TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Appeal Dismissal Upheld: Pre-deposit Requirement Emphasized</h1> The Tribunal's dismissal of the assessee's appeals due to non-payment of the mandatory pre-deposit under Section 35-G of the Central Excise Act was upheld ... Maintainability of appeal - appeal dismissed on the ground of non-payment of pre-deposit being 7.5% of the disputed demand duty - HELD THAT:- The appeal is a creature of statute. In the present case, the legislature has chosen to grant conditional right of appeal to the assessee. Thus, the assessee could have maintained its appeal only against pre-deposit of 7.5% of disputed demand of duty. In absence of pre-deposit, the Tribunal has not erred in rejecting the appeal of the assessee. Again, these being statutory proceeding of further appeal, it is not open for this Court to exercise its inherent power that otherwise may arise under Article 226 of the Constitution of India to grant any relief contrary to the statutory law - Further, it may be noted, neither challenge to the validity of law may arise in these proceedings nor that challenge appears pending in any proceeding. In the interest of justice, to allow the assessee appellant one opportunity to appeal (on facts), indulgence is granted with consent of learned counsel for the revenue such that subject to the assessee making the pre-deposit (@ 7.5%) within a period of two weeks from today. ISSUES PRESENTED AND CONSIDERED 1. Whether a first appellate authority/Tribunal correctly dismisses a statutory appeal for non-compliance with the pre-deposit condition stipulated by the statute (pre-deposit of 7.5% of the disputed duty) governing maintenance of the appeal. 2. Whether this Court in exercise of its constitutional writ jurisdiction (Article 226) or inherent powers may grant relief contrary to the statutory pre-deposit requirement for entertaining a statutory appeal. 3. Whether factual hardship (attachment of assessee's assets and alleged irreparable injury) can excuse non-compliance with the statutory pre-deposit or justify equitable indulgence by this Court. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Validity and effect of dismissal of statutory appeal for non-payment of statutory pre-deposit Legal framework: The statutory scheme conditions the right to prefer an appeal on satisfaction of a pre-deposit requirement (7.5% of disputed demand). The appeal is a creature of statute and the statutory pre-deposit provision is mandatory for maintenance of the appeal. Precedent Treatment: The Court expressly followed a coordinate-bench decision addressing similar facts and legal questions, treating that decision as persuasive and aligned with the statutory scheme. No conflicting binding precedent was found in the record. Interpretation and reasoning: The Court treated the pre-deposit condition as a substantive statutory prerequisite that the appellate forum may enforce by dismissing defective appeals where the pre-deposit is not made. The decision reasons that the legislature's deliberate choice to render the right to appeal conditional must be respected; the Tribunal did not err in dismissing the appeal for non-compliance. Ratio versus Obiter: Ratio - a statutory pre-deposit condition for maintenance of appeal is mandatory and supports dismissal where not complied with. Obiter - none material beyond affirming the coordinate-bench treatment. Conclusion: The Tribunal correctly dismissed the statutory appeal for non-payment of the prescribed pre-deposit; the appeal as originally filed was not maintainable without payment of 7.5% of the disputed duty. Issue 2 - Scope of this Court's writ jurisdiction/inherent powers vis-à-vis a statutory pre-deposit requirement Legal framework: Article 226 and inherent judicial powers permit relief in appropriate cases, but such powers are subject to statutory commands and cannot be exercised to grant relief contrary to clear statutory provisions governing statutory appeals. Precedent Treatment: The Court relied on the principle that, in proceedings governed by a specific statutory scheme providing conditional rights, the High Court ordinarily cannot use writ jurisdiction to override express statutory requirements; a coordinate-bench decision with similar holdings was followed. Interpretation and reasoning: The Court held that because the appeal is a creature of statute with a conditional right expressly provided by the legislature, it is not open to the Court to frustrate that statutory condition by exercising Article 226 in a manner contrary to the statutory scheme. The Court noted the absence of any challenge to the validity of the pre-deposit provision in the proceedings before it, and observed no pending constitutional challenge to the statute in any other proceeding. Ratio versus Obiter: Ratio - this Court will not, in exercise of writ or inherent jurisdiction, grant relief that contravenes an unchallenged statutory pre-deposit requirement for maintaining an appeal. Conclusion: The Court cannot, by invoking Article 226 or inherent powers, dispense with the statutory pre-deposit requirement; relief inconsistent with the statute is not permissible absent a valid challenge to the statutory provision itself. Issue 3 - Effect of factual hardship (asset attachment/irreparable injury) on compliance with statutory pre-deposit and discretion to grant indulgence Legal framework: While statutory pre-deposit is mandatory, courts possess equitable discretion in appropriate cases to grant limited indulgence (e.g., time to make deposit) provided such indulgence does not subvert the statutory scheme; the availability of such indulgence is contingent on parties' requests and consent of the revenue where relevant. Precedent Treatment: The Court referred to coordinate-bench authority that declined relief on merits but did not foreclose limited indulgence in exceptional factual circumstances. The Court treated such authorities as guiding but not as overriding the statute. Interpretation and reasoning: Recognising the assessee's pleaded factual hardship (attachment of all assets and claimed irreparable injury), the Court observed that although it cannot exempt the statutory condition, it may in the interest of justice grant a limited opportunity to comply with the statutory requirement. The Court exercised such limited discretion to set aside the Tribunal's dismissal subject to a condition precedent: payment of the prescribed pre-deposit within a specified short period. The Court emphasised that this indulgence is procedural and conditional, enabling registration of the appeal as a regular appeal once compliance occurs; it does not alter or negate the statutory pre-deposit requirement itself. Ratio versus Obiter: Ratio - while the statutory pre-deposit is mandatory, the Court may, in the interest of justice and without contravening the statute, allow a limited time-bound opportunity to make the prescribed pre-deposit and thereby restore the appeal for adjudication. Obiter - commentary that no challenge to validity of the pre-deposit provision was presented. Conclusion: Factual hardship does not excuse non-payment of a statutory pre-deposit, but the Court may grant a narrowly tailored, time-bound indulgence to enable compliance; upon such compliance the Tribunal must register and hear the appeal on merits. Cross-references and interaction among issues 1. Issues 1 and 2 are linked: the mandatory nature of the statutory pre-deposit (Issue 1) limits the scope of judicial intervention under Article 226 (Issue 2). 2. Issue 3 operates within the constraints established by Issues 1 and 2: the Court may not dispense with the statutory requirement but may grant procedural indulgence to enable statutory compliance without abrogating the statute. Overarching Conclusion The statutory pre-deposit requirement for maintenance of appeal is mandatory and justified dismissal of the appeal for non-compliance; this Court will not nullify that statutory condition by exercising writ jurisdiction, but may, in appropriate factual circumstances, grant a limited time-bound indulgence to enable compliance, after which the appellate forum must register and hear the appeal on merits.
TaxTMI 
TaxTMI 
