WRIT PETITION (L) NO. 26651 OF 2022
Asit C. Mehta Financial Services Limited Vs. The Customs Excise and Service Tax Appellate Tribunal (CESTAT)
DATE OF ORDER:
20th October 2022
Justices K.R. Shriram and A.S. Doctor
Petitioner : Asit C. Mehta Financial Services Limited and Asit C. Mehta
Respondent : The Customs Excise And Service Tax Appellate Tribunal (CESTAT),
Commissioner of Customs (Preventive) and Union of India
According to the Bombay High Court, the deadline set down in Section 130A(4) of the Customs Act of 1962 for the Customs Excise and Service Tax Appellate Tribunal (CESTAT) to send the statement of the matter to the High Court is only directive and not mandatory.
Section 130A (1) of the Customs Act, 1962
- According to Section 130A (1) of the Customs Act, either the other party or the specified revenue agencies may submit an application to the High Court asking for a directive to the Appellate Tribunal to send any legal issues emerging from the Appellate Tribunal's ruling to the High Court.
Section 130A (4) of the Customs Act, 1962
- Section 130A of the Act talks about application to high court.
- 130A(4) talks about the duration of time within which the appellate tribunal is to refer the matter to the high court.
- It is to send the matter to the high court within 120 days.
- The Bombay High Court ordered the respondent no. 1/CESTAT to deliver the petitioner's statement of the matter, Asit C. Mehta Financial Services Limited, as soon as practicable in response to a request filed under Section 130 A (1) of the Customs Act, 1962.
- The petitioner filed a writ petition with the Bombay High Court, alleging that the CESTAT had neglected to send the statement of case, asking for the dismissal of the case that the CESTAT was supposed to bring against the assessee and that was filed by the Commissioner of Customs (Preventive).
The main issue raised here was whether Section 130(4) of the Customs Act 1962 mandatory or directive.
ARGUMENTS OF THE PETITIONER
- In a petition filed under Section 130A (1) of the Customs Act of 1962, the petitioner, Asit C. Mehta Financial Services Limited, argued before the Bombay High Court that in accordance with Section 130A (4) of that Act, the Appellate Tribunal must prepare a statement of the case and refer it to the High Court within 120 days of receiving a direction from the High Court to do so.
- The petitioner also argued that the High Court should dismiss the case for lack of prosecution because the CESTAT had neglected to file the statement of facts.
ANALYSIS BY THE COURT
- Despite finding that respondent no. 2/ Commissioner of Customs (Preventive) had not abandoned the application submitted in accordance with Section 130A (1), the High Court determined that the 120-day deadline set forth in Section 130A (4) of the Customs Act is merely directive in nature and not imperative.
- The court ruled that the CESTAT is an independent judicial body that the revenue authorities have no influence over it.
- The bench concluded that the tax authorities may lose their right to have a legal question that the Customs Act wants to be reviewed by the High Court if the time limit for submission of the case, as specified in Section 130A (4), is interpreted as mandatory.
- It was noted that a party shouldn't be denied a statutory right due to its own fault or the fault of a public entity over which it has no authority.
- The Court cited the case of Raja Benoy Kumar Sahas Roy v. Commissioner of Income Tax (1953), in which the Calcutta High Court was analysing the provisions of Section 66(1) of the Income Tax Act, 1922, which allowed the Commissioner or the assessee to request that any legal issue arising out of the Appellate Tribunal's decision be referred to the High Court.
- The Appellate Tribunal was obligated to provide a statement of the matter and submit it to the High Court within 90 days of receiving the application under Section 66(1) of the Income Tax Act of 1922.
- The Bombay High Court held that the time limit within which the CESTAT is required to make a reference, as prescribed in Section 130A (4) of the Customs Act, is only directory in nature while ruling that Section 66(1) of the Income Tax Act, 1922, was pari materia to Section 130A (4) of the Customs Act.
- The Court dismissed the petition and ordered the CESTAT to file the statement of case within six weeks.
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