2023 (9) TMI 13 - HC - Central Excise

Dismissal of GST Commissioner's Delayed Appeal Stresses Finality of Decisions

Commissioner Central GST and Central Excise J&K Versus Intex Industries SIDCO Industrial Complex

The appeal filed by the Commissioner of Central GST & Central Excise (J&K) Jammu under Section 35 G of the Central Excise Act, 1944 was dismissed ... Condonation of delay of 1488 days in filing appeal - appeal dismissed on the ground of time limitation - HELD THAT:- The similar issue had arisen in an appeal COMMISSIONER OF CGST AND COMMISSIONER OF CENTRAL EXCISE, (J&K) JAMMU VERSUS M/S NARBADA INDUSTRIES [2022 (5) TMI 1361 - JAMMU & KASHMIR HIGH COURT], wherein also the appellant/applicant had sought condonation of delay on similar grounds as have been urged in this application but the Division Bench of this Court did not accept the application and dismissed the appeal as barred by limitation. It is also submitted that the Supreme Court has also considered the matter in COMMISSIONER OF CGST AND CENTRAL EXCISE (J AND K) VERSUS M/S. SARASWATI AGRO CHEMICALS PVT. LTD. [2023 (7) TMI 542 - SC ORDER] and dismissed the SLP. Thus appeal is dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether condonation of a 1,488-day delay in filing an appeal under the relevant statute should be allowed. 2. Whether an assessing/revenue authority can recover amounts earlier refunded to an assessee where the refunds were granted pursuant to a binding precedent that was subsequently overruled by a later Supreme Court decision. 3. Whether a reference made by a tribunal to reconsider its earlier view in light of a subsequent overruling decision is permissible where the earlier orders had attained finality between the parties. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Condonation of Delay and Limitation Legal framework: Appeals under the statute are subject to prescribed limitation periods; condonation of delay is an exceptional remedy requiring adequate grounds and judicial discretion. Precedent Treatment: The Court considered an earlier Division Bench ruling in a similar appeal where condonation was refused and the appeal dismissed as barred by limitation; that ruling was subsequently considered by the apex Court and its reasoning upheld. Interpretation and reasoning: The appellant candidly relied on grounds identical to those rejected earlier. The Court applied the settled approach that where materially identical grounds have been considered and rejected by a coordinate Bench and such reasoning has been affirmed by the apex Court, the same result follows. The pendency of an SLP that was dismissed did not change the limitation analysis; dismissal of the SLP confirms the correctness of the prior limitation outcome. Ratio vs. Obiter: Ratio - where a previous like application for condonation was rejected and that rejection has been affirmed by the higher court, a subsequent identical application lacks merit and should be dismissed as time-barred. Obiter - procedural observations about filing formats (typed copies dispensed with till next date) are incidental. Conclusion: The application for condonation of delay is not allowed and the appeal is dismissed as barred by limitation. Issue 2 - Effect of Subsequent Overruling Precedent on Past Final Orders and Recovery of Refunds Legal framework: Principles of finality of litigation, stare decisis, and public policy against reopening disputes that have attained finality; the law recognizes that judicial decisions binding at the relevant time may create vested rights or final orders between the parties. Precedent Treatment: The Court relied on the reasoning of a prior Division Bench which held that refunds lawfully obtained by an assessee under a then-binding decision cannot be recovered merely because a later Supreme Court decision overruled that earlier precedent. The apex Court has considered and dismissed challenges to that approach, thereby upholding it. Interpretation and reasoning: The Court reasoned that permitting recovery in such circumstances would unsettle finality and open a 'Pandora's box,' enabling perpetual litigation; public policy requires that litigation reach an end. Where an assessee secured refund rights based on an authoritative decision in force at the relevant time and those rights were finalized between the parties, a later overruling of the precedent should not operate retrospectively to disturb concluded matters between those parties. Consequently, a reference by the tribunal to revisit its earlier conclusion in light of an overruling decision was unnecessary and impermissible to disturb finality. Ratio vs. Obiter: Ratio - a subsequent overruling of a precedent does not justify recovery of amounts refunded pursuant to the earlier binding precedent where the matter has attained finality between the parties; a tribunal's reference aimed at reopening such finalized disputes is unnecessary and should not be entertained. Obiter - general remarks on the consequences of allowing retrospective disturbance of past orders were explanatory. Conclusion: Recovery of refunds granted under a binding precedent cannot be pursued after those refunds have attained finality; the tribunal's reference to revisit the matter in light of the subsequent overruling was unnecessary and does not justify relief to the revenue. Issue 3 - Scope and Effect of Tribunal References after Change in Law Legal framework: Tribunals possess limited jurisdiction to make references or reconsider questions of law; such power must be exercised consistently with principles of finality and public policy. Precedent Treatment: The Court treated a reference made by a tribunal in the context of a changed precedential landscape as unnecessary where the earlier decision had become final between the parties, aligning with higher court's treatment that final orders should not be disturbed merely because of later changes in law or precedent. Interpretation and reasoning: Where prior litigation culminated in a final decision relying on an extant precedent, a tribunal should not, by reference, unsettle that finality by invoking a subsequent overruling decision. Doing so would undermine legal certainty and encourage endless relitigation. The Court found the reference order unnecessary in light of these considerations and prior authoritative rulings. Ratio vs. Obiter: Ratio - tribunal references that have the effect of attempting to disturb finalized rights established under then-binding precedent are unnecessary and inappropriate. Obiter - procedural guidance on handling annexures and record formatting is practical and non-decisional. Conclusion: The tribunal's reference was unnecessary; finality of earlier orders prevails despite later overruling precedent, and references should not be used to reopen finalized disputes. Interrelationship and Final Disposition Cross-reference: Issues 1-3 are interrelated - limitation/condonation, finality of orders obtained under then-binding precedent, and the impropriety of tribunal references after later overruling decisions converge to determine that the appeal is time-barred and cannot succeed. Overall Conclusion: Applying the principle that final orders obtained pursuant to binding precedent should not be reopened after a subsequent overruling, and having regard to prior like decisions affirmed by the higher court, the appeal is dismissed as barred by limitation and connected applications are disposed of accordingly.