ST - A party who prosecutes a WP bonafide expecting to succeed cannot be expected to keep preparing for an alternate remedy even before his Petition is rejected: HC
By TIOL News Service
MUMBAI, OCT 05, 2018: THE facts go thus -
+ Being aggrieved by the O-in-O dated 13.01.2016 passed by the Commissioner of Service Tax, Mumbai-V, the applicant approached the Bombay High Court on 04.05.2016 . The matter was listed for hearing on 22.8.2016, 29.08.2016, 19.09.2016, 26.09.2016, 10.10.2016, 17.10.2016, 24.10.2016, 21.11.2016, 28.11.2016, 05.12.2016 & 19.12.2016. However, the same could not be heard on these dates.
+ The matter was finally disposed of on 30.03.2017 on the ground of alternate remedy.
The High Court observed -
2. We do not think that the conditions imposed by the statute are either excessive or arbitrary requiring our interference in writ jurisdiction particularly in the absence of any material in that behalf. It is inconceivable that an assessee approaches this Court in writ jurisdiction and can avoid filing of an appeal only on such a plea as is projected, namely, a pre-deposit of 7.5% of the tax to avail of his right of appeal.
3. The writ petition is misconceived and dismissed on the ground that there is an alternate and equally efficacious remedy available to the petitioner.
+ After disposal of the matter by the High Court, the applicant consulted their Chartered Accountants, who in turn consulted legal Counsel regarding future course of action to be taken in the matter viz. whether to file appeal before Supreme Court or not. The applicant applied for a certified copy of the order on 21.4.2017 and, thereafter, they decided to file appeal before Tribunal.
When the COD application/appeal came up for hearing before the CESTAT, the appellant submitted that provisions of Section 14 of the Limitation Act would apply to the facts of the present case and hence the period during which the writ/appeal was pending before the Bombay High Court should be excluded for calculating the period of limitation for filing the appeal. Reliance is placed on the decisions in Collector, Land Acquisition Anantnag And Another Vs. MST. Katiji and Others - 2002-TIOL-444-SC-LMT, West Coast Paper Mills Ltd. - 2004-TIOL-14-SC-LMT-LB, Ashok Kumar Tiwari - 2014-TIOL-500-CESTAT-DEL, Sonia Overseas Pvt. Ltd. - 2014-TIOL-1750-HC-P&H-Cus, Cairn Energy India Pty. Ltd. - 2014-TIOL-1978-HC-AP-CX .
The AR submitted that the delay is not 12 months but exceeds 16 months since the OIO is passed on 13.01.2016 whereas the appeal had been filed on 26.05.2017; that the appeal has been filed before the Tribunal more than 55 days after passing of the order by the Bombay High Court and no factual evidence is presented for the delay post the passage of the order by the High Court; that section 14 of the Limitation Act is not applicable as elements of due diligence and good faith are absent. The AR adverted to various judicial pronouncements of the Supreme Court namely, Ketan V Parekh - 2011-TIOL-113-SC-FEMA, Patel Brothers - 2017-TIOL-04-SC-VAT, Singh Enterprises - 2007-TIOL-231-SC-CX, Flemingo (Duty Free Shop) Pvt. Ltd. - 2014-TIOL-2436-HC-MUM-Cus, to conclude that the application for condonation of delay should be dismissed.
The CESTAT while dismissing the application for condonation of delay (and appeal) observed thus -
++ Apex Court (in Ketan V Parekh - 2011-TIOL-113-SC-FEMA has interpreted Section 29(2) of the Limitation Act by observing that wherever the law prescribed a complete code prescribing time limit as well as power of condonation like an upper limit for condonation of delay or grounds of condonation, the law of limitation cannot be invoked to by-pass the same.
++ Thus, in the instant case, laws of limitation cannot be invoked as we are dealing with a complete code prescribed under Central Excise Act, where not only the period of limitation is prescribed but also the grounds on which condonation can be granted are prescribed. However it is seen that, there is no upper limit for period of condonation in the instant case. Thus there is no necessity to invoke the provisions of the Limitation Act, so long as the reasons of delay are covered by the provisions of law.
++ Even Hon'ble High Court has described their petition as 'misconceived' while dismissing it.
++ In the above circumstances when various High Courts had taken a clear stand on the issue, the appellants approach to Hon'ble High Court on the same issue of pre-deposit was not with clean hands. Even after the decision of Hon'ble High Court was received, the appellants delayed the filing of appeal for a long time. This shows the callous approach.
++ High Court disposed of the petition on 30.3.2017 but the appellants applied for copy of order after 21 days on 21.4.2017. The copy of order was received on 27.4.2017 but the appeal was filed on 26.5.2017 almost a month after receipt of order. When the matter has been agitated before High Court for over a year it is obvious that the defense of the appellants should have been ready and immediately the appellants should have filed the appeal before Tribunal.
We reported this order dated 15 November 2017 as - 2018-TIOL-130-CESTAT-MUM.
Aggrieved, the appellant is before the High Court.
The High Court observed that the conclusion of the Tribunal that the principles contained in Section 14 of the Limitation Act, 1963 are inapplicable to statutory appeals has been rejected by the Supreme Court in M.P. Steel Corporation - 2015-TIOL-89-SC-CUS .
Inasmuch the period of time spent in prosecuting the Petition against the order dated 13th January 2016 of the Commissioner of Service Tax has to be excluded while computing the period of limitation in filing an Appeal before the Tribunal, the High Court observed.
The High Court also observed that the period between 4th May 2016 to 30th March 2017 was to be held as time spent bonafide before the Court in prosecution of Writ Petition No. 1724 of 2016; that the Writ Petition was filed against the order dated 13th January 2016 (received on 2nd March 2016) on 4 th May 2016 i.e. within the three months for filing an Appeal to the Tribunal under Section 35B(3) of CEA, 1944; that 28 days are available; that if one excludes the delay in obtaining the certified copy of the High Court order, the Appeal to the Tribunal is filed after consuming 51 days; that if one excludes the 28 days available from the 51 days, the Appellant has to explain 23 days delay; that holding the delay as not sufficiently explained only on the ground that as the Petitioner whose Petition is pending in the High Court for over a year, the Appellant should have been ready with their Appeal to the Tribunal and filed it immediately after the High Court refused to entertain their Petition, is not justified as the explanation offered for the delay viz. preparing the Appeal to file it to the Tribunal is reasonable; that a party who prosecutes a Writ Petition bonafide expecting to succeed cannot be expected to keep preparing for an alternate remedy even before his Petition is rejected.
Taking note of the Apex Court ruling (in Collector Vs. Mst Katiji - 2002-TIOL-444-SC-LMT that a liberal approach should be adopted while deciding an application for condonation of delay, the High Court held that in the present facts, the Appellant had sufficiently explained the delay.
Setting aside the impugned order of the Tribunal, the High Court directed the Tribunal to consider the Appellant's Appeal on merits.
The Appeal was disposed of.
(See 2018-TIOL-2068-HC-MUM-ST)
