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2015 (5) TMI 27 - ALLAHABAD HIGH COURT

2015 (5) TMI 27 - ALLAHABAD HIGH COURT - 2015 (322) E.L.T. 27 (All.) - Extension of stay beyond the period of 365 days - Power of Tribunal to extend stay - Held that:- If the assessee has not sought adjournment and has not avoided hearing of the appeal in any manner, there can be little or no justification for his interim order being vacated only because 180/365 days have elapsed. Any other interpretation jeopardising the rights of such an assessee would in our opinion be per se arbitrary. It is .....

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Tribunal is at fault, the parties shall suffer. No case law is required to support the proposition that an act of Court/Tribunal shall not prejudice a party. - Decided against Revenue. - Central Excise Appeal Defective No. - 107 to 110 of 2015 - Dated:- 22-4-2015 - Hon'ble Arun Tandon And Hon'ble Dr. Satish Chandra,JJ. For the Appellant : B. K. S. Raghuvanshi, Sr. S. C. ORDER Above mentioned four Excise Appeals have been filed by the Commissioner of Central Excise, Noida while the connec .....

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he reference by holding that even in a case where the period of 365 days has passed from the date of initial grant of stay but the appeal could not be disposed of for reasons not attributable to the appellant/assessee (in whose favour the stay was granted) and where the Tribunal is satisfied that the appellant/assessee was ready and willing for disposal of the appeal and/or had not indulged in any protractive strategies, extension of stay could be granted (beyond the period of 365 days) by passi .....

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a, an assessee/appellant in whose favour an order of stay earlier granted stood vacated on expiry of 180 days or 365 days as the case may be, may present an application seeking extension of stay by pleading the necessary facts as would authorize the exercise of discretion by this Tribunal for grant of such extension. The Registry is directed to maintain a separate register to record date with respect to the appeals in which stay has been granted and other appeals where no stay is granted, so as .....

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atutory period of 365 days prescribed under Section 35-C (2A) of the Central Excise Act, 1944 (herein after referred to as the 'Act, 1944'), (b) after the expiry of the statutory period of 365 days prescribed under Section 254 (2A) of the Income Tax Act, 1961 (herein after referred to as the 'Act, 1961'), the interim order granted by the Tribunal would stand vacated automatically or there is a power with the Tribunal to extend the interim order, where the appeal could not be hear .....

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Department, Shri Rupesh Jain and Shri Suyash Agrawal, Advocates on behalf the petitioner-assessee. Counsel for the department submitted before us that in view of the mandatory provisions of Section 35-C (2A) of the Act, 1944/Section 254 (2A) of the 1961, in no case the interim stay order granted in favour of the appellant/assessee can be extended beyond 365 days even where the Tribunal because of reasons not attributable to the assessee has not been able to decide the appeal within 365 days. It .....

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law. On behalf of the Income Tax department similar stand has been taken and it is contended that in view of the language of Section 254(2A) of the Act, 1961, no relief can be granted to the petitioner. We may record that this High Court has been receiving appeals/ writ petitions on identical issue namely the interim order granted in favour of the assessee having been vacated/extended by the Tribunal after expiry of the outer limit of the prescribed period of 365 days. In cases where the stay or .....

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h order passed by the High Court in Central Excise Appeal No. 78 of 2015 (Commissioner Of Central Excise Kanpur Nagar vs. M/s. Annakut Biscuits Co. Ltd.). The order referred to above, in our opinion, is not a solution to the problem in hand. The High Court cannot keep on passing orders for extending the stay with a direction to the Tribunal to decide the appeal within six months inasmuch as such directions on regular basis would be impossible for any Tribunal to comply because of heavy work. If .....

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ions where interim orders have been granted out of turn, is that one day the Tribunal will be flooded with such directions which it will not be able to comply. There has to be some mechanics for deciding the cases where interim order has not been granted on their turn and for cases where interim order has been granted simultaneously in whatever proportion it may be. A solution has to be found to the problem. Filing of Excise Appeal/writ petition of like nature before the High Court must also be .....

