Central Excise/Customs/Service Tax/Income Tax - Can Appellate Tribunal Dismiss an Appeal for want of prosecution?
MANY a time, the CESTAT/ITAT dismisses an appeal because the appellant or his Counsel is not present in the Court when the case is called for hearing. The Supreme Court on Friday delivered a landmark judgement holding the Tribunal has no such powers.
In this case, the CESTAT had dismissed an appeal by a Central Excise assessee on the ground that neither the appellant nor his counsel was present on the date of hearing.
The Supreme Court found that the Act enjoins upon the Tribunal to pass order on the appeal confirming, modifying or annulling the decision or order appealed against or may remand the matter. It does not give any power to the Tribunal to dismiss the appeal for default or for want of prosecution in case the appellant is not present when the appeal is taken up for hearing.
The Supreme Court noted that a similar question had come up before the Supreme Court in an Income Tax case reported in 1969, wherein the Supreme Court then observed,
"The scheme of the provisions of the Act relating to the Appellate Tribunal apparently is that it has to dispose of an appeal by making such orders as it thinks fit on the merits. It follows from the language of Section 33(4) and in particular the use of the word "thereon" that the Tribunal has to go into the correctness or otherwise of the points decided by the departmental authorities in the light of the submissions made by the appellant. This can only be done by giving a decision on the merits on questions of fact and law and not by merely disposing of the appeal on the ground that the party concerned has failed to appear.....
.....Thus looking at the substantive provisions of the Act there is no escape from the conclusion that under Section 33(4) the Appellate Tribunal has to dispose of the appeal on the merits and cannot short-circuit the same by dismissing it for default of appearance."
So, the Supreme Court held that the Tribunal could not have dismissed the appeal filed by the appellant for want of prosecution and it ought to have decided the appeal on merits even if the appellant or its counsel was not present when the appeal was taken up for hearing. The High Court also erred in law in upholding the order of the Tribunal.
The Supreme Court directed the Tribunal to hear the appeal on merits and imposed costs of Rs. 25,000 on the Revenue.
This does not mean that you need not appear for the hearing - there is always a danger of the appeal being dismissed on merits.
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