1 IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION WRIT WRIT WRIT PETITION NO.533 OF 2009 PETITION NO.533 OF 2009 PETITION NO.533 OF 2009 Nedumparambil P.George ... ... Petitioner Vs. Union of India & 2 ors .. Respondents Mr.Sushant S.Murthy i.b Mr.M.R.Baya for Petitioner Mr.V.H.Kantharia a/w Mr.J.B.Mishra for Respondents .. CORAM CORAM CORAM : F.I.Rebello and : F.I.Rebello and : F.I.Rebello and J.H.Bhatia, J.H.Bhatia, J.H.Bhatia, JJ JJ JJ DATED DATED DATED : 22nd April, 2009 : 22nd April, 2009 : 22nd April, 2009 P.C. ORAL ORAL ORAL JUDGMENT: (Per F.I.Rebello, J ) JUDGMENT: (Per F.I.Rebello, J ) JUDGMENT: (Per F.I.Rebello, J ) 1. Rule. Heard forthwith. 2. The Tribunal on 3rd January, 2007 passed an order waiving pre-deposit of penalty and also stayed recovery till the disposal of the appeal. 3. The respondent no.2 by three orders directed recovery of amounts from various parties set out therein including the petitioner herein. The amounts claimed are Rs.5,00,000/-; Rs.20,000/- and Rs.1,00,000/-. 4. It is submitted that once there was an interim order pending appeal it was not open to the respondents to demand the amount which was the subject matter of proceedings pending before the tribunal. 2 5. On the other hand, on behalf of the respondents, learned counsel for the respondents draws our attention to section 129 B (2A). The relevant portions of which reads as under : 129 B (2A):The Appellate Tribunal shall, where it is possible to do so, hear and decide every appeal within a period of three years from the date on which such appeal is filed: Provided that where an order of stay is made in any proceeding relating to an appeal filed under sub-section (1) of section 35B, the Appellate Tribunal shall dispose of the appeal within a period of one hundred and eighty days from the date of such order: Provided further that if such appeal is not disposed of within period specified in the first proviso, the stay order shall, on the expiry of that period, stand vacated. " It is therefore, submitted that considering the second proviso to the said sub-section the stay order stands vacated by operation of law if the appeal filed under section 35B (1) is not disposed of within one hundred and eighty days. Section 2A was introduced by Act 20 of 2002 with effect from 11th May, 2002. 6. We have heard learned counsel for the parties. There is nothing on record to show that the appeal could not be heard on account of any act on the part of the petitioners herein. The Tribunal itself,inspite of the fact that 3 section 129 B (2A) was on the statute book, granted stay pending the hearing and final disposal of the appeal. The appeal was filed in the year 2006.(and as such on account of the stay in terms of the proviso to sub-section 2A the period of 180 days has expired). Considering the date of filing of the appeal and the first proviso, the tribunal was duty bound to dispose of the appeal within 180 days in a case where stay is granted. Admittedly, in the instant case, the tribunal has not disposed of the appeal within 180 days. When the Tribunal granted stay that by itself would indicate that the tribunal itself was conscious of the fact that it is not in a position to hear and dispose of the appeal within 180 days. It is in that context that the second proviso must be considered. 7. A similar issue had come up for consideration before the Supreme Court in Commissioner Commissioner Commissioner of Customs and Central Excise, of Customs and Central Excise, of Customs and Central Excise, Ahmedabad Ahmedabad Ahmedabad vs vs vs Kumar Cotton Mills P.Ltd 2005 (180) Kumar Cotton Mills P.Ltd 2005 (180) Kumar Cotton Mills P.Ltd 2005 (180) ELT ELT ELT 434 (S.C.) 434 (S.C.) 434 (S.C.) wherein in respect of similar provision under the Central Excise Act, this is what the Supreme Court observed : 6. " The sub-section which was introduced in terrorem cannot be construed as punishing the assessees for matters which may be completely beyond their control. For example, manyof the Tribunals are not constituted and it is not possible for 4 such Tribunals to dispose of matters. Occasionally by reason of other administrative exigencies for which the assessee cannot be held liable, the stay applications are not disposed within the time specified. The reasoning of the Tribunal expressed in the impugned order and as expressed in the Larger Bench matter, namely IPCL v Commissioner of Central Excise, Vadodara (supra) cannot be faulted. However, we should not be understood as holding that any latitude is given to the Tribunal to extend the period of stay except on good cause and only if the Tribunal is satisfied that the matter could not be heard and disposed of by reason of the fault of the Tribunal for reasons not attributable to the assessee. " 7. Relying on the said judgment, this Court in the case of Narang Overseas P.Ltd vs Income Tax Narang Overseas P.Ltd vs Income Tax Narang Overseas P.Ltd vs Income Tax Appellate Appellate Appellate Tribunal and others 2007 295 ITR 22 Tribunal and others 2007 295 ITR 22 Tribunal and others 2007 295 ITR 22 (Bom) (Bom) (Bom) in respect of similar provision under the I.T.Act had applied the said ratio and observed that the power to grant interim relief is inherent and inheres in a tribunal vested with the power to finally hear an appeal. A provision like the second proviso must be read to mean that such a power not to continue a stay beyond 180 days, is in those circumstances where the failure is on account of the acts of the appellant. The appeal here could not be disposed of within 180 days. The said proviso cannot be read to defeat the vested right of appeal of an appellant when the appellant is not at fault. We adopt the reasoning given in Narang Overseas P.Ltd (supra.) In our opinion, the case where the appellant is not at fault and 5 the failure is on account of the tribunal to hear the appeal for whatever reason or on account of the acts of the respondent, the law as explained in the judgment in Narang (supra) will have to be applied also under the provisions of the Customs Act. 8. On behalf of the respondent learned counsel submits that the respondent should be directed to to go the tribunal and ask for extension of stay. The second proviso literally read has the effect of vacating the stay on expiry of 180 days. There is therefore no power of extention conferred on the tribunal if the proviso is so read. The proper way to read the second proviso would be, that the Tribunal itself at the hearing of the stay application considering its docket and or the Benches available grants stay till the hearing and final disposal of the appeal. Once the Tribunal grants stay, in the absence of either the appellant or respondent applying for adjournments without justifiable cause with a view to delay the hearing, the Tribunal considering the duty on it is bound to hear and dispose of the appeal within 180 days. If it has granted stay and does not hear the appeal within 180 days then, there is no reason why the stay should not continue till such time the appeal is heard and disposed of in the 6 absence of any failure on part of the appellant. The proviso must be to avoid being declared unconstitutional be read to mean that it applies when the hearing of the appeal within 180 days could not be taken up on account of the persistent conduct or act of the appellant. On the facts of this case, as nothing has been brought to our attention that it was on account of the acts of the petitioner that the appeal could not be heard, the reliefs sought for by the petitioner in the present petition will have to be allowed. 9. Consequently, Rule is made absolute in terms of prayer clause (a). The Tribunal is directed to dispose of the matter within four months expeditiously. { J.H.Bhatia, J } J.H.Bhatia, J } J.H.Bhatia, J } { F.I.Rebello, J } F.I.Rebello, J } F.I.Rebello, J }