By TIOL News Service

CHENNAI, JUNE 08, 2016: PETITIONER challenged stay order of CESTAT in Writ Petition. Department cited the decision of Division Bench of the High Court in Metal Weld Electrodes Vs. CCE  - 2013-TIOL-865-HC-MAD in which High Court relied on the decision of the Supreme Court in RajkumarShivhare Vs. Assistant Director, DoE and contended that Writ Petition is not maintainable in view of alternative appeal remedy.

Petitioner argued that as against certain stay orders, no substantial question of law can be raised and that in such circumstances, only a writ petition could be maintained.

After hearing both sides, the High Court held that the opinion expressed by the Division Bench in Metal Weld Electrodes that writ petition is not maintainable, cannot be accepted for two reasons.

First reason is that in Raj kumar Shivhare case the Supreme Court - 2010-TIOL-29-SC-FEMA has carved out certain exceptions where writ petitions are maintainable. Therefore, the Court held that reading of RajkumarShivhare by the Division Bench in Metal Weld Electrodes may not be fully correct. The second reason is that the question referred to the Bench having been answered in para 80, the opinion expressed by the High Court para 81 is a corollary to what was recorded regarding appellate remedy.

The Court further held that a judgment is a precedent for what it lays down and not what follows out of it.

Accordingly, the Court relied on RajkumarShivhare decision and held that in exceptional circumstances writ petition is maintainable against orders passed by CESTAT in Stay Applications. However, the Court held that such writ petitions cannot be posted before Single Judge and that these Writ Petitions should be posted only before the Division Benches dealing with tax cases.

Finally, the Court held that the Tribunal has passed a conditional order directing pre-deposit without considering any of the grounds pleaded, though raised by the writ petitioner. Accordingly, the Court allowed the Writ Petition and set aside the impugned order and directed the Cestat to hear application for pre-deposit.

(See 2016-TIOL-1096-HC-MAD-ST)