TMI Blog2015 (7) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... ing satisfied that the delay in disposing of the appeal within a period of 365 days from the date of grant of initial stay is not attributable to the appellant / assessee. For that purpose, on expiry of every 180 days, the appellant / assessee is required to make an application to extend stay granted earlier and satisfy the learned Appellate Tribunal that the delay in not disposing of the appeal is not attributable to him / it and the learned Appellate Tribunal is required to review the matter after every 180 days and while disposing of such application of extension of stay, the learned Appellate Tribunal is required to pass a speaking order after having satisfied that the assessee / appellant has not indulged into any delay tactics and that the delay in disposing of the appeal within stipulated time is not attributable to the assessee / appellant. However, at the same time, it may not be construed that widest powers are given to the Appellate Tribunal to extend the stay indefinitely and that the Appellate Tribunal is not required to dispose of the appeals at the earliest. The object and purpose of section 35C(2A) of the Act particularly one of the object and purpose is to see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per the assessment order for AY 2008-09, the tax liability is for an amount of ₹ 7,21,19,094/- (including interest u/s 201(1A) of ₹ 1,20,19,849/-) and for AY 2009-10, tax liability is ₹ 9,04,43,478/- (including interest u/s 201(1A) of ₹ 1,75,05,189/-). That in the respective appeals before the learned Tribunal, the assessee preferred stay applications. That out of total tax and the interest liability for AY 2008-09, out of ₹ 7,21,19,094/-, the assessee had already paid ₹ 6,37,50,000/- and a sum of ₹ 83,69,094/- was outstanding. Similarly, for AY 2009-10, out of total tax liability including interest of ₹ 9,04,43,478/-, the assessee had already paid ₹ 8,13,50,000/-. Thus, only a sum of ₹ 90,93,478/- was outstanding. That the learned Tribunal vide order dated 25.3.2011 in Stay Application Nos.15 and 16 of 2011, stayed the demand for a period of 180 days from the date of receipt of the order or till appeal of the assessee gets decided. That the stay of demand granted earlier has been extended from time to time and the stay has been extended beyond the period of 360 days i.e. in fact for approximately more than 1000 days. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be respected by everybody including the learned Tribunal. 3.3 It is vehemently submitted by Mrs. Bhatt that legislative intent of restricting the period of stay of demand for a maximum period of 365 days is to see that appeals by the Tribunal are heard expeditiously and the assessee may not get undue benefit of the stay of demand granted by the Tribunal. It is submitted that in most of the cases, after obtaining stay of demand, it is the assessee, who ask for time. It is submitted that to curb such a practice and/or delay tactics, the period of stay of demand has been restricted upto a maximum period of 365 days only. It is further submitted that many a times, though while granting stay, the learned Tribunal generally observes that the appeal to be listed at top of the board, such matters are ordinarily listed at the bottom of the board and no priority is given. 3.4 It is submitted by Mrs. Bhatt appearing on behalf of the revenue that in the present case, there is a huge tax liability pending since many years and the stay of demand granted by the learned Tribunal which has been extended from time to time and in the present case, for approximately 1000 days. It is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of 180 days and/or at the earliest. It is submitted that following may be/can be the reasons for delay in disposing of the appeal by the learned Tribunal. 1. Shortage of Tribunal Members and many of the times, Bench is not functioning. Next hearing fixed almost after a month s time. 2. Many a times, the Bench sits one after another due to shortage of Members. As a result, no heavy stay granted matters can be taken up in either sitting. 3. In International tax cases, adjournments are being sought on account of non-availability of Assessing Officer to argue the case. 4. In transfer pricing cases, adjournments are being sought on the ground that comments / report of Transfer pricing Officer has not been received or non-availability of Transfer pricing Officer for the hearing. 5. Adjournments are taken on the ground that Senior people from Department not available to argue in big cases. 6. Many times, stay granted matter cannot be taken up for hearing on the ground that similar issue is involved in earlier years which is not a stay granted matter and pending for disposal. 7. On some occasions, paperbooks are being filed late by the Assessee/ Department (sometim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submitted that initial stay of demand is always granted by the learned Tribunal after due application of mind and having found a strong prima facie case for grant of interim relief. It is submitted that therefore, as such, section 254(2A) of the Act is required to be read in such a manner that it may not suffer from vice of unconstitutionality. 4.3 He has further submitted that even some directions can also be issued to the learned Tribunal to see that in the cases were there are stay of demands, priority shall be given to such matters and there is no delay in disposing of such appeals and all efforts are made by the learned Tribunal to decide and dispose of such appeals at the earliest looking to the legislative intent provided in section 254(2A) of the Act. 4.5 It is further submitted by Shri Soparkar, learned senior counsel that in the present case, the appeals were not decided and disposed of by the learned Tribunal as the issue involved in the appeals was pending before the Hon'ble Supreme Court. It is submitted that in the present case, against the total demand of ₹ 7,21,19,094/-, substantial amount has already been paid by the assessee. It is submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree hundred and sixty-five days and the Appellate Tribunal shall dispose of the appeal within the period or periods