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hat where an order of stay is made in any proceedings relating to an appeal filed by sub-section (1) of Section 35-B, 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 the period specified in the first proviso, the stay order shall, on the expiry of that period, stand vacated." We may also take note of the third proviso which has been added to Section 3 .....

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in case the appeal is not so disposed of within the total period of three hundred and sixty-five days from the date of order referred to in the first proviso, the stay order shall, on the expiry of the said period, stand vacated." Section 254(2A) of the Act, 1961 reads as follows : "In every appeal, the Appellate Tribunal, where it is possible, may hear and decide such appeal within a period of four years from the end of the financial year in which such appeal is filed under sub-sectio .....

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such appeal is not so disposed of within the said period of stay as specified in the order of stay, the Appellate Tribunal may, on an application made in this behalf by the assessee and on being satisfied that the delay in disposing of the appeal is not attributable to the assessee, extend the period of stay, or pass an order of stay for a further period or periods as it thinks fit; so, however, that the aggregate of the period originally allowed and the period or periods so extended or allowed .....

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od or periods, even if the delay in disposing of the appeal is not attributable to the assessee." From a simple reading of the aforesaid Section 35-C(2A) of the Act, 1944, it is apparently clear that the Appellate Tribunal shall hear and decide every appeal within a period of three years from the date when the appeal is filed. However, the proviso to the said section provides that if the Tribunal has granted an interim order in an Appeal, it will decide the appeal within 365 days at the max .....

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ibunal for whatever reason, the stay order shall stand discharge even if the assessee is not at fault. The aforesaid two sections contain two stipulations : (a) Time limit has been fixed for the Tribunal to decide an appeal in which an interim order has been granted i.e. 180 days at the first instance and in any case within 365 days. (b) In case the appeal is not so decided within the time limit fixed, the interim order granted by the Tribunal shall stand vacated, even if delay in disposing of t .....

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-compliance of the statutory time frame by the Tribunal, in our opinion, would be unfair and discriminatory. Parties before the Tribunal to a lis must be treated at par. If the Tribunal is not able to decide the appeal within the time limit prescribed for reasons beyond its control and the assessee is not responsible for the same, should the assessee/appellant alone be made to suffer, is the moot question to be considered by us. The answer to the said question, in our opinion, has to be in negat .....

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wrong committed by the Court/Tribunal. There is a fundamental principle of law namely that no one shall be prejudiced by an act of Court which, in our opinion, would include a statutory Tribunal (actus curiae neminem gravabit). An act can either be an act of omission or be an act of commission. The non-disposal of an appeal, if not due to the fault of any of the parties, but due to the heavy work with the Tribunal, would fall under the category of "act of omission". No law can be so u .....

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hich it is enacted. If the object of a law is to be defeated by non-compliance with it, it has to be regarded as mandatory. But when a provision of law relates to the performance of any public duty and the invalidation of any act done is disregard of that provision causes serious prejudice to those for whose benefit it is enacted and at the same time who have no control over the performance of the duty, such provision should be treated as a directory one. Where however, a provision of law prescr .....

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f the act done in neglect of them would work serious general inconvenience or injustice to persons who have no control over who have been entrusted with the duty without promoting the social aim of the legislation, such prescription seems to be generally understood as mere instruction for the guidance and governance of those on whom the duty is imposed, or, in other words, as directory only. The neglect of them may be penal in deed, but it does not affect the validity of the act done in disregar .....

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n our opinion the consequences of such non-compliance with the direction should fall upon the same person for the provision to be saved from the clutches of arbitrariness and being hit by Article 14 of the Constitution of India. We may not dilate on the issue as to whether the aforesaid Sections 35-C(2A) of the Act, 1944 and Section 256(2A) of the Act, 1961 are mandatory or directory any further. In our opinion even if the said sections are held to be mandatory, then what is contemplated by thes .....

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