By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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Appeal filed prior to 06/08/2014, but dismissed merely for default in pre-deposit and not on merits, can be restored by Tribunal in case sufficient compliance is made later.
Facts
By making payment of Rs.28 lakh towards total pre-deposit of Rs.65 lakh, appellant filed miscellaneous application seeking permission for payment of balance pre-deposit of Rs. 37 lakh in installments which was dismissed by Tribunal. Subsequent application for restoration of appeal after making payment of balance pre-deposit on various dates was also dismissed by the Tribunal by stating that Tribunal had become functus offficio after passing final order. Substantial questions raised before the Hon’ble High Court were (i) whether the Tribunal is correct in dismissing appeal and petition seeking payment of predeposit in installments (as pre-deposit was not mandatory prior to 06/08/2014) and (ii) whether the Tribunal has erred by dismissing application for restoration of appeal in spite of full payment of pre-deposit.
Held
The Hon’ble High Court observed that appellant had an arguable case on merits, which is one of the main factors to be considered while considering the application for restoration. It held that it cannot be said that the Tribunal has become functus officio once the Tribunal has passed an order, not on merits, not while finally determining the issue and not an order which has merged with the Appellate Court order.
The High Court distinguished the decision in the case of Lindit Exports vs. Commissioner, 2013 297 ELT A15 (SC), that in the instant case, there is no merger of the Tribunal order with the order of the High Court, as challenge as to dismissal of the restoration application is under consideration. The High Court also observed that Tribunal has power and jurisdiction under Rules 20 and 41 of CESTAT (Procedure) Rules, 1982 so as to recall its orders in ends of justice and further held that when the Act or Rules in question do not specifically prohibit restoration of appeal dismissed on grounds of nondeposit of amount, the Tribunal certainly has power and jurisdiction to recall its earlier order, if the ends of justice require such a course of action. Accordingly, the Tribunal’s orders for dismissing the restoration application and the appeal were set aside.
