2014 (7) TMI 941 - HC - Service Tax

Power of tribunal to grant stay beyond the total period of 365 days - extension of stay granted earlier - extension order should be speaking or not - Held that -in case and having satisfied that delay in not disposing of the appeal within 365 days (total) from the date of grant of initial stay is not attributable to the appellant / assessee in whose favour stay has been granted and that the Appellate Tribunal is satisfied that such appellant / assessee has fully cooperated in early disposal of the appeal and/or has not indulged into any delay tactics and/or has not taken any undue advantage, the learned Appellate Tribunal may, by passing a speaking order as observed hereinabove, extend stay even beyond the total period of 365 days from the date of grant of initial stay. However, as observed by the Hon ble Supreme Court in the case of Kumar Cotton Mills Pvt. Ltd (2005 (1) TMI 114 - SUPREME COURT OF INDIA), it should not be construed that any latitude is given to the Appellate Tribunal to extend the period of stay except on good cause and if the Appellate Tribunal is satisfied that the matter could not be heard and disposed of by reason of the fault of the Appellate Tribunal for the reasons not attributable to the assessee. It also may not be construed that the Appellate Tribunal can extend stay indefinitely. It also may not be construed that the Appellate Tribunal can extend stay indefinitely. On expiry of every 180 days the concerned assessee / appellant is required to submit an appropriate application before the learned Appellate Tribunal to extend the stay granted earlier and the Appellate Tribunal may extend the stay for a further period but not beyond 180 days at a stretch and on arriving at the subjective satisfaction, as stated hereinabove, the Appellate Tribunal may extend the stay even beyond 365 days from the date of grant of initial stay and even thereafter. - Thus, on expiry of maximum period of 180 days the assessee / appellant is required to submit application for extension of stay each time and the Appellate Tribunal is required to consider the individual case and pass a speaking order, as stated hereinabove - Following decision of Commissioner Versus Small Industries Development Bank of India 2014 (7) TMI 738 - GUJARAT HIGH COURT - Matter remanded back - Decided partly in favour of assessee.

Summary

Issues Involved:
Extension of stay beyond 365 days, requirement of passing a speaking order while extending stay.

Analysis:
1. The appellant challenged an order by the Customs, Excise, and Service Tax Appellate Tribunal that extended the stay beyond 365 days from the initial grant. The appellant raised substantial questions of law regarding the legality of the extension under Section 35C(2A) of the Central Excise Act, 1944, and the need for a reasoned order by the Tribunal.

2. The High Court noted that the issues raised were not new based on a previous decision in Tax Appeal No.341 of 2014 and other related appeals. The Court had already addressed and provided guidance on similar matters, including the extension of stay beyond 365 days and the necessity of a speaking order by the Tribunal.

3. Referring to the previous judgment, the Court reiterated that the Tribunal could extend the stay beyond 365 days if the delay in disposing of the appeal was not the appellant's fault and if the Tribunal was satisfied with the appellant's cooperation. However, the Tribunal must review the situation every 180 days and consider extension applications on a case-by-case basis.

4. The Court clarified that the Tribunal should not extend the stay indefinitely and must prioritize appeals with stay orders. It emphasized the need for the Tribunal to dispose of appeals promptly, especially those affecting revenue. The Court directed the Tribunal to maintain separate registers for cases with stay orders and expedite their resolution.

5. Ultimately, the Court held in favor of the appellant regarding the extension of stay beyond 365 days but ruled in favor of the revenue department on the requirement for a speaking order. The matter was remanded to the Tribunal to pass a fresh speaking order within two months, ensuring the stay order remained in effect during this period.

6. The Court partially allowed the appeal, remitting the matter back to the Tribunal for further proceedings. No costs were awarded in this judgment.