By TIOL News Service

CHENNAI, NOV 21, 2016: THE assessee filed a Writ Petition challenging the Order in Original passed by the respondent Commissioner. Though they have alternative remedy of filing an appeal, the assessee challenged the Order in Original on two grounds ( i ) the Adjudicating Authority relied on an order passed by the Tribunal which has already been set aside by the High Court and (ii) inordinate delay in passing the impugned order after conclusion of hearing.

After hearing both sides, the High Court held:

+ The Bombay High Court while considering the correctness of the decision of the Tribunal in the case of Suzlon Infrastructure (relied on by the Adjudicating Authority), has set aside the judgment of the Tribunal on the ground of delay. Since the order was passed by the CESTAT, after six months from the date of concluding the hearing of the appeal and the Tribunal did not specifically deal with vital issues, which have been pointed out by the appellant before the Bombay High Court and as well the directions given by the High Court in the earlier round of litigation, the said judgment was set aside and the matter was remanded to the CESTAT for fresh consideration. Thus, the basis of the finding rendered by the respondent by relying upon a decision of the Tribunal in Suzlon Infrastructure has been effaced by the order of the High Court. Therefore, the decision in the case of Suzlon Infrastructure, based on which the impugned order was passed, was no longer available for the respondent to rely upon, as the Bombay High Court, as early as on 5.9.2012 has set aside the judgment. Thus, to rely upon an order of the Tribunal, which has been set aside much earlier, undoubtedly it is an error apparent on the face of the order passed by the respondent. This is sufficient to hold that the impugned order is unsustainable.

+ The second aspect is with regard to delay. The respondent is bound by the Circular issued by CBEC. In the impugned order, there is no finding recorded by the respondent as to why the Circular was not adhered to and why the order was not passed within atleast one month after the conclusion of the personal hearing. It may be true that the delay by itself cannot be a ground to set aside the order, but if the assessee is put to prejudice on account of the delay, then it is a good ground to interfere with the order passed by the lower authority. However, in this case, this Court is not inclined to test the correctness of the order on the ground of delay, since this Court is satisfied that the impugned order is not sustainable, for the other reason, namely by relying upon an order of the Tribunal, which has been set aside, it is sufficient to hold that the impugned order is unsustainable and the matter requires fresh consideration.

(See 2016-TIOL-2818-HC-MAD-ST)