By TIOL News Service

MUMBAI, SEPT 04, 2017: A reference was made by the Division Bench requiring the Larger Bench to answer following question:

"Whether the decision of the Tribunal in re Purewall & Associates Ltd. is the correct proposition of law or that of the view expressed in re Bajaj Auto Ltd."

The appeals related to the dispute as to whether refund arises without challenging the order-in-original. The refund so claimed was denied by the Adjudicating Authority.

Another Appeal is against order of remand passed by the Commissioner (A).

Before the Larger Bench, the Revenue's preliminary objection is that when the adjudication was not challenged by the appellant, but refund claim was made and such claim is before Division Bench in various appeals as above, no reference arises since maintainability of those appeals is in question before the Division Bench. Similarly when the other appeal is against remand ordered by the Commissioner (Appeals), no reference arises and any decision of the Larger Bench at this stage may influence the Commissioner (Appeals), who is yet to re-adjudicate the matter.

The appellant, after explaining the facts involved, made a submission that a reference to a Larger Bench arises when considering the facts and circumstances of a case, the Bench reaches a conclusion different from that of a decision made previously by a co-ordinate Bench on the same issue and honestly believes that previous decision of Tribunal is an impediment to the present Bench to reach to a decision different from that of the co-ordinate Bench. [ Gammon India Ltd. - 2011-TIOL-60-SC-CUS and Suganthi Suresh Kumar vs. Jagadeeshan - (2002) 2 SCC 420relied upon.]

Furthermore, it is informed that the Revenue appeal filed against the Tribunal decision in Purewall & Associates was dismissed by the Supreme Court and, therefore, the referral Bench expecting the Larger Bench to review the decision of the apex court is not permitted in law.

The appellant also proceeded to explain the above by citing the apex court decisions in V. M Salgao car & Bros. P. Ltd. etc. vs. Commissioner of Income Tax etc. - 2002-TIOL-655-SC-IT and Kunhayammed vs. State of Kerala - 2002-TIOL-50-SC-LIMITATION.

Summing up their submission, the appellant said - in order to refer a question to the Larger Bench, a detailed exercise ought to have been made by the Division Bench on the facts of each of the four appeals in its hand explaining the reason of its decision in each case in clear terms and explaining the reason why the Bench honestly believes that either of the decisions, i.e. in Bajaj Auto or Purewallis applicable to the governing facts of each case was impediment for the referring Bench to differ with the previous decision in the respective case. The Bench ought to have discussed the decisions in both the cases for drawing its difference. But that has not been done by the referring Bench. Therefore the reference to the Larger Bench to answer whether the proposition of law in one or the other case is correct is not a proper reference in accordance with law, being premature and contrary to the basic principles of jurisprudence laid down by Apex Court in the judgments hereinbefore cited.

After considering the elaborate submissions and adverting to the apex court decisions cited, the Bench inter alia noted thus -

++ It is clear from the ratio laid down in the catena of judgments placed before us as dealt hereinbefore, that Tribunal has no jurisdiction to review whether Purewall& Associates Ltd. (supra) or Bajaj Auto Ltd. (supra) lays down correct proposition of law when Apex Court has decided those appeals in its Civil Appellate jurisdiction and orders of Tribunal have been merged in the decisions of the Apex Court.

Adverting to the doctrine of staredecisis as explained in the case of Medley Pharmaceuticals Ltd. - 2011-TIOL-09-SC-CX, the CESTAT further observed -

++ We may reiterate that a decision rendered on a question that was before a court, upon argument of both sides and application of the law to the settled facts stated therein as well as the reason of decision stated, gives rise to stare decisis . Purewall & Associates Ltd. (supra) or Bajaj Auto Ltd. (supra) are precedent in their own field and to the extent the matter was in controversy therein before the Apex Court. Accordingly it is not the jurisdiction of the Larger Bench of Tribunal to hold which is the correct proposition of law in these two cases.

++ The irresistible conclusion that can be drawn is that the Bench referring the matter to Larger bench should have examined all the four appeals before it, threadbare on the facts, pleadings of both sides and evidence as well as law applicable thereto, to arrive at its conclusion and stated reason of reference in clear terms having regard to the law as has been explained hereinbefore.

++ Only upon detailed examination of each case, the Division Bench may have occasion to know whether the earlier decision of Tribunal on the same point is an impediment to the Referring Bench to reach to a conclusion different from the earlier decision of a coordinate Bench of Tribunal following rule of judicial discipline so as to make a reference to Larger Bench for answer.

The reference was returned to the Division Bench.

(See 2017-TIOL-3193-CESTAT-MUM-LB)