By TIOL News Service

HYDERABAD, MARCH 20, 2018: ECIL, the writ petitioner, was visited with two Orders-in-Original dated 21.10.2014 passed by the Assistant Commissioner of Customs and Central Excise, Hyderabad, holding it liable to pay interest u/s 11AA of the Act of 1944.

Appeals against such orders had to be filed within sixty days ordinarily and the appellate authority was empowered to condone delay only up to thirty days thereafter, provided sufficient cause was shown.

However, the petitioner filed appeals before the Commissioner(A) on 02.02.2016 along with applications for condoning the delay.

By separate orders dated 31.05.2016, the Commissioner (Appeals) opined that he could not condone the delay beyond the prescribed extended period of thirty days and dismissed the appeals on the ground of limitation.

The CESTAT, by a common order dated 03.01.2017, affirmed the orders of the Commissioner (Appeals) opining that there was no infirmity therein, as per the law laid down by the Supreme Court in SINGH ENTERPRISES - 2007-TIOL-231-SC-CX.

The petitioner company then filed writ petitions in the High Court of Hyderabad assailing the Orders-in-Original dated 21.10.2014.

The Division Bench of this Court had held [in M/s. RESOLUTE ELECTRONICS PVT. LTD. - 2015-TIOL-846-HC-AP-CUS and STAR ENTERPRISES - 2015-TIOL-738-HC-AP-ST that a writ petition under Article 226 of the Constitution would not lie against an Order-in-Original passed under the CEA, 1944, once the statutory remedy of appeal against the said order stood foreclosed by the law of limitation.

Taking note of a contrary judgment of a Full Bench of the Gujarat High Court in PANOLI INTERMEDIATE (INDIA) PVT. LTD. - 2015-TIOL-1556-HC-AHM-CX-LB, the Division Bench made the reference on the question of maintainability of these writ petitions.

The Full bench of the High Court, inter alia, observed -

+ Constitutional power of judicial review vesting in this Court under Article 226 cannot be whittled down or be made subject to statutory restrictions and parameters prescribed in the context of the remedies provided thereunder. It is only by way of self-imposed restraints that this Court sometimes refuses to exercise its discretionary jurisdiction under Article 226 of the Constitution in a given case.

+ Tribunal traces its origin to Article 323B of the Constitution. Exercise of writ jurisdiction under Article 226 vis-a-vis the subject matter of adjudication before Special Tribunals constituted under Article 323B of the Constitution fell for consideration before the Supreme Court in L.CHANDRA KUMAR - 2002-TIOL-159-SC-CB. Holding that such Tribunals were not substitutes for the writ Court exercising jurisdiction under Article 226 of the Constitution, a Constitution Bench of seven Judges again reiterated that the power of judicial review vesting in the High Court under Article 226 is integral to and an essential feature of the Constitution, forming part of its basic structure.

Noting that in the case of PANOLI INTERMEDIATE (INDIA) PVT. LTD (supra), a Full Bench of the Gujarat High Court had occasion to consider the issue of maintainability of a writ petition in identical circumstances and which decision (was followed in PHOENIX PLASTS CO. 2016-TIOL-905-HC-KAR-CX), the Bench while concluding that it is in complete agreement with the said full bench decision, also observed -

++ It is, therefore, manifest that the power of judicial review vesting in this Court under Article 226 of the Constitution cannot be diluted or shut out by applying statutory prohibitions and restrictions. In consequence, the observations of the Division Bench in M/s. RESOLUTE ELECTRONICS PVT. LTD. and STAR ENTERPRISES that no Court of law, including the High Court in exercise of its jurisdiction under Article 226 of the Constitution, can entertain the matter when the statutory appellate remedy under the Act of 1944 is barred by limitation and that the writ Court is debarred from entertaining a challenge to the Order-in-Original which has attained finality, by applying the principle of res judicata, do not constitute good law.

++ The High Court would necessarily take note of the fact that the writ petitioner who seeks to assail the validity of such an Order-in-Original lost out on invocation of appellate remedies due to delay, intentionally or otherwise, and exercise its discretion judiciously on the facts of that individual case to decide as to whether challenge made by such a writ petitioner should be entertained. The length of the delay on the part of the petitioner in filing a writ petition may be one of the crucial factors that would weigh with the Court as it would not be open to a person aggrieved by an Order-in-Original to sleep over the same for years together and then seek to challenge it. Further, various other aspects on facts may also weigh upon the writ Court in deciding whether or not the writ petition should be entertained.

++ Ultimately, what would weigh with this Court is whether gross injustice would result from non-consideration of the challenge sought to be laid against the Order-in-Original. It is for the Court to decide, on the facts of each individual case, as to whether it should entertain the writ petition or not and this discretion cannot be shackled at this stage by laying down any straightjacket formula or conditions.

+ A writ petition would lie against an Order-in-Original, against which an appeal was filed and dismissed as time-barred or no appeal had been preferred as it would have been time-barred, provided sufficient grounds are made out warranting exercise of the power of judicial review under Article 226 of the Constitution. In this regard, it would also not be necessary for the writ petitioner to assail the orders, if any, dismissing his appeals as time-barred, be it by the appellate authority or the Tribunal, in the event he chose to invoke such appellate remedies.

In fine, the reference was answered holding that the decisions in M/s. RESOLUTE ELECTRONICS PVT. LTD. and STAR ENTERPRISES do not constitute good law.

The reference was answered accordingly.

(See 2018-TIOL-484-HC-AP-CX-LB)