BY TIOL News Service

AHMEDABAD, DEC 28, 2018: THE issue before the Special Bench of the Tribunal is whether stay on recovery of duty demand, can be granted where any delay in disposal of appeal is not attributable to the assessee. The bench also expressed its consternation on the inordinate delay by the Registry in listing matters before Third Members or Special Benches and also for the delay in hearing such matters. The Special bench noted that such delays only served to undermine the purpose, utility & efficacy of such mechanisms.

Facts of the case

On assessment for the relevant AY, duty demand of about Rs 41.8 lakhs was raised. Similar demands were raised for the subsequent AY. Of such amount payable, the assessee paid about Rs 24.5 lakhs. Hence the assessee-company filed the present applications seeking stay on the recovery of the balance duty demanded, as well as on the interest amount payable. The assessee also raised a grievance that while a special bench had been constituted about two years ago, it matter had not yet been taken up for hearing. This left the assessee without any remedy to ensure the quick disposal of its appeal. Thus the Special Bench found it necessary to issue guidelines in this regard, so as to ensure that matter before such authorities are disposed off as soon as possible.

On hearing the application, the Special Bench held that,

++ the sequence of events does clearly shows inordinate delay in the special bench case being taken up. It appears that despite specific requisition by the Judicial Member and for the reasons best known to the persons concerned, the Registry has not taken care to do the necessary follow up and ensure that the matter is listed for hearing expeditiously, so as to ensure timely disposal of appeals referred to the special benches. The importance of timely disposal of special bench cases and Third Member cases can hardly be over-emphasised. These cases deserve to be taken up on top priority basis. Hence such an inordinate delay in fixation of hearing of special benches cases, particularly when stay is granted, is not only inappropriate and contrary to the scheme of the Act, but it does reduce the efficacy and utility of the mechanism of special benches to deal with important matters on which there is divergence of views by the division benches or which are otherwise of wider ramifications and national importance. Similarly, inordinate delays in disposal of Third Member cases, by itself, makes the expression of dissenting opinion less effective and useful. Thus it is fit and proper to formulate guidelines to ensure the expeditious hearing of cases referred to Special Benches and Third Members;

++ (a) Wherever special benches are constituted, the special benches shall, as far as possible, commence hearing within 120 days of the benches being constituted. In the cases in which the respective bench is not in a position to commence hearing of the matter within 120 days for any specific reason, e.g. directions of the Court or blocking the hearing awaiting decision of a higher judicial forum, it shall record the reasons, in brief, for delay in commencement for hearing. Sincere endeavor shall be made for expeditious disposal of Special Bench cases;

(b) It is only in exceptional circumstances that the adjournment may be granted, at the instance of the either party, in Special Benches and Third Member cases, and the hearing of such matters should be scheduled by the registry in due consultation with both the parties. Even when adjournment is granted, it shall not be generally granted beyond 30 days. The learned representatives at the bar are expected to extend their cooperation in this regard. It goes without saying that the intended results in this regard can only be achieved with sincere endeavor and cooperation of all the stakeholders;

(3) These guidelines shall also be followed with respect to Third Member cases, and the Registry will take up the matter with the respective benches, for scheduling the hearing, in terms of these guidelines;

++ in the present case, as the delay in disposal of these appeals is not on account of any lapse on the part of the assessee, and as there is no change in the material facts and circumstances vis-à-vis the material facts and circumstances when the stay was originally granted in this case, the stay on collection/ recovery of outstanding demands of tax and interest, as set out in first paragraph earlier, is extended till 180 days from the date of this order or till the disposal of these appeals.

(See 2018-TIOL-2511-ITAT-AHM-SB)