2021 (10) TMI 202 - HC - Customs

High Court directs Tribunal to expedite appeal listing without prejudging case

The High Court directed the Customs, Excise and Service Tax Appellate Tribunal to list the petitioner's appeal before the appropriate Bench by a specified ... Freezing of bank account - deposit of 7.5% pending appeal - interim recovery measures during pendency of appeal - jurisdiction to issue notice under section 87(b)(i) of the Finance Act,1994 - directions to appellate tribunal for listing - non-consideration of meritsDirections to appellate tribunal for listing - freezing of bank account - Direction to the Customs, Excise and Service Tax Appellate Tribunal to list the petitioner's appeal on or before a specified date and disposal of the writ petition. - HELD THAT: - The Court, without adjudicating the substantive merits of the challenge to the impugned notice or the propriety of freezing the bank account, directed the Registry of the Customs, Excise and Service Tax Appellate Tribunal to place the petitioner's appeal before an appropriate Bench on or before 10th October, 2021. The Court recorded that it had not expressed any view on the merits and left the rights and contentions of the parties open. Consequential procedural relief of communication of this order to the Tribunal registry was also directed and the writ petition together with pending applications was disposed of. [Paras 6, 7]The Registry of the Customs, Excise and Service Tax Appellate Tribunal was directed to list the petitioner's appeal on or before 10th October, 2021; the writ petition and pending application were disposed of, with no comment on merits.Deposit of 7.5% pending appeal - interim recovery measures during pendency of appeal - jurisdiction to issue notice under section 87(b)(i) of the Finance Act,1994 - Entitlement to de-freeze the bank account and the merits of the petitioner's challenge to the notice under section 87(b)(i) of the Finance Act, 1994 were not decided. - HELD THAT: - Although the petitioner contended that it had deposited the mandatory 7.5% and relied upon a departmental circular to resist further recovery measures during the pendency of appeal, the Court explicitly refrained from adjudicating these contentions. The Court left open the question of the validity of the impugned notice, the applicability of the circular, and any entitlement to de-freeze the account, reserving consideration of those matters to the appropriate forum and to the adjudication of the appeal itself. [Paras 7]No adjudication on merits; rights and contentions of the parties on de-freezing and the validity of the notice were left open.Final Conclusion: Writ petition disposed by directing the Customs, Excise and Service Tax Appellate Tribunal to list the petitioner's appeal by 10th October, 2021; no adjudication on the merits of the challenge to the freezing order or entitlement to de-freeze the bank account, and the parties' rights are left open. Issues:Challenging a notice freezing a bank account under the Finance Act, 1994 and seeking directions for de-freezing, compliance with mandatory deposit requirements, delay in hearing the appeal by the Appellate Tribunal, lack of response from the Respondent No. 2, and the functionality of the Customs, Excise and Service Tax Appellate Tribunal.Analysis:The petitioner challenged a notice issued by Respondent No. 2 under section 87(b)(i) of the Finance Act, 1994, directing the freezing of the petitioner's bank account. The petitioner contended that the notice was issued without jurisdiction and in violation of a Circular from Respondent No. 1. The Circular stated that no coercive measures for recovery shall be taken during the pendency of an appeal if the mandatory deposit is made. The petitioner had complied with the deposit requirement before filing the appeal, citing settled law that no further recovery should be made during the appeal. Reference was made to a decision by the Customs, Central Excise and Service Tax Tribunal in support of this argument.The petitioner also highlighted the delay in the appeal process, with the appeal pending for two years without a hearing. Despite filing an application for an early hearing, there was no progress, causing significant losses to the petitioner. Respondent No. 2 did not respond to requests for de-freezing the bank account, further exacerbating the situation.During the proceedings, it was noted that the Customs, Excise and Service Tax Appellate Tribunal was functional and regularly hearing appeals. Consequently, the High Court directed the registry of the Tribunal to list the petitioner's appeal before the appropriate Bench by a specified date. The Court clarified that its directive did not comment on the merits of the case, leaving the rights and contentions of all parties open. The High Court's order was communicated to the Tribunal, leading to the disposal of the writ petition and pending application.This comprehensive analysis of the judgment outlines the key issues raised, the arguments presented by the parties, and the final directives issued by the High Court, providing a detailed understanding of the legal proceedings and outcomes.