2009 (242) E.L.T. 523 (Bom.

)
F.I. Rebello and J .H. Bhatia, J J .
NEDUMPARAMBIL P. GEORGE
UNION OF INDIA
CASES CITED
[J udgment per : F.I. Rebello, J . (Oral)]. - Rule :
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IN THE HIGH COURT OF J UDICATURE AT BOMBAY
Commissioner v. Kumar Cotton Mills Pvt. Ltd. 2005 (180) E.L.T. 434 (S.C.) [Para 7]
Narang Overseas P. Ltd. v. Income Tax Appellate Tribunal 2007 (295) ITR 22 (Bom.) [Para 8]
REPRESENTED BY : S/ Shri Sushant S. Murthy, i.b. M.R. Baya, for the Petitioner.
S/ Shri V.H. Kantharia, a/ w J .B. Mishra, for the Respondent.
Heard forthwith.
The Tribunal on 3rd J anuary, 2007 passed an order waiving pre -deposit of penalty
and also stayed recovery till the disposal of the appeal.
The respondent no. 2 by three orders directed recovery of amounts from various
parties set out therein including the petitioner herein. The amounts claimed are Rs.
5,00,000/ -; Rs. 20,000/ - and Rs. 1,00,000/ -.
It is submitted that once there was an interim order pending appeal it was not open
to the respondents to demand the amount which was the subject matter of proceedings
pending before the tribunal.
Versus
Writ Petition No. 533 of 2009, decided on 22 -4-2009
Relied on
Relied on
Stay of order - Non-disposal of appeal within 180 days period - Nothing on record
to show that appeal could not be heard on account of any act on part of petitioners -
Where appellant is not at fault and the failure is on account of the Tribunal to hear the
appeal for whatever reason or on account of the acts of department, the second proviso
of Section 129B(2A) of Customs Act, 1962 cannot be read to defeat the vested right of
appeal of an appellant.
Stay of order - Duration of stay - Section 129B(2A) of Customs Act, 1962 - Tribunal
itself at the hearing of the stay application considering its docket and or the Benches
available grants stay till the hearing and final disposal of the appeal - Once the Tribunal
grants stay in the absence of either the appellant or Department applying for
adjournments without justifiable cause with a view to delay the hearing, the Tribunal
bound to hear and dispose of appeal within 180 days - Proviso to Section 129B(2A) of
Customs Act, 1962 must be, to avoid being declared unconstitutional, be read to mean
that it applies when the hearing of appeal within 180 days could not be taken up on
account of persistent conduct or act of appellant.
Stay of order - Extention of stay - Power of Tribunal to extend stay - Second proviso
to Section 129B(2A) of Customs Act, 1962 has effect of vacating stay on expiry of 180
days - No power of extention conferred on Tribunal if proviso so read.
[para 8]
[para 9]
[para 9]
Petition allowed
R.K. J ains
ExCus Electronic Library for Central Excise, Customs, Service Tax & Allied Laws
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129B(2A)
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On the other hand, on behalf of the respondents, learned counsel for the
respondents draws our attention to section 129B(2A). The relevant portions of which reads as
under :
: The Appellate Tribunal shall, where it is possible to do so, hear and decide every
appeal within a period of three years from the date on which such appeal is filed :
Provided that where an order of slay is made in any proceeding relating to an appeal filed under
sub-section (1) of section 35B, the Appellate Tribunal shall dispose of the appeal within a period
of one hundred and eighty days from the date of such order :
Provided further that if such appeal is not disposed of within period specified in the first proviso,
the stay order shall, on the expiry of that period, stand vacated.
It is therefore, submitted that considering the second proviso to the said sub-section the stay
order stands vacated by operation of law if the appeal filed under section 35B(1) is not
disposed of within one hundred and eighty days. Section 2A was introduced by Act 20 of
2002 with effect from 11th May, 2002.