of stay so extended or allowed:] [Provided also that if such appeal is not so disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee] 5.2 It is true that as per third proviso to section 254(2A) of the Act, if such appeal is not so disposed of within the period allowed under the first proviso i.e. within 180 days from the date of the stay order or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee. Therefore, as such, legislative intent seems to be very clear. However, the purpose and object of providing suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er beyond the total period of 365 days in view of statutory provisions contained in Section 35C(2A) of the Central Excise Act, 1944? (ii) Whether even if it is held that the learned Appellate Tribunal can extend the stay granted earlier beyond the total period of 365 days, the learned Appellate Tribunal is required to pass a speaking order/reasoned order considering 3rd proviso to section 35C(2A) of the Central Excise Act, 1944? 5.4 After considering the rival submissions and considering various decisions of the other High Courts and this Court and even the decision of the Hon'ble Supreme Court in the case of Kumar Cotton Mills Pvt. Ltd (supra), the Division Bench has observed as under: 5.04Therefore, in light of the above decision of the Hon ble Supreme Court in the case of Kumar Cotton Mills Pvt. Ltd (supra), third proviso to section 35C(2A) which has come into effect w.e.f. 10/5/2013 is to be construed by holding that if the conditions mentioned in third proviso to section 35C(2A) is satisfied i.e. if the Appellate Tribunal is satisfied on an application made by the assessee / appellant that delay in disposing of the appeal within total period of 365 days from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Tribunal to grant stay in appropriate cases and it is also not possible to infer any curtailment of such powers beyond the period of six months (180 days). Para 6 to 13 of the decisions of Division Bench in the case of Poly Fill Sacks (supra) reads as under : 6. Section 35C of the Act deals with the Orders of the Tribunal and sub-section 2A has been inserted w.e.f.11-05-2002 and reads as under: [(2A) 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 stay 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 the period specified in the first proviso, the stay order shall, on the expiry of that period, stand vacated.] On a plain reading of the provision it becomes apparent that where an order of stay is made in any proceeding relating to an appeal, the Tribunal is required to dispose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... you in the selection of one or other of two possible constructions of the words to be found in the enactment, and show when there is doubt about its scope, when it may reasonably admit of doubt as to having this scope or that, which is the proper view to take of it . Mudholkar, J. in Hindustan Ideal Insurance Co. Ltd. vs. Life Insurance Corporation Ltd. reported in AIR 1963 the Hon'ble Supreme Court 1087 stated the rule thus there is no doubt that where the main provision is clear, its effect cannot be cut down by the proviso. But where it is not clear, the proviso, which cannot be presumed to be a surplus age, can properly be looked into to ascertain the meaning and scope of the main provision. Since the natural presumption is that but for the proviso, the enacting part of the Section would have included the subject matter of the proviso, the enacting part should be generally given such a construction which would make the exceptions carved out by the proviso necessary and the construction which would make the exceptions unnecessary and redundant should be avoided (See Principles of Statutory Interpretation by Justice G.P.Singh, Eighth Edition, 2001, pages 168, 169, 174, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is not in a position to proceed for various reasons. 10. The contention on behalf of Revenue that the assessee must approach the Tribunal and seek extension of stay already granted is misconceived at least in relation to orders of the Tribunal made before 11- 05-2002. Firstly, it proceeds on a fallacious premise as stated hereinbefore. Secondly, in absence of any change in circumstances why should the Tribunal be inundated with extension applications when admittedly, it is already overburdened and reeling under backlog of pending appeals. 11. However, in cases where the Revenue finds that a particular assessee having obtained stay is adopting dilatory tactics, it is always open to Revenue to move the Tribunal in such an eventuality. 12. For the period subsequent to the insertion of the Second Proviso the Tribunal should, as a matter of practice, specify the time period during which the stay shall operate after exercising its judicial discretion. The period may be limited or could be co-terminous with disposal of appeal on consideration of all relevant factors in a given fact situation. 13. Therefore, as held by the Apex Court in case of Commissioner of Customs C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal after hearing the parties on application dt.30.10.2013 filed by the assessee seeking extension of stay order passed by the Tribunal dt.20.9.2012, was of the view that the appeal could not be disposed of for no fault of the petitioner assessee but in view of pendency of other old appeals and that was the reason which prevailed upon the Tribunal to extend operation of the stay granted dt.20.9.2012 during pendency of appeal vide its order dt.23.1.2014, in our considered view, after the stay order granted on 20.9.2012 has been allowed to continue to be operative during pendency of appeal vide order dt.23.1.2014, the proceedings which have been initiated by the department during the intervening period which have been treated to be withdrawn vide their later communication dt.29.1.2014 by fiction of law, became nonest and inoperative and the very initiation of the proceedings by the respondent u/s.87(b) of the Finance Act, 1944 dt.21.1.2014 served on the banker of the petitioner and the bank account of the petitioner which was debited through bank attachment on 22.1.2014 could not be held justified in the eye of law and we find substance in the submission made by the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. It cannot mean that a construction be given that the power to grant interim relief is denuded even if the acts attributable are not of the assessee but of the revenue or of the Tribunal itself. The power of the Tribunal, therefore, to continue interim relief is not overriden by the language of the third proviso to Section 254(2A). This would be in consonance with the view taken in Kumar Cotton Mills Pvt. Ltd (supra). There would be power in the Tribunal to extend the period of stay on good cause being shown and on the Tribunal being satisfied that the matter could not be heard and disposed of for reasons not attributable to the assessee. 