2022 (12) TMI 564 - HC - Service Tax

Maintainability of petition - availability of alternative remedy - whether we should exercise writ jurisdiction to set aside the order passed by the Tribunal against which a substantive appeal is available? - HELD THAT - The Tribunal has sought to reconcile the decisions in the cases of SBI Card and Payments Services Pvt Ltd 2015 (11) TMI 909 - CESTAT NEW DELHI and Citi Bank 2016 (2) TMI 983 - CESTAT CHENNAI and of the larger bench in Standard Chartered Bank 2015 (8) TMI 686 - CESTAT DELHI (LB) . Tribunal has considered the decisions of the co-ordinate benches and that of the larger bench and, in its opinion, found that the decisions of the larger bench have not been considered in proper perspective and that it will follow the decision of the larger bench. This view could ultimately be found in appeal as erroneous in law, but it cannot be considered as indiscipline. The Tribunal can conclude that it will follow the decision of larger bench. Though the words per incuriam have not been specifically used but the reasoning of the Tribunal indicates that it has proceeded on those lines. There was a direct refusal to follow the decisions of the co-ordinate bench. In light of such a stark refusal, the Division bench found that extraordinary jurisdiction had to be exercised despite the availability of an appeal remedy. We do not find that the case at hand is of such nature as the case of Mercedes Benz India, where writ jurisdiction needs to be exercised, and the appropriate remedy for the Petitioner would be of appeal. Filing an appeal by itself cannot be considered as prejudice. As regards the prejudice by erroneous finding is concerned if the finding is erroneous and patently contrary to the record, that can be corrected in appeal. It is not that the moment there is an erroneous or incorrect finding, writ jurisdiction has to be exercised. As emphasized in the order passed in Infra Dredge Services Pvt. Limited, totality of the circumstance will have to be considered and not only the stand-alone grounds. No case is made out for the exercise of writ jurisdiction. Writ Petition is dismissed.

Summary

Issues:
Challenge to judgment passed by Customs, Excise and Service Tax Appellate Tribunal - Delay in rendering decision - Error in judgment - Refusal to follow precedent decisions - Exercise of writ jurisdiction - Judicial discipline - Covid-19 pandemic impact on Tribunal's functioning - Prejudice and appeal remedy - Maintainability of appeal before Supreme Court.

Analysis:

Delay in Rendering Decision:
The Petitioner challenged a judgment by the Tribunal partly allowing the appeal and setting aside the penalty. The delay in rendering the decision was a key contention for the Petitioner, arguing that the delay vitiates the decision. However, the Respondent pointed out that the Tribunal's functioning was affected by the Covid-19 pandemic, leading to delays in pronouncing judgments, which should be considered in a different light.

Error in Judgment and Refusal to Follow Precedent:
The Petitioner raised concerns about errors in the judgment, including discrepancies in the show cause notice and the Tribunal's findings. Additionally, the Petitioner argued that the Tribunal failed to follow precedent decisions, leading to a lack of judicial discipline. The Petitioner cited cases where a different view required reference to a larger bench, emphasizing the need for consistency in legal interpretations.

Exercise of Writ Jurisdiction and Judicial Discipline:
The debate centered on whether the writ court should set aside the Tribunal's order despite the availability of a substantive appeal. The Petitioner urged interference in writ jurisdiction due to alleged errors and refusal to follow precedents. Conversely, the Respondent argued that the Tribunal's decision could be corrected in appeal and that writ jurisdiction should be reserved for exceptional circumstances of judicial indiscipline.

Covid-19 Impact and Prejudice:
The impact of the Covid-19 pandemic on the Tribunal's functioning was highlighted, suggesting a different perspective on delays during that period. The Respondent emphasized that filing an appeal and seeking interim relief does not constitute prejudice, as erroneous findings can be corrected in the appeal process.

Maintainability of Appeal Before Supreme Court:
The Respondent cited precedents regarding the maintainability of appeals before the Supreme Court, emphasizing that the availability of appeal remedies should deter the exercise of writ jurisdiction. The court referred to relevant judgments to support the position that writ jurisdiction should not be entertained when an appeal remedy exists.

Conclusion:
After a detailed analysis of the arguments presented, the court dismissed the Writ Petition, stating that no case was made out for the exercise of writ jurisdiction. The court clarified that the observations made were specific to the non-exercise of writ jurisdiction and did not delve into the merits of the rival claims, highlighting the importance of following legal procedures and remedies available in such cases.