Judicial Discipline - High Court upholds Cost imposed on Commissioner by Tribunal
CAN costs be imposed on an adjudicating Authority?
Our CESTAT did it at least twice in recent times. In the Coca Cola case - 2015-TIOL-613-CESTAT-DEL, the Tribunal imposed a cost of Rs. 25,000 on the adjudicating Commissioner.
In Okay Glass case - , the Tribunal imposed a cost of Rs. 10,000 on the Commissioner who adjudicated the impugned order.
In the first case, we understand that the Commissioner paid the cost out of his own pocket, while in the second case, the Department took the matter in appeal to the High Court.
In 2015-TIOL-428-CESTAT-DEL, dated 09.02.2015, CESTAT observed,
The conduct of the Commissioner in passing the impugned order, which was in course of de-novo proceedings is depreciable. The order is in contumacious disregard of the Tribunal's directions, besides having been passed by disregarding the Appellant's plea that during the period of dispute, they had not taken the cenvat credit in proportion to the use of inputs/input services in or in relation to the manufacture of the exempted final products and the report of jurisdictional Superintendent supporting this contention of the Appellant.
It is this type of irresponsible adjudication which is burdening this Tribunal with mounting pendency, besides increasing the cost of compliance with the tax laws for the assessees. Safeguarding the interests of the Revenue does not mean that a duty demand must be confirmed ignoring the facts on record, pleas made by the assessee and the judgments of the Tribunal and the courts. Such irresponsible exercise of adjudication not only represents a cost for the assessee, who has to waste his time and money in pursuing the appeals, but also a cost for the Tribunal being run with tax payer's money, which has to waste its time in deciding appeals against orders which should never have been passed .
What we find disturbing is that the tendency to pass such irresponsible adjudication orders is increasing and if unchecked, it would result in collapse of the dispute resolution mechanism and no amount of increase in the number of benches can bring down the increasing pendency of appeals. We, therefore, hold that ends of justice require that some cost is imposed on the Commissioner in this matter.
Accordingly, a Cost of Rs10,000/- (Rupees ten thousand only) is imposed on the Respondent Commissioner which is to be paid by the Commissioner who has adjudicated this matter. The amount of cost is to be paid to the Registry of the Tribunal within four weeks of the date of this order. The registry is directed to send a copy of this order to the Chairman, Central Board of Excise & Customs for his information .
As predictable, Revenue's response was to appeal to the High Court. The High Court did not find any error in the observations made by the Tribunal with regard to "judicial discipline".
The High Court quoted from several decisions of the Supreme Court on this subject:
1. when the judgment of a Court is confirmed by the higher court, the judicial discipline requires that Court to accept that judgment, and it should not in collateral proceedings write a judgment contrary to the confirmed judgment.
2. judicial discipline and propriety are the two significant facets of administration of justice. Every court is obliged to adhere to these principles to ensure hierarchical discipline on the one hand and proper dispensation of justice on the other.
3. for any reason, the subordinate authority is of the view that the directions issued by the Court are contrary to statutory provision or well established principles of law, it can approach the same Court with necessary application/petition for clarification or modification or approach the superior forum for appropriate reliefs.
4. it was obligatory on the part of the authorities concerned to comply with the order passed by the Collector (Appeals). The authorities were bound to do so in view of the doctrine of judicial discipline.
5. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an objectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws.
6. if a subordinate tribunal refuses to carry out directions given to it by a superior tribunal in the exercise of its appellate powers, the result will be chaos in the administration of justice.
7. judicial discipline requires and decorum known to law warrants that appellate directions should be taken as binding and followed. In the hierarchical system of courts which exist in this country, it is necessary for each lower tier, including the Courts of Appeal, to accept loyally the decisions of the higher tiers.
8. it is not only the higher court's judgments that are binding precedents for the Information Commission, but even those of the larger Benches of the Commission should be given due acceptance and enforcement by the smaller Benches of the Commission. The rule of precedence is equally applicable to intra-court appeals or references in the hierarchy of the Commission.
Maybe it is not taught in NACEN that adjudicators are bound by the orders of the higher authorities - we find even newly recruited Assistant Commissioners showing utter contempt for the orders of even the Supreme Court.
Now most probably, the department will take this matter to the Supreme Court - at our cost.
Please see the High Court judgement in