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2018 (2) TMI 1441 - HC - Central ExciseWhether Hon ble Tribunal i.e. Respondent no.2 has erred by not appreciating legal position that in case of unreported compliance of stay order before Hon ble Tribunal appeal merits restoration of appeal? Held that - we are unable to understand the approach of the Tribunal. Eventually, Tribunals are set up to render substantial justice and not to defeat just and bonafide claims by hyper technical approach. Somehow or the other, we find that a file clearance drive which the Revenue adopts on its administrative side has taken over the Tribunal members. The Tribunals are discharging quasi judicial functions. In fact, it is more a judicial power and when it has to adjudicate the Appeals on merits and in accordance with law, it is suppose to give parties an opportunity to argue their cases on merits particularly once the Tribunal is satisfied that the parties i.e. the assessee has acted bonafide. There is no gross negligence and utter callousness in this case. True, it is that there was a lapse and which was of reporting compliance to the Tribunal. The Tribunal should have noted that not only the lapse is cured, but the amounts are deposited after the warrant of attachment was levied. Thus, even recovery by coercive means once resorted, resulted in substantial part of the revenue being secured. After this, there was no occasion for the Tribunal to adopt an approach which defeats justice. Appeal allowed - decided in favor of appellant.
Issues:
1. Challenge to the order dismissing the application for restoration of the appeal before the Tribunal. Analysis: The appellant challenged the order dismissing its application for restoration of the appeal before the Tribunal. The High Court admitted the appeal based on three substantial questions of law. The questions revolved around the Tribunal's alleged errors in not appreciating the legal position regarding compliance with stay orders and the provisions of Rule 20 of CESTAT (Procedure) Rules, 1982. The appellant contended that the dismissal of the appeal by the Tribunal was unjustified as compliance had been made, albeit unreported due to an error. The High Court noted the belated nature of the restoration application but emphasized the need for substantial justice over hyper-technicality. The Tribunal's approach was criticized for not giving parties an opportunity to argue their cases on merits, especially when the appellant had acted bona fide and rectified the compliance lapse by depositing the required amounts post-attachment. The High Court quashed the impugned order and directed the Tribunal to restore the appellant's appeal for adjudication on merits and in accordance with the law. The High Court highlighted the importance of rendering substantial justice over technicalities, especially in cases where parties act bona fide and rectify compliance lapses promptly. The Tribunal's failure to provide an opportunity for the appellant to argue their case on merits was deemed unjust, considering the subsequent rectification of compliance and the securing of a substantial part of revenue post-attachment. The High Court emphasized the judicial duty of the Tribunal to adjudicate appeals on merits and in accordance with the law, particularly when parties demonstrate good faith and rectify any errors promptly. The quashing of the impugned order and the direction for restoration of the appeal underscored the High Court's commitment to upholding justice and fairness in legal proceedings.
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