhi Textiles 2015-TIOL-597-HC-MUM-CUS & Rallis India Ltd. - 2015-TIOL-630-HC-MUM-CX.

This unhappiness presumably began with the order passed by the Bombay High Court in the case of Zenith Computers Ltd. - 2014-TIOL-623-HC-MUM-ST when the Bench remarked-

At one time this Tribunal was known for expertise - It was one of best Tribunals and its example was cited even during course of imparting training to Judicial Officers - It is expected that Member (T) and Member (J) work in coordination and in tandem.

Be that as it may, the facts of the present case go thus -

++ An order was passed by the Division Bench wherein on account of difference in opinion between the Members, the matter was referred to the third Member for resolution.

++ Against this order, a rectification of mistake application was filed and which was considered by the same Bench.

++ In dealing with this application as well, the Members differed.

++ One of the Members found that there is a need to rectify certain mistakes in the order, which is dated 20th February, 2014 but pronounced on 12th June, 2014, while the other was of the view that there is no scope for entertaining the application of this nature.

On perusing this order, the High Court commented -

"…, what we find is a very unhappy but at the same time avoidable situation. There was a main order and which was fairly lengthy and elaborate. However, while noting the factual aspects as well, there was difference of opinion between the Members. Mr. P. K. Jain Member (Technical) was of the view that the rectification application deserves to be dismissed, but for his additions which have been made in the main order. The order passed on the (ROM) Rectification of Mistakes Application by this Member runs into 23 pages.

2. The Member (Judicial) thought that even on the rectification of mistakes application, he should pass a separate order and he has passed a separate order, copy of which is to be found from page 353 to 355 of the paper book. He allowed the application, but not for the reasons that have been recorded by his colleague. The Member (Judicial) found that in case where no consideration was given to the issues raised by the litigants during the course of final hearing of the Appeal, it would be appropriate to give an opportunity to the litigants on the said issues. Then, he found that in the order passed by his brother, namely Member (Technical), the mistakes pointed out have been termed as apparent on record, but during the course of said rectification, the Judicial Member was of the opinion that his brother Member (Technical) gave findings which may be in addition to the initial order. Rather they add to the final order and something on which, in his opinion, the parties were not heard adequately. Therefore, on such an application as well, they differed in their views and drew up issues for resolution by a third Member."

The High Court also noted that the third Member had not rendered any final opinion till date and, therefore, although it is reluctant to chart this course, it views that the interest of justice would be served if both the impugned orders are quashed and set aside and it is directed that the main Appeal shall be reheard by the West Zonal Bench of the CESTAT.

The High Court further observed-

"We once again emphasise the need for harmony, coordination and cooperation between the Members of the Bench, particularly in dealing with revenue matters. We expect that hereinafter, the differences of opinion would me minimal. They ought to be on issues and essentially on construction of legal provisions and interpretation of law. With regard to recording of facts and matters in connection therewith, we do not see how Members can repeatedly differ. If the facts are undisputed and agreed upon by parties and they present legal issues for resolution of the Tribunal, then, those deserve prominence. We are also not impressed by the attitude of one Member finding fault with the other while dealing with the contentions of the parties and essentially on facts."

After quashing both the orders and directing that the appeal should be reheard, the High Court opined that the President of the CESTAT would assign the appeal to the Members who had not originally heard the subject Appeal.

The Writ Petition was allowed.

(See 2015-TIOL-644-HC-MUM-CX)