DISMISSAL OF APPEAL BY TRIBUNAL DURING PENDENCY OF APPEAL BEFORE HIGH COURT

[Mr. M. GOVINDARAJAN]

The provisions of indirect tax laws provide for appeal against the order of Adjudicating Authority. The Commissioner (Appeals) is the first appellate authority and the Tribunal is the second Appellate Authority and last fact finding authority. On filing appeal before the Tribunal the appellant is to deposit the duty/tax confirmed, interest and penalty imposed. He has to put evidence as to the payment of above with the appeal papers. Without payment of confirmed duty, interest and penalty the appeal will not be entertained.

Instead of paying the confirmed duty/tax, interest and penalty the appellant may file a stay petition before the Tribunal with the prayer for waival of pre-deposit put forth the circumstances for the waival of pre-deposit. The Tribunal, if it is satisfied, that the pre-deposit in filing appeal is not required it may waive the deposit until the appeal is disposed. Or it may order to deposit either part amount or full amount by the petitioner within the stipulated period mentioned in the stay order. If the  said order of the Tribunal is not complied with by the appellant CESTAT may dismiss the appeal for non compliance.

The assessee is having right to file appeal before the High Court against the order of the Tribunal. Stay order may also be challenged before High Court. When such appeal is pending the said fact is to be intimated to the Tribunal; otherwise the Tribunal may dismiss the appeal for non compliance of its order.  If the appeal details are informed to the CESTAT then the CESTAT has to wait for the outcome of the appeal before the High Court. When the appeal against the stay order is pending in the High Court, the  Tribunal cannot dismiss the appeal filed before it for non compliance of its order for pre-deposit. 

In ‘Jai Prakash Strips Limited V. Union of India’ – 2009 (9) TMI 64 - BOMBAY HIGH COURT the Division Bench of the High Court held that appeal was dismissed when the matter was pending before the High Court by the Tribunal even when its attention was brought to the fact in spite of that the appeal was dismissed.  The High Court held that it is aware that it is open to the Tribunal to dismiss an appeal for non compliance of its order. Also it is open to the Tribunal in the absence of pre-deposit by the stipulated date to dismiss the appeal. However when a party brings the fact to the notice of the Tribunal that an appeal is preferred against the order of pre-deposit of the Tribunal and is pending before judicial exercise to avoid multiplicity of proceedings would be to grant reasonable time to enable the petitioner to produce an order from the High Court and on failure to do so proceed with the matter. Ultimately the Tribunal is subject to the supervisory jurisdiction of the Court. Considering the above facts, the order of dismissal of appeal by the Tribunal is set aside by the High Court. The order of pre-deposit is varied to the extent that the amount already deposited would be considered as pre-deposit. The High Court directed the Tribunal to hear the appeal on merits.

In ‘Saswad Mill Sugar Factory Limited V. Commissioner of Central Excise, Pune – II’ – 2014 (1) TMI 510 - BOMBAY HIGH COURT the appellant was directed to pre-deposit. The appellant informed that he has challenged the order of CESTAT before the High Court and sought for an adjournment so as to wait the result of appeal before the High Court. However the Tribunal dismissed the appeal for non compliance of stay order. The High Court held that it is most unfortunate that the CESTAT dismissed the appeal for non compliance of its order in spite of the said facts was brought to the notice of the CESTAT. In all fairness to the appellant and defence to the High Court, CESTAT ought to have awaited the result of the hearing of the appeal before the High Court. An adjournment by a couple of days would have been in the interests of justice besides avoiding multiplicity of proceedings. The High Court stayed the dismissal order of CESTAT.