CONSENT OF PARTIES CANNOT CURE INHERENT LACK OF JURISDICTION

[Mr. M. GOVINDARAJAN]

                        The competent of a Court, as held by Supreme Court in 'Hiralal Patni V. Kalinath' - (1962) 2 SCR 747, goes to the very root of the jurisdiction and where it is lacking, it is a case of inherent lack of jurisdiction.  Supreme Court in yet another case 'Subhash Mahadevasa Habib V. Neemasa Ambasa Dharmadas' - (2007) 13 SCC 650 held that an inherent lack of jurisdiction may make a decree passed by that Court one without jurisdiction or void in law.

                        In 'Kondiba Dagadu Kadam V. Savitri Bai Sopan Gujar' - (1999) 3 SCC 722 the Supreme Court held that it has to be kept in mind that the right of appeal is neither a natural nor an inherent right attached to the legislation.   Being a substantive statutory right it has to be regulated in accordance with law in force at the relevant time.  In 'Kiran Singh V. Chaman Paswan' - AIR 1954 SC 340 it was observed by the Supreme Court that a defect of jurisdiction, whether it is pecuniary or territorial or whether it is in respect of the subject matter of the action, strikes at the very authority of the court to pass any decree and such a defect cannot be cured even by consent of the parties.   It is therefore clear that even the consent of the parties cannot cure the inherent lack of jurisdiction.

                        The said concept has been again confirmed by Delhi High Court in 'Commissioner of Customs (I&G) V. Singapore Airlines Limited' - 2010 -TMI - 201484 - (DELHI HIGH COURT).   Before going to the facts of the case the provisions of Foreign Travel Tax may be discussed.  

                        Foreign Travel Tax (FTT) was introduced vide Finance Act, 1979 by insertion of Chapter V.  Sec. 35 of the said Act is the charging section and stipulates the amount of travel tax which the passengers as well as carriers are supposed to pay.  Sec. 38 of the Act provides that every passenger who embarks or attempts to embark on an international journey without paying the tax payable by him under this chapter shall, in addition to his liability to pay the tax, be liable to a penalty not exceeding Rs.200/-.  Every carrier or other person in charge of a ship or an aircraft, who in contravention of the provision of Sec. 37, allows any passenger or passengers to board the ship or aircraft, shall be liable to a penalty not exceeding three times the amount or the aggregate amount of the tax payable by the passenger or passengers so allowed to board the ship or aircraft.

                        Every carrier or other person who fails to pay the foreign travel tax to the credit of the Central Government under Sec. 35(2) shall, in addition to the payment of such tax and the interest leviable thereon, be liable to pay penalty which shall not be less than one fifth but which may extend to three times of the amount of the tax not so paid to the credit of the Central Government.   Any rule may provide that in case of breach thereof by the carrier or other person, he shall be liable to a penalty which shall not be less than five hundred rupees but which may extend to fifty thousand rupees, and where the breach is a continuing one, with further penalty which may extend to five hundred rupees for every day after the first during which such breach continues.   Any penalty may be adjudged, collected and paid to the credit of the Central Government by such authority and in such manner as may be specified in the rules made.  No order for imposing a penalty shall be passed by such authority unless the carrier or other person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority.

 Rule 9 provides for adjudication of penalties in case there is violation of provisions of the Act.  Rule 10 provides for procedure before such a penalty can be levied and stipulates that no order imposing any penalty shall be made unless such a person is given a notice in writing within such reasonable time as may be specified in the notice as well as reasonable opportunity of being heard in the matter.   Against the order appeal lies to Commissioner (Appeals) under Rule 11.  Against the order of Commissioner (Appeals) revision may be filed before Central Government under Rule 13.  The Central Government may suo motu take the case for revision.

                        In the present case the respondent was served with show cause notice dated 27.04.2004 alleging therein that it had failed to deposit an amount of Rs.45,07,500/- towards foreign travel tax for the month of March 2003 with the period stipulated in Rule 9 of Foreign Travel Tax Rules.  The Additional Commissioner, Customs passed the order.  The Commissioner of Customs (Appeals) also dismissed the appeal.

The respondents did not file any revision as provided under Rule 13.   Instead he filed an appeal before CESTAT.    CESTAT allowed the appeal.  The Department filed the appeal before the High Court.  The Department raised the following contentions:

 

CESTAT had no jurisdiction to entertain the appeal as no such appeal is provided under the Rules;

CESTAT was under the wrong motion that appeal is under the Customs Act, whereas, the action taken was not under the provisions of Customs Act but Inland Air Travel Tax Rules read with Finance Act, 1979;

The respondent contended the order of Commissioner (Appeals) specifically  stated that if the Respondent was aggrieved of the orders of the Commissioner (Appeals) it was open to file appeal against that order which was under Sec. 129A of Customs Act and therefore the respondent preferred the appeal.  The Department had not raised any objection in the appeal before CESTAT.

The High Court held that even though the action of the respondent may be correct the fact remains that CESTAT has no jurisdiction to hear the said appeal as no such appeal is provided under the rules..  Against the order of Commissioner (Appeals) only revision is provided and that too, the revision lies to the Central Government.   CESTAT does not come into picture at all in these Rules.  Therefore, it is  a case of lacking of inherent jurisdiction on the part of the CESTAT to entertain such an appeal and such order would clearly be null and void  Therefore even the consent of the parties cannot cure the inherent lack of jurisdiction.  For this reason, even if there was a mis statement in the covering letter of the Commissioner (Appeals), since there is no estoppel in law, the respondent may not be allowed to take the plea of estoppel against the statute.