2015 (11) TMI 28 - HC - FEMA

High Court Upholds Tribunal's Pre-Deposit Requirement for Appeal Process

Tilak Raj Versus Joint Director of Enforcement Directorate, Jalandhar

The High Court of Punjab & Haryana upheld the Appellate Tribunal for Foreign Exchange's decision requiring the petitioner to pre-deposit 15% of the ... Tribunal while directing the petitioner(s) to deposit 15% of the amount of penalty imposed and to furnish reliable security for the balance amount of 85% as a pre-deposit for hearing of the appeal has noticed that the petitioner (s) has an arguable case and it would cause hardship in case the waiver is not allowed, but no case of complete waiver was made out. - petitioner(s) has been required to pre-deposit 15% of the penalty amount as a condition precedent for hearing of the appeal, which is reasonable and justified. In the judgment in A. Tajudeen's case (2014 (10) TMI 367 - SUPREME COURT) relied upon by the learned counsel for the petitioner, the principle of law enunciated therein, is well recognized, however, being based on individual fact situation involved therein would be of no help to his case. - no merit in the instant writ petitions - Decided against assessee. Issues:Petition under Articles 226/227 to quash order of Appellate Tribunal for Foreign Exchange directing pre-deposit of penalty amount and security for balance amount. Tribunal's direction to deposit 15% of penalty amount challenged as unreasonable and unjustified.Analysis:The judgment by the High Court of Punjab & Haryana dealt with a bunch of three petitions where the issues were deemed identical. The main petition sought to quash the order of the Appellate Tribunal for Foreign Exchange directing the petitioner to deposit 15% of the penalty amount and furnish security for the remaining 85% as a pre-deposit condition for hearing the appeal. The petitioner contested this requirement, citing it as unreasonable and unjustified, drawing support from the judgment in A. Tajudeen v. Union of India (2015) 4 SCC 435.The High Court, after hearing the arguments, found no merit in the appeal. It noted that the Tribunal had acknowledged that the petitioner had an arguable case and would face hardship without the waiver, but a complete waiver was not justified. The Tribunal's decision to require a 15% pre-deposit and security for the balance amount was considered fair and appropriate based on the circumstances and the interest of revenue, citing precedents like Monotosh Saha v. Special Director, ED 2008(12) SCC 359 and Banara Valves Ltd. v. Commissioner Central Excise and Another (2006) 13 SCC 347.The Court emphasized that while the principle of law in A. Tajudeen's case was recognized, the specific facts of that case did not apply here. Ultimately, the High Court dismissed the writ petitions, upholding the Tribunal's directive for the petitioner to pre-deposit 15% of the penalty amount. However, in the interest of justice, the Court extended the time for depositing the amount as directed by the Tribunal until a specified date to ensure the appeals could be heard on merits if the deposit was made within the extended timeline.