TaxTMI 
TaxTMI 
2003 (7) TMI 483
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....deem fit. (2) Subject to the provisions of this Act,- (a )the jurisdiction of the Appellate Tribunal may be exercised by Benches thereof; (b)a Bench may be constituted by the Chairperson with one or more members as the Chairperson may deem fit; (c )the Benches of the Appellate Tribunal shall ordinarily sit at New Delhi and at such other places as the Central Government may, in consultation with the Chairperson, notify; (d)the Central Government shall notify the areas in relation to which each Bench of the Appellate Tribunal may exercise jurisdiction. (3) Notwithstanding anything contained in sub-section (2), the Chairperson may transfer a Member from one Bench to another Bench. (4) If at any stage of the hearing of any case or matter it appears to the Chairperson or a Member that the case or matter is of such a nature that it ought to be heard by a Bench consisting of two Members, the case or matter may be transferred by the Chairperson or, as the case may be, referred to him for transfer, to such Bench as the Chairperson may deem fit." Upon a plain reading of the aforesaid provisions, it is clear that the Appellate Tribunal consists of a Chairperson and such number of memb....
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....nthakumari Menon). The Cause List for 22-1-2003 indicates that the eighteen appeals being appeal No. 194/1999 etc. were listed for hearing before the said Member. The interim applications (IAs) for waiver of pre-deposit of penalty amounts along with the said appeals were taken up for hearing and the learned Member after considering the submissions of both sides did not find any ground for dispensing with the entire penalty amounts. However, she directed that pre-deposit to the extent of 80% of the penalty amount be waived. Thereafter the matters were adjourned to 26-3-2003 for reporting compliance and also for hearing and disposal of the appeals. 5. Being aggrieved by the order dated 22-1-2003, eight writ petitions were filed by some of the parties before the High Court at Bombay. It is pertinent to note that in these writ petitions the jurisdiction/competence of the learned Member in passing the order dated 22-1-2003 was not challenged. By an order dated 18-2-2003 the High Court at Bombay was of the opinion that it was a fit case for full waiver of pre-deposit. While disposing of the writ petitions, the High Court at Bombay noted that the appeals were ready for final hearing and ....
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....des to such posting to the submissions. The Office is directed to put up those cases neatly. Appeal Nos. 214 to 216 posted to the same date. The cases reposted for 9-4-2003 will be posted to 3-4-2003. Miss Awantika Keswani, Advocate submits that she is appearing for the other two batches of cases posted for 9-4-2003 and that she takes notice of in the posting coupled with submissions that no separate notice is necessary. 3. For hearing and disposal call on 3-4-2003. (P.N. Santhakumari) Member" 7. From the aforesaid order two things are clear. Firstly, the learned Member rejected the application for referral to a Bench comprising of two Members on the ground that it did not involve any complicated question of law and was not a case fit for such referral. Secondly, all the matters i.e., the connected appeals were clubbed together and posted for hearing on 3-4-2003 and this posting of matters was consented to by Counsel present. 8. The next order on record is the impugned order dated 3-4-2003. To appreciate the full scope of the controversy, it is necessary to set out the entire order:- "Date 3-4-2003 Appeal Nos. 194 to 200, 203, 214 to 223/99 Shri T.K. Gadoo, learned Counsel ....
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....ondent prays for time to move to Hon'ble High Court against my order referring the appeals before Division Bench. He is granted two weeks time to bring the stay order failing which these appeals will be listed for hearing. Issue dasti. (R.N. Sahay) Chairperson" 9. The aforesaid order dated 3-4-2003 was passed not by the said Member but by the Chairperson of the Appellate Tribunal (Respondent No. 1). In the impugned order dated 3-4-2003 it is mentioned that the Chairperson had earlier passed an order on 26-3-2003. How this order came to be passed is a mystery. Mr. A.K. Panda, the learned Senior Counsel appearing on behalf of the petitioner, has placed on record the Cause List of matters before the Chairperson on 26-3-2003. The Cause List does not disclose any of the said eighteen appeals. Clearly, these matters were not posted for hearing before the said Chaiperson. However, it is indicated in the impugned order dated 3-4-2003 that he passed an order on 26-3-2003. There is no copy of the actual order dated 26-3-2003 on record. The only reference is the quoted portion in the impugned order dated 3-4-2003. By the purported order dated 26-3-2003 the Chairperson held that the appeals....
