2013 (6) TMI 86 - HC - Central Excise

Tribunal dismissed the appeal despite the adjournment sought by the appellant - tribunal refused to adjourn the matter without assigning any proper and cogent reason for not adjourning the matter. - held that - Tribunal has refused to adjourn the mater on 26-12-2012, which has caused great prejudice to the petitioner as the Stay Application could no be argued on merit on behalf of the petitioner and the Tribunal passed ex parte order directing the petitioner to deposit ₹ 40,000,00.00 (Rupees Forty Lacs) within a period of 8 weeks. The order passed by the Tribunal being contrary to the principles of natural justice, is liable to be quashed as direction is liable to be issued for deciding the Stay Application of the petitioner afresh giving opportunity of hearing - decided in favor of assessee.

Summary

Issues:
Challenge to order of Customs Excise and Service Tax Appellate Tribunal (CESTAT) on Stay Application due to absence of authorized representative leading to ex parte decision and pre-deposit requirement.

Analysis:
The High Court considered the writ petition challenging the CESTAT's order dated 26-12-2011, which decided the petitioner's Stay Application in absence of the authorized representative. The petitioner had informed the Tribunal about the absence of their Chartered Accountant, Mr. Hardik P. Shah, due to being out of station, requesting an adjournment. However, the Tribunal refused to adjourn the matter without providing proper reasons, leading to an ex parte decision directing the petitioner to deposit Rs. 40,000,00.00 within 8 weeks.

The Court noted that the Tribunal's refusal to adjourn the matter caused prejudice to the petitioner as the Stay Application could not be argued on merit. The Court found this action contrary to the principles of natural justice. It was emphasized that the authorized representative should have been given a chance to be heard, especially when out of station. The Court highlighted that the Tribunal's decision was liable to be quashed due to the denial of a fair hearing.

Consequently, the High Court allowed the writ petition, setting aside the CESTAT's order dated 26-12-2011. The Tribunal was directed to schedule a new hearing for the Stay Application, ensuring that Mr. Hardik P. Shah, the Chartered Accountant representing the petitioner, gets an opportunity to present the case. The Court instructed the Tribunal to decide the Stay Application afresh, following the principles of natural justice and passing an appropriate order in accordance with the law. The rule was made absolute accordingly, granting relief to the petitioner.