5.07. The result of the aforesaid discussion would be that by section 35C(2A) of the Central Excise Act it cannot be inferred a legislative intent to curtain / withdraw power of the Appellate Tribunal to extend stay beyond the total period of 365 days. However, the aforesaid extension of stay beyond the period of total 365 days from the date of grant of initial stay would always be subject to the subjective satisfaction by the learned Appellate Tribunal and on an application made by the assessee / appellant to extend stay and on be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stay, however, on being subjectively satisfied by the learned Appellate Tribunal and on an application made by the assessee / appellant to extend stay and on being satisfied that the delay in disposing of the appeal within a period of 365 days from the date of grant of initial stay, is not attributable to the appellant / assessee and that the assessee is not at fault and therefore, while considering each application for extension of stay, the learned Appellate Tribunal is required to consider the facts of each case and arrive at subjective satisfaction in each case whether the delay in not disposing of the appeal within the period of 365 days from the date of initial grant of stay is attributable to the appellant assessee or not and/or whether the assessee / appellant in whose favour stay has been granted, has cooperated in early disposal of the appeal or not and/or whether there is any delay tactics by such appellant / assessee in whose favour stay has been granted and/or whether such appellant is trying to get any undue advantage of stay in his favour or not. Therefore, while passing such order of extension of stay, learned Appellate Tribunal is required to pass a speaking ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the application for extension of stay appropriately. Thus, on expiry of maximum period of 180 days the assessee/appellant is required to submit application for extension of stay each time and the Appellate Tribunal is required to consider the individual case and pass a speaking order, as stated hereinabove. By the aforesaid it may also not be understood that the Appellate Tribunal may go on extending the stay indefinitely and may not dispose of the appeals within stipulated time i.e. within 365 days from the date of grant of initial stay and/or at the earliest. All efforts shall be made by the learned Appellate Tribunal to dispose of the appeals at the earliest more particularly in a case where stay is operative against the revenue. The learned Appellate Tribunal and/or registrar of the Appellate Tribunal is required to maintain separate register with respect to the appeals in which stay has been granted fully and/or partially and appeals in which no stay has been granted and the Appellate Tribunal must and shall give priority to the appeals in which stay has been granted, continued and/or extended. So far as the Question No.2 is concerned, i.e. Whether the learned Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal within stipulated time is not attributable to the assessee / appellant. However, at the same time, it may not be construed that widest powers are given to the Appellate Tribunal to extend the stay indefinitely and that the Appellate Tribunal is not required to dispose of the appeals at the earliest. The object and purpose of section 35C(2A) of the Act particularly one of the object and purpose is to see that in a case where stay has been granted by the learned Appellate Tribunal, the learned Appellate Tribunal is required to dispose of the appeal within total period of 365 days, as ultimately revenue has not to suffer and all efforts should be made by the learned Appellate Tribunal to dispose of such appeals in which stay has been granted as far as possible within total period of 365 days from the date of grant of initial stay and the Appellate Tribunal shall grant priority to such appeals over appeals in which no stay is granted. For that even the Appellate Tribunal and/or registrar of the Appellate Tribunal is required to maintain separate register of the appeals in which stay has been granted fully and/or partially and the appeals in which no stay has been granted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 days from the date of initial grant of stay is attributable to the appellant assessee or not and/or whether the assessee / appellant in whose favour stay has been granted, has cooperated in early disposal of the appeal or not and/or whether there is any delay tactics by such appellant / assessee in whose favour stay has been granted and/or whether such appellant is trying to get any undue advantage of stay in his favour or not. Therefore, while passing such order of extension of stay, learned Appellate Tribunal is required to pass a speaking order on each application and after giving an opportunity to the representative of the revenue Department and record its satisfaction as stated hereinabove. Therefore, ultimately if the revenue department is aggrieved by such extension in a particular case having of the view that in a particular case the assessee has not cooperated and/or has tried to take undue advantage of stay and despite the same the learned Appellate Tribunal has extended stay order, revenue can challenge the same before the higher forum / High Court. 6.0 Now, so far as the reliance placed upon decision in the case of Maruti Suzuki (India) Limited (supra) by lea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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