Tax Appeals - Waiver of Pre-deposit - High Court Lays down some guidelines
IN a recent Order in a writ petition against an Order by a Central Excise Appellate Commissioner directing 50% pre-deposit, the AP High Court referred to the decision of the Supreme Court in Benara Valves Ltd., vs. CCE reported in - , which explained the legal position as :
1. It has become an unfortunate trend to casually dispose of stay applications by referring to decisions in Siliguri Municipality and Dunlop India cases without analysing factual scenario involved in a particular case.
2. While dealing with the waiver application, twin requirements of considerations i.e., consideration of undue hardship aspect and imposition of conditions to safeguard the interest of Revenue have to be kept in view.
3. Undue hardship is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. Under Indian conditions expression "Undue hardship" is normally related to economic hardship. "Undue" which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances.
4. For a hardship to be "undue" it must be shown that the particular burden to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it.
5. The word "undue" adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant.
6. The other aspect relates to imposition of condition to safeguard the interests of the Revenue. This is an aspect which the Tribunal has to bring into focus. It is for the Tribunal to impose such conditions as are deemed proper to safeguard the interest of the Revenue. Therefore, the Tribunal while dealing with the application has to consider materials to be placed by the assessee relating to undue hardship and also to stipulate conditions as required to safeguard the interests of the Revenue.
The High Court inferred from the above position that if a litigant has got strong prima facie case, then the same can be treated within the fold of undue hardship. But, there are no guidelines in which cases and when undue hardship relatable to prima facie case can be perceived. It depends upon each and every individual case.
Without laying down any exhaustive guidelines, the High Court felt that following will be useful for adjudicating the application for waiver of full deposit by the Commissioner as well as the Court.
i) If on apparent reading of the matter, it is found that the order impugned is passed patently without having any jurisdiction, meaning thereby, if the authority concerned lacks inherent jurisdiction to pass such order, such a case would be termed to be one of the strongest prima facie case and a litigant should not be subjected to suffer with a condition of pre-deposit in a case of this nature till the disposal of appeal and full waiver would be justified.
(ii) When it is found that the impugned order was passed though having jurisdiction but on apparent non-application of appropriate law or mis-application of law, patently contrary to Supreme Court decision or High Court decision on identical issue which has reached finality, it will also be a strongest case where full waiver be justified. In cases where it is found that there has been an arguable case, apparently, without inviting the counter arguments, the matter cannot be decided, the litigant should be subjected to make pre-deposit to some extent. But, where it is found that there is no absolute debatable case, in those cases, appeals may be allowed to be preferred, but, with the full deposit.
In this Appellate Republic, more time and money are spent on saving the deposit than winning the case.