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.... before the Division Bench and the Chairperson, as mentioned in the impugned order dated 3-4-2003, granted two weeks' time failing which the appeal would be listed for hearing. 10. To recapitulate, on 22-1-2003 all the eighteen appeals were listed before the said Member. On 19-2-2003 three appeals (195/1999, 197/1999 and 200/1999) were listed before the said Member. On 11-3-2003 seven matters (Appeal Nos. 217/1999 to 223/1999) were listed before the said Member when she directed that the seven appeals and other connected appeals be listed for hearing on 3-4-2003. On 26-3-2003, contrary to what is indicated in the impugned order dated 3-4-2003, none of the eighteen appeals were listed for hearing before any Bench of the Appellate Tribunal. On 3-4-2003 all the eighteen matters were listed for hearing before the Division Bench headed by the Chairperson. It is interesting to note that the impugned order dated 3-4-2003 though ostensibly passed in the eighteen appeals which were supposedly listed before the Division Bench has, in point of fact, been passed by the Chairperson acting alone. Even the tenor of the order suggests that it was passed by the Chairperson alone and the other memb....
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....der dated 26-3-2003 passed by the Chairperson is merely an administrative order. A judicial order cannot be set at naught by an administrative order. Accordingly, the judicial order dated 11-3-2003 passed by the said Member would stand and the purported administrative order dated 26-3-2003 passed by the Chairperson would be of no effect. For this proposition the learned Counsel for the petitioner has referred to the decisions of the Supreme Court in the case of Union of India v. K.M. Shankarappa [2001] 1 SCC 582 (Paragraph 7); Jaswant Sugar Mills Ltd. v. Lakshmi Chand AIR 1963 SC 677 (Paragraphs 11-13); Shankarlal Aggarwal v. Shankarlal Poddar AIR 1965 SC 507 (Paragraph 13); and B.B. Rajwanshi v. State of U.P. [1988] 2 SCC 415 (Paragraph 13). 12. The Supreme Court in Jaswant Sugar Mills' case (supra) has set out the tests or criteria for determining whether an act or decision is judicial. In paragraph 13 of the said report it is stated thus :- "13. To make a decision or an act judicial, the following criteria must be satisfied: (1) it is in substance a determination upon investigation of a question by the application of objective standards to facts found in the light of pre-exis....
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....the appeals to a bench consisting of two members. Nor could the Chairperson have entertained such an application. 14. Therefore, I am in agreement with the submission of the learned Senior Counsel appearing on behalf of the petitioner that after disposal of the application by the said Member on 11-3-2003 it was not open to the parties to approach the Chairperson for exercise of concurrent jurisdiction. Though I am of the opinion that Mr. Panda's reliance upon the decision of the Supreme Court in Bank of India v. Lekhimoni Das [2000] 3 SCC 640 for this proposition is misplaced. He relied upon paragraph 8 which is to the following effect :- "8. As a general principle where two remedies are available under law one of them should not be taken as operating in derogation of the other. A regular suit will not be barred by a summary and a concurrent remedy being also provided therefor, but if a party has elected to pursue one remedy he is bound by it and cannot on his failing therein proceed under another provision. . . ." (p. 650) Section 20(4) would come into play only when a matter is already being heard by the Chairperson or a Member, as the case may be. This would be clear from the....
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....ave felt that the case was of all-India importance and was required to be decided by a larger Bench of three members. Such an administrative order is not open to scrutiny under Article 226 of the Constitution of India except in extraordinary cases wherein the order is shown to be a mala fide one. No such allegation was made by the Department against the President of the Tribunal on the facts of the present case." (p. 465) According to Mr. Nayar the present petition contains no allegations of mala fides in respect of the impugned orders dated 26-3-2003 and 3-4-2003. As such, according to him, the impugned order cannot be interfered with under Article 226 and the petition ought to be dismissed. I am unable to agree with this. The aforesaid Supreme Court decision in ITAT's case (supra) is distinguishable from the present case and it, in any event, does not militate against the case of the petitioner. This will be clear presently. In that case the President of the Income Tax Appellate Tribunal (ITAT) by an administrative order had constituted a Special Bench for hearing three appeals which involved interpretation of section 115J of the Income-tax Act, 1961 in respect of which there wa....
