2015 (9) TMI 423 - HC - Service Tax

Restoration of appeal - Tribunal dismissed the appeals for non-compliance of pre-deposit order - Held that - We do not think that such litigants deserve sympathy or there should be a premium on their lapses and deficiencies by an order from higher Court granting unconditional restoration of the Appeal and directing the Tribunal to decide the same on merits. It would be a travesty of justice if such an approach is adopted in all cases of this nature. We are therefore of the view that the Tribunal s order in the peculiar circumstances of this case is fully justified and no fault can be found therewith. The discretion to restore the matter has been exercised judiciously. Since the Appeal of the Appellants before us in the Tribunal has already stood dismissed without adjudication on merits, in the larger interest of justice, we grant a final opportunity to the Assessees/Appellants and if within a period of three months from today the Appellants report compliance of the conditional stay order dated 16th May, 2013 and produce proof before the Tribunal in that regard, the Tribunal shall decide the Appeal of the Assessees, by restoring it to its file, on merits and in accordance with law. - Decided in favor of assessee.

Summary

Issues:
Appeal challenging order of Customs, Excise and Service Tax Appellate Tribunal; Noncompliance with condition of interim stay leading to dismissal of appeal without adjudication on merits; Application for restoration dismissed due to failure to comply with direction; Dispute over substantial question of law; Interpretation of Supreme Court judgment on dismissal of appeal for want of prosecution.

Analysis:
The judgment by the Bombay High Court pertains to appeals challenging the order of the Customs, Excise and Service Tax Appellate Tribunal, where the Assessees failed to comply with the condition of interim stay, resulting in the dismissal of the appeal without adjudication on merits. The Assessees contended that the Tribunal should have adjudicated on merits despite noncompliance with the stay condition. The Respondent argued that the dismissal was justified as the Assessees did not question the initial conditional order and failed to comply with the directions. The Court analyzed the submissions, perused the relevant documents, and considered the Supreme Court judgment in a similar case.

The Court noted that the Assessees did not challenge the initial conditional order and allowed the time for compliance to lapse. The Assessees then applied for restoration of the appeal, which was dismissed due to noncompliance with the stay condition. The Court emphasized that the Assessees cannot seek sympathy for their defaults and deficiencies by challenging the Tribunal's power to dismiss the appeal without adjudication on merits. The Court found the Tribunal's order justified in the circumstances and upheld the dismissal of the appeal without granting unconditional restoration.

In the interest of justice, the Court granted a final opportunity to the Assessees to comply with the conditional stay order within three months. If compliance is reported within the specified period, the Tribunal will restore the appeal to its file for adjudication on merits. However, any default in compliance would result in the dismissal of the appeal without adjudication on merits. The Court also directed the Assessees to pay costs quantified at Rs. 25,000 in both appeals to the Revenue within the stipulated period, clarifying that no extension of time would be entertained.

Therefore, the judgment addresses the issues of noncompliance with interim stay conditions, the power of the Tribunal to dismiss appeals for want of prosecution, and the final opportunity granted to the Assessees to comply with the conditions for restoration of the appeals within a specified period.