2018 (6) TMI 1304 - HC - Service Tax

Validity of interim order of stay - auction of property for realization of dues - the order was challenged after a long period of 7 years - Held that - Considering the fact that the writ petitioner has chosen to challenge the Order-in-Original after a period of seven years and considering the fact that the same was entertained by granting an interim order without assigning any reason, we are fully satisfied that the appellants have made out a case to interfere with the order passed by the writ Court, even though the same was made at the admission stage - the properties of the writ petitioner were already under attachment from the year 2011 onwards and such properties were brought for public auction as early as on 28.02.2018 and the same was purchased by a successful bidder on 16.03.2018 and in whose favour, a delivery order has also been issued on 20.03.2018, we do not find any reason or justification to sustain the interim order of stay granted by the writ Court. The interim order of stay granted by the writ Court is set aside - appeal allowed.

Summary

Issues:
Challenge against interim order of stay granted by writ Court, delay in challenging Order-in-Original, maintainability of writ petition after seven years, availability of statutory appeal remedy, justification for granting interim stay, lack of reason for granting interim order, relevance of recent Apex Court decision.

Detailed Analysis:

1. Interim Order of Stay: The writ appeal challenges the interim order of stay granted by the writ Court during the hearing of a writ petition challenging an Order-in-Original. The appellants argue that the writ petition should not have been entertained, especially with an interim stay, without allowing the respondents to present their case adequately. The properties of the writ petitioner were already under attachment, and an e-auction had taken place, resulting in a successful bidder emerging. The appellants contend that the writ petition was filed to delay proceedings, and the interim order was erroneous.

2. Delay in Challenging Order-in-Original: The writ petitioner challenged the Order-in-Original after a significant delay of seven years, claiming unawareness due to the closure of the company in 2008. However, the court found this delay unjustified, especially since the order was not entirely unknown to the petitioner. The court highlighted the importance of challenging orders promptly, particularly in fiscal matters, and cited various legal precedents supporting this principle.

3. Maintainability of Writ Petition: The court examined the maintainability of the writ petition due to the availability of a statutory appeal remedy against the Order-in-Original. The writ petitioner's reasons for the delay, such as financial constraints and management issues, were deemed insufficient. The court emphasized that filing a writ petition in fiscal matters when an alternative remedy exists is generally not entertained, as established by legal precedents cited in the judgment.

4. Justification for Granting Interim Stay: The court noted that the writ Court granted the interim stay without providing a clear reason for doing so. Citing a recent Apex Court decision, the judgment emphasized the importance of not impeding financial matters through frivolous litigation or unwarranted interim orders. The court found the lack of a prima facie view for granting the interim stay problematic, especially given the availability of a statutory appellate remedy.

5. Relevance of Recent Apex Court Decision: The judgment extensively referred to a recent Apex Court decision to support the conclusion that the writ petition should not have been entertained and the interim order should be set aside. The decision highlighted the caution needed in granting interim orders in financial matters to prevent adverse impacts on public projects and financial institutions.

6. Conclusion: The writ appeal was allowed, setting aside the interim order of stay granted by the writ Court. The court found that the delay in challenging the Order-in-Original, coupled with the lack of justification for the interim stay, warranted interference with the writ Court's decision. The judgment emphasized the importance of timely legal actions in fiscal matters and the need to avoid unnecessary delays through interim orders.