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2014 (1) TMI 972 - HC - FEMAImposition of penalty - Contravention of the provisions of Section 9(1)(b) and 9(1)(d) - Tribunal rejected assessee s petition for waiver of penalty - Held that - challenge made by the petitioner to the impugned order, does not stand to legal scrutiny. Except by contending that the earlier Appellate Board had orally allowed the petition for waiver of pre-deposit, the petitioner is not able to prove to the satisfaction of the Court that there was such an order in existence. It must also be noted that FEMA is a complete Court by itself and the question of challenging the Tribunal s order in a writ petition under Article 226 of the Constitution of India, will not arise - Act cannot be bypassed and the jurisdiction under Article 226 of the Constitution of India cannot be invoked - Decided against assessee.
Issues:
Challenge to order passed by Appellate Tribunal for Foreign Exchange, waiver of pre-deposit of penalty, financial constraints pleaded by petitioner, jurisdiction under Article 226 of the Constitution of India, statutory remedies under Foreign Exchange Management Act, 1999 (FEMA), availability of alternative remedies. Analysis: 1. Challenge to Appellate Tribunal Order: The petitioner challenged the order passed by the Appellate Tribunal for Foreign Exchange, seeking to set aside the order dated 01.07.2010 in Appeal No.488/1994. The Tribunal had imposed a penalty of Rs.40,00,000 against the petitioner for contravention of FERA provisions. The petitioner's appeal was taken on file as FERA 488/1994, and he requested waiver of pre-deposit of the penalty. However, the Tribunal held that the financial constraints pleaded by the petitioner were not valid and directed the petitioner to make the balance penalty payment within 30 days, failing which the appeal would be dismissed. 2. Waiver of Pre-Deposit of Penalty: The petitioner contended that the waiver of pre-deposit of penalty was orally allowed by the Appellate Board, but subsequent proceedings were not clear. The petitioner argued that a fresh notice issued after several years contradicted the earlier understanding. However, the Court emphasized that no Tribunal can pass oral orders, and the petitioner should have applied for and obtained a written order copy. The Tribunal's decision not to waive the pre-deposit was upheld. 3. Jurisdiction under Article 226 of the Constitution: The petitioner invoked Article 226 of the Constitution of India to challenge the Tribunal's order. The Court clarified that FEMA is a self-sufficient legal framework, and challenging the Tribunal's order through a writ petition under Article 226 was not permissible. The Court cited a Supreme Court judgment emphasizing that statutory forums should be utilized for redressal, and the High Court's appellate jurisdiction under FEMA should be pursued instead of bypassing it for a writ petition. 4. Statutory Remedies under FEMA: The Court highlighted the statutory remedies available under the Foreign Exchange Management Act, 1999 (FEMA). It explained that any person aggrieved by the Tribunal's decision could file an appeal to the High Court under Section 35 of FEMA. The Court stressed that the Act should not be bypassed, and the jurisdiction under Article 226 of the Constitution should not be misused to circumvent the statutory remedies provided under FEMA. 5. Availability of Alternative Remedies: Referring to recent Supreme Court judgments, the Court underscored the importance of utilizing statutory remedies under relevant Acts, such as the SARFAESI Act and DRT Act. The Court emphasized that High Courts should exercise caution and circumspection in matters involving statutory remedies, rather than resorting to writ jurisdiction under Article 226. The Court dismissed the writ petition, citing the availability of statutory remedies and the need to respect the established legal framework. In conclusion, the Court dismissed the writ petition, emphasizing the importance of adhering to statutory remedies and not bypassing the established legal framework, particularly in matters related to financial regulations and foreign exchange violations. The judgment underscored the significance of utilizing the appellate jurisdiction provided under relevant Acts and refraining from seeking redress through writ petitions under Article 226 of the Constitution.
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