We have heard learned counsel for the parties. There is nothing on record to show
that the appeal could not be heard on account of any act on the part of the petitioners
herein. The Tribunal itself, inspite of the fact that section 129B(2A) was on the statute book,
granted stay pending the hearing and final disposal of the appeal. The appeal was filed in the
year 2006. (and as such on account of the stay in terms of the proviso to sub -section 2A the
period of 180 days has expired). Considering the date of filing of the appeal and the first
proviso, the tribunal was duty bound to dispose of the appeal with 180 days in a case where
stay is granted. Admittedly, in the instant case, the tribunal has not disposed of the appeal
within 180 days. When the Tribunal granted stay that by itself would indicate that the
tribunal itself was conscious of the fact that it is not in a position to hear and dispose of the
appeal within 180 days. It is in that context that the second proviso must be considered.
A similar issue had come up for consideration before the Supreme Court in
v. 2005
(180) E.L.T. 434 (S.C.) wherein in respect of similar provision under the Central Excise Act,
this is what the Supreme Court observed :
6. The sub - section which was introduced cannot be construed as punishing the
assessees for matters which may be completely beyond their control. For example, many of the
Tribunals are not constituted and it is not possible for such Tribunals to dispose of matters.
Occasionally by reason of other administrative exigencies for which the assessee cannot be held
liable, the stay applications arc not disposed within the time specified. The reasoning of the Tribunal
expressed in the impugned order and as expressed in the Larger Bench matter, namely v.
(supra) cannot be faulted. However, we should not be
understood as holding that any latitude is given to the Tribunal to extend the period of stay except on
good cause and only if the Tribunal is satisfied that the matter could not be heard and disposed of by
reason of the fault of the Tribunal for reasons not attributable to the assessee.
Relying on the said judgment, this Court in the case of v.
2007 295 ITR 22 (Bom) in respect of similar
provision under the I.T. Act had applied the said ratio and observed that the power to grant
interim relief is inherent and inheres in a tribunal vested with the power to finally hear an
appeal. A provision like the second proviso must be read to mean that such a power not to
continue a stay beyond 180 days, is in those circumstances where the failure is on account
of the acts of the appellant. The appeal here could not be disposed of within 180 days. The
said proviso cannot be read to defeat the vested right of appeal of an appellant when the
appellant is not at fault. We adopt the reasoning given in (supra). In
our opinion the case where the appellant is not at fault and the failure is on account of the
tribunal to hear the appeal for whatever reason or on account of the acts of the respondent,
the law as explained in the judgment in (supra) will have to be applied also under the
provisions of the Customs Act.
On behalf of the respondent learned counsel submits that the respondent should
be directed to go to the tribunal and ask for extension of stay. The second proviso literally
read has the effect of vacating the stay on expiry of 180 days. There is therefore no power of
extension conferred on the tribunal if the proviso is so read. The proper way to read the
second proviso would be, that the Tribunal itself at the hearing of the stay application
Commissioner of Customs and Central Excise, Ahmedabad Kumar Cotton Mills P. Ltd.
in terrorem
IPCL
Commissioner of Central Excise, Vadodara
Narang Overseas P. Ltd.
Income Tax Appellate Tribunal and others
Narang Overseas P. Ltd.
Narang
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considering its docket and or the Benches available grants stay till the hearing and
final disposal of the appeal. Once the Tribunal grants stay, in the absence of either the
appellant or respondent applying for adjournments without justifiable cause with a view to
delay the hearing, the Tribunal considering the duty on it is bound to hear and dispose of the
appeal within 180 days. If it has granted stay and does not hear the appeal within 180 days
then, there is no reason why the stay should not continue till such time the appeal is heard
and disposed of in the absence of any failure on part of the appellant. The proviso must be to
avoid being declared unconstitutional be read to mean that it applies when the hearing of the
appeal within 180 days could not be taken up on account of the persistent conduct or act of
the appellant. On the facts of this case, as nothing has been brought to our attention that it
was on account of the acts of the petitioner that the appeal could not be heard, the relief
sought for by the petitioner in the present petition will have to be allowed.
Consequently, Rule is made absolute in terms of prayer clause (a). The Tribunal is
directed to dispose of the matter within four months expeditiously.
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