Order Obtained by Fraud - Recalled by CESTAT

By Vijay Kumar

THIS case has all the elements of a Bollywood thriller. It all started with a simple order of the Tribunal dated 29.10.2015 dismissing the appeal of a party - something that happens in the Tribunal every day. We reported the case in 2016-TIOL-574-CESTAT-DEL.

The assessee proceeded to the Supreme Court in appeal and before appealing to the Supreme Court, it also filed a Rectification of Mistake (ROM) Petition in the Tribunal arguing that limitation though pleaded was not considered.

The Supreme Court vide its order dated 08.07.2016, ordered deposit of the duty demanded along with interest.

A little later, on 2.8.2016, the Tribunal heard the ROM application, and allowed the appeal itself. We reported the case in 2016-TIOL-2471-CESTAT-DEL

Now what happens to the appeal in the Supreme Court? It was alleged that while arguing the ROM application, the advocate of the assessee did not bring to the notice of the Tribunal, the order of the Supreme Court. The Economic Times carried a big story on this case alleging fraud by the advocate firm which is a top leading law office. It was also reported that the President had ordered that cases of this advocate should not be posted before a particular judge who passed the above order.

Revenue is aggrieved by the order of the Tribunal recalling its earlier order when the matter is pending before the Supreme Court. Revenue calls it forum shopping. The advocate who is a big name in the field submitted that Department has leaked the information to the press, in respect of a matter, which is subjudice, with a mala fide intention to create pressure on the Bench of the Tribunal.

Anyway, the Tribunal found that it was not correct on the part of the advocate to suppress the information about the appeal pending in the Supreme Court. The Tribunal recalled its earlier order dated 2.8.2016. This means the original order passed in 2015 comes back to life and the party's appeal is dismissed. The Tribunal also sent a copy of its order to the Bar Council of India.

On a similar issue, the Mumbai Bench of the CESTAT recently dismissed a ROM application. Please see 2016-TIOL-2921-CESTAT-MUM

Now, this raises several questions.

1. Can an assessee appeal to a higher Court (HC, SC) and simultaneously file a ROM application before the Tribunal?

2. Is it forum shopping?

3. Does the Tribunal have the power to recall its order?

Please also see 2016-TIOL-171-SC-ST, 2016-TIOL-2251-HC-MUM-ST & DDT 2947.

For more details on this case, please see Breaking News