ST – Tribunals are meant to render justice and are not established to shut out parties on hyper technicalities: HC
By TIOL News Service
MUMBAI, MAR 02, 2017: A SCN dated 15.12.2010 was issued to the appellant seeking recovery of an amount of Rs.10,53,46,914/- as service tax under the category of 'Supply of Tangible Goods for Use' service for the period 07.07.2009 to 31.03.2010.
Another SCN was issued on 21.10.2011 demanding ST of Rs.10,01,92,523/- under 'Mining Service' for the period 01.04.2010 to 31.03.2011.
The demands were confirmed by the adjudicating authority by an o-in-o dated 11.10.2012.
In the matter of stay application filed before the CESTAT, the Bench ordered a pre-deposit of Rs.5crores and to report compliance by 25.03.3013.
Against this order, an appeal was filed before the Bombay High Court.
While the appeal was pending, since the compliance was not reported, the CESTAT dismissed the appeal without adjudication on merits. This was on 24.05.2013.
In the meanwhile, on similar issue the CESTAT Delhi passed an order on 24-10-2013 in the case of Petronet LNG Ltd. = 2013-TIOL-1700-CESTAT-DEL.
When the appeal came up for hearing on 13.10.2014 before the High Court, noting the decision in Petronet LNG Ltd., the Bench opined that instead of going into the controversy on merits, interest of justice would be served if an opportunity is granted to the appellant to seek a modification of the impugned orders.
When the modification/restoration application was filed before the CESTAT, the Tribunal passed the following order on 31.08.2016 –
| "In the present instance, even though the decision of the Tribunal, viz., Petronet LNG Ltd. v. Commissioner of Service Tax - 2013-TIOL-1700-CESTAT-DEL, may not favour Revenue, but that would be subject to the requirement that the appeal stands restored. The judgments cited by the learned Authorised Representative would place the applicant within the ambit of the amended provisions of section 35F of Central Excise Act, 1944. The predeposit mandated in section 35F of Central Excise Act, 1944 is the same as that directed by this Tribunal on the earlier occasion. We, therefore, do not find any justification for modifying the terms of predeposit. The applicant is directed to deposit Rs.5crores within eight weeks from receipt of this order and report compliance thereafter latest by 15th November 2016 following which the appeal will stand restored and the plea for raising additional ground sought for in the application shall be taken up thereafter." |
And, therefore, the appellant is again before the High Court.
After considering the submissions made, the Bombay High Court observed thus –
++ We find that in this case and the approach as is evident from the above observations is hyper-technical. We are of the opinion and very firmly that Tribunals such as this are meant to render justice and in accordance with law. They are not established to shut out parties on hypertechnicalities.
++ Once the technicalities have to take a back seat on such issues and which have larger repercussions, then, the Tribunals would be well advised not to go ahead and insist on compliance with their procedural directions or their interim orders to such an extent as would make it impossible for the appellants to have disposal of their appeals on merits.
++ Even now what we have found is that the Tribunal insists that, pre-deposit as mandated by Section 35F of the Central Excise Act, 1944 is an order prevailing and binds the assessee. It cannot be recalled even when there are subsequent developments. The Tribunal should be aware that just as it has power to impose conditions while passing interlocutory or interim orders, equally there is an inherent and implicit power to modify them in the event the changed circumstances so demand.
++ This is the principle enshrined in Rule 4 Order 39 of the Code of Civil Procedure, 1908 and which is analogous to larger power to grant interim relief. Hence, a conditional order and that too interim in nature can be modified so as to appropriately suit the ends of justice.
++ Without expressing any opinion on the merits of the Tribunal's order but finding that now the issue is arguable and there are again several Judgments and decisions, we direct the Tribunal to restore the appeal on its file. It should not insist on compliance with any pre-deposit or conditional order or direction. Instead it should hear both sides and adjudicate the appeal on merits and as expeditiously as possible.
The appeal was disposed of.
(See 2017-TIOL-424-HC-MUM-ST)
