CESTAT has power to Grant Stay and Extension - but extension is not automatic - Karnataka High Court's gift to Consultants
IT is now almost an axiom that Tribunal has inherent power to grant stay, but the Law states that such a stay is automatically vacated after 180 days. So the Legislature expected the Tribunal to decide the case within six months, but the ground reality is that the Tribunal is not able to decide the case even within six years! Now for no fault of the assessee, if the Tribunal is not able to decide the case within six months, should the assessee be punished?
The procedure was – just before the expiry of six months an application is made to the Tribunal to extend the stay. This Stay is listed and the matter is heard and the Tribunal invariably extends the stay. The precious time of the Tribunal is wasted and the Consultant gets money for arguing the case before the Tribunal for extension of stay. The Tribunal started giving orders that the stay will continue beyond 180 days till the case is decided.
Revenue did not like this and took the matter to the High Court which held that extension cannot be automatic.
Now we are back to Square One. Before the expiry of 180 days, an application has to be filed for extension of stay and a hearing date is fixed when the case has to be argued. Obviously assessee cannot be made to suffer for Tribunal's delay and extension of stay will invariably be granted. Only one person benefits – the Consultant/lawyer.
We will bring you this judgement tomorrow.