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....dicial order and not in exercise of his administrative powers. It is of course true that in any pending matter before a bench of two learned members, if it is felt by the learned members that a Special Bench is required to be constituted, they can pass a judicial order in the light of the procedure laid down by Regulation 98-A. But such a situation had never arisen on the facts of the present case. We have already seen above that the two learned members had recommended to the President to constitute a Special Bench for resolving the controversy centering round the construction of section 115J of the Income-tax Act by their communication dated 25-9-1992. That was styled as a reference under section 255(3) of the Income-tax Act. It was merely a recommendation for invoking the administrative powers of the President under section 255(3) for constituting a Special Bench. It was certainly not a reference under section 255(3) read with Regulation 98-A." (p. 464) Then again, the Supreme Court observed as under :- "It is also difficult for us to appreciate how the High Court could persuade itself to hold that when none of the Benches of the Tribunal had made any reference by judicial orde....
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....icial order had been passed under Regulation 98-A and only an administrative order had been passed by the President of ITAT. Here the facts are different. There is a judicial order passed by the said Member on 11-3-2003 and there is a conflicting and subsequent administrative order passed by the Chair-person. The question is which order, the earlier judicial order or the later administrative order, will hold the field? This question was not before the Supreme Court. The question before it was quite different. It was - whether the President ITAT could at all pass an order constituting a Special Bench while acting in his administrative capacity or could he do so only by a judicial order? That is not the question here. Secondly, the Supreme Court did not hold that an administrative order such as the one impugned herein was not open to scrutiny under Article 226 of the Constitution. In fact, instances where the Court could interfere are indicated in the said decision itself when it observed that :- "It is, however, true that the President in exercise of his administrative powers under section 255(3) cannot just constitute a Special Bench without any rhyme or reason. Such an administra....
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....ary powers...." (p. 1349) On the strength of these observations of the Supreme Court in the case of the powers of the Chief Justice of the High Court of Rajasthan, Mr. Rajiv Nayar, learned Senior Counsel appearing for the respondents sought to draw a parallel with respect to the powers exercised by the Chairperson of the Appellate Tribunal. I don't see how the decision of the Supreme Court in Prakash Chand's case (supra) is applicable in the facts of the present case. In the case before the Supreme Court a Single Judge of the High Court of Rajasthan had arrogated a particular roster to himself, contrary to the determination made by the Cheif Justice of the High Court? In view of the applicable ordinance and Rules, the Supreme Court held that the Single Judge could not do so. In the present case when the said Member passed the order dated 11-3-2003 she was fully entitled to do so. Her order does not suffer from lack of powers or jurisdiction. When the said member rejected the prayer to refer the matter for hearing by a Bench of two members, she had the jurisdiction and authority to do so under the provisions of section 20(4) of FEMA. On the other hand the Single Judge of the High C....
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.... it is further submitted on behalf of the respondents that the orders dated 26-3-2003 and 3-4-2003 passed by the Chairperson nowhere state that they have been passed in exercised of powers under section 20(4) of the said Act. According to the respondents, the Chairperson had exercised his jurisdiction to place the appeal before the Division Bench in pursuance of the powers vested in him under section 30 of FEMA. To examine this submission it would be necessary to first set out the provisions of section 30 of FEMA :- "30. Power of Chairperson to transfer cases.-On the application of any of the parties and after notice to the parties, and after hearing such of them as he may desire to be heard, or on his own motion without such notice, the Chairperson may transfer any case pending before one Bench, for disposal, to any other Bench." There is no quarrel with the proposition that the Chairperson can, either upon an application by any party or suo motu, transfer any case pending before one bench for disposal to any other bench. But, this is not what has happened in the present case. The Chairperson has not transferred the appeals pending before the said Member for disposal to another ....