TaxTMI 
TaxTMI 
09 Mar 2013 
An article by:-
CA. Pradeep Jain
Bharat Rathore
Aashish Bohra
Introduction:-
It is said that justice can be delayed but can never be denied but this statements has lost its value by announcement of budget 2013-14. Government seeks that justice can be denied if there is delay in the judicial proceedings even if there is no fault of assessee.
Previous provision:-
Sub Section 2A of Section 35C of the Central Excise Act, 1944 reads as below:-
“(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 proiso, the stay order shall, on the expiry of that period, stand vacated.”
Thus, where the stay is granted by the Tribunal, the appeal was to be decided within time limit of 180 days of stay order.
Supreme Court judgment:-
It is held by the Supreme Court in the case of Kumar Cotton Mills Pvt. Ltd.(2005 (1) TMI 114 - SUPREME COURT OF INDIA) That the Tribunal has got power to extend the stay. The relevant portion of the Supreme Court is as under:-
“ 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”
As per above judgment, the Tribunal has inherent power to extend the stay period if it is satisfied that the matter could not be heard and disposed off for a reason not attributable to the assessee.
Provision inserted by Budget, 2013:-
The following proviso is to be inserted in section 35C (2A) of the Central Excise Act, 1944:-
“Provided also that where such appeal is not disposed of within the period specified in the first proviso, the Appellate Tribunal may, on an application made in this behalf by a party and on being satisfied that the delay in disposing of the appeal is not attributable to such party, extend the period of stay to such further period, as it thinks fit, not exceeding one hundred and eighty-five days, and 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.”.
In view of above proviso, if the appeal is not disposed off within total period of 365 days from the date of stay order, the stay shall stand automatically vacated even in case when there is no fault of assessee.
While Concluding:-
Budget, 2013 has been harsh to fix the ceiling on the stay order’s applicability period. Now, the situation will be grave as the assessee will be required to pay off the dues if the case is not heard within 365 days of stay order. It is fact that there is so much pendency of appeals in all benches of the tribunal due to many reasons like vacant post of members, public holidays, etc. In such circumstances, it will be very difficult to dispose off appeal within the given period. Thus, in most of the cases, the assessees will be forced to pay the dues even if there is no mistake on their part. By making this amendment, the government has tried to scrap the verdicts of hon’ble Supreme Court in the case of Kumar Cotton Mills Pvt. Ltd. Anyhow, this amendment is going to prove the saying that “Justice delayed is justice denied”.