2019 (7) TMI 397 - HC - Central Excise

High Court overturns Tribunal order, emphasizes natural justice principles in refund stay application

The Commissioner of Central GST Mumbai West Commissionerate Versus Central Excise and Service Tax Appellate Tribunal, West Zonal Branch & Another

The High Court of Bombay allowed the petition in favor of the Petitioner, setting aside the nonspeaking order by the Customs, Excise and Service Tax ... Principles of natural justice - non-speaking order - stay of order sanctioning refund - HELD THAT:- The order is self evidently a nonspeaking order. It even does not record the basic dispute between the parties leading to the refund. Nor does it record the submission of the parties. Consequently no examination of the submissions made by the Petitioner in support and/or to oppose the application, is found in the impugned order. It merely rejects the application by stating that it finds 'no cogent and valid reasons' to stay the refund. Thus, the impugned order is clearly in breach of principles of natural justice. An order disposing of stay application, may not be a detailed order. Nevertheless, the order must indicate the dispute before it, the submissions of the parties in brief and due consideration of the issue before it on the basis of the submissions made by the parties on the touchstone of the principles for grant of stay - In the absence of the impugned order meeting the above test, it becomes a nonspeaking order. Petitioner's stay application restored to the file of the Tribunal for fresh consideration and disposal in accordance with law - petition allowed. Issues:Challenge to order rejecting stay of refund application - Breach of principles of natural justice in the impugned order - Nonspeaking order by the Tribunal - Restoration of stay application for fresh consideration.Analysis:The case before the High Court of Bombay involved a challenge to an order passed by the Customs, Excise and Service Tax Appellate Tribunal rejecting the Petitioner-Revenue's application seeking a stay of the order sanctioning a refund of Rs. 8.71 Crores to the Respondent. The impugned order was criticized for being nonspeaking as it failed to record the basic dispute leading to the refund or the submissions made by the parties. The High Court noted that while a detailed order for a stay application may not be necessary, it must at least indicate the dispute, parties' submissions, and consideration of the issue based on those submissions. The absence of such essential elements rendered the impugned order a breach of natural justice.The High Court emphasized the importance of adherence to principles of natural justice and the need for orders to provide a brief overview of the dispute, parties' submissions, and consideration of relevant issues. In this case, the Court found the impugned order to be deficient in these aspects, leading to its characterization as a nonspeaking order. Consequently, the High Court set aside the impugned order dated 31st December, 2018, and directed the Tribunal to reconsider and dispose of the Petitioner's stay application afresh in accordance with the law. The Court stressed the importance of expeditious disposal of the stay application by the Tribunal upon remand.In conclusion, the High Court allowed the petition in favor of the Petitioner, highlighting the necessity for orders disposing of stay applications to contain essential details regarding the dispute, parties' submissions, and consideration of relevant issues. The restoration of the stay application for fresh consideration aimed at upholding the principles of natural justice and ensuring a fair and transparent adjudication process by the Tribunal.