The Tribunal dismissed the excise appeal of the assessee for non-appearance. The application filed by the assessee for restoration of the appeal was also dismissed. The dismissal was challenged before the High Court on the ground that under s. 35C of the Excise Act (corresponding to s. 254 of the Income-tax Act) the Tribunal had no power to dismiss an appeal for non-appearance of the Appellant. It had to decide on merits. HELD:
(i) In Chenniappa Mudaliar 74 ITR 41 the Supreme Court struck down R. 34 of the Tribunal Rules, 1946 (now Rule 24) and held that the Tribunal had no power to dismiss an appeal for non-appearance of the Appellant. This view has been followed in the context of the Excise Act in Viral Laminates 100 E.L.T. 335 (Guj.) and Prakash Fabricators & Galvanizers 130 E.L.T 433 (Del.).
(ii) While not inclined to depart from the view taken by the two High Courts, reference must be made to Sunderlal Vs. Nandramdas AIR 1958 MP 260 where it was observed that though the Act does not give any power of dismissal, it is axiomatic that no court or tribunal is supposed to continue a proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every tribunal possesses. This was approved in Dr. P. Nalla Thampy Vs. Shankar 1984 (Supp) SCC 631. In New India Assurance vs. Srinivasan (2000) 3 SCC 242, it was held that everycourt or judicial body or authority, which has a duty to decide a lis between two parties, inherently possesses the power to dismiss a case in default. Where a case is called up for hearing and the party is not present, the court or the judicial or quasi judicial body is under no obligation to keep the matter pending before it or to pursue the matter on behalf of the complainant who had instituted the proceedings. That is not the function ofthe court or, for that matter of a judicial or quasi judicial body. In the absence of the complainant, therefore, the court will be will within its jurisdiction to dismiss the complaint for non prosecution.
(iii) Accordingly, though the Rule conferring power on the Tribunal has been struck down, one cannot altogether lose sight of the rule that everycourt or tribunal has an inherent power to dismiss a proceeding for non prosecution when the petitioner/appellant before it does not wish to prosecute the proceeding. In such a situation, unless the statute clearly requiresthe court or tribunal to hear the appeal / proceeding and decide it on merits it can dismiss the appeal / proceeding for non-prosecution. The power must be exercised judiciously and taking into consideration all the facts and circumstances of the case.
Note: Rule 24 of the Tribunal Rules requires that the appeal be disposed of on merits if the appellant is not present. See also Tribhuwan Kumar 294 ITR 401 (Raj) and Rajendra Prasad Borah 302 ITR 243 (Gau) where it was heldthat the Tribunal could not dismiss the appeal for non-appearance. Multiplan 38 ITD 320 (Del) was impliedly held not to be good law.
FULL TEXT OF THE CASE LAW
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CENTRAL EXCISE APPEAL NO. 62 OF 2009
Appellant M/s.Chemipol
122123,Pioneer Industrial Estate
Subhash Road, Jogeshwari East,
Mumbai 400 060 ..
versus
Respondents 1) Union of India,
Law Ministry, Ayakar Bhavan,
Mumbai 400 020.
2) The Commissioner of Central
Excise, ThaneII,
Nav Prabhat, Chembur
4th floor, Ranade Road, Dadar,
Mumbai 400 028. ..
Mr.Ashok Shetty with Mr.R.V.Shetty and Ms.Rita K. Joshi for the appellant.
Mr. P.S. Jetly for respondents.
CORAM : F. I. REBELLO AND
D.G. KARNIK, JJ
DATED : 17th September 2009
ORAL JUDGMENT:(Per D.G.Karnik, J)
1. This appeal is directed against the order dated 27th February 2006 passed by the Customs, Central Excise and Services Tax Appellate Tribunal (for short “the Tribunal”) rejecting the application filed by the appellantfor restoration of its appeal for non prosecution.
2. The appellant had filed an appeal before the Tribunal bearing No. E/2822/98 – Mum challenging the order in original dated 30th April 1998 passed by the Commissioner of Central Excise (Appeals). The appeal was posted for hearing on 25th May 2005. As the appellant was absent, the Tribunal dismissed the appeal. Application filed by the applicant for setting aside the order of dismissal for non prosecution was rejected by the Tribunal. Hencethe appeal.
3. Learned counsel for the appellant submitted that under the Central Excise Act, 1944 (for short “the Act”) the Tribunal has no power to dismiss an appeal for default in appearance of an appellant. Even if the appellant is absent, the Tribunal is required to decidethe appeal on merits. In support, learned counsel referred to and relied upon a decision of Gujarat High Court in Viral Laminates Vs. Union of India, 1998(100) E.L.T. 335 (Guj.) and the decision of the Delhi High Court in Prakash Fabricators & Galvanizers Pvt.Ltd. Vs. Union of India, 2001(130) E.L.T 433 (Del.)
4. Per contra, Mr.Jetly, learned counsel for the Revenue, submitted that today all Courts and Tribunals are flooded with litigation and there is a docket explosion of unprecedented magnitude. When the Tribunal is not in a position to decide appeals and other proceedings before it in a reasonable time, it would not be appropriate to burden the Tribunal with the task of deciding appeals on merit when the appellant himself is absent and/or is not interested in prosecutingthe appeal . We should not shut our eyes to the reality that if the Tribunal is required to spend its valuable time in deciding the appeals on merits when the appellant is absent, then valuable time of the Tribunal would be lost without hearing the other appeals which are pending since long. He further submitted that in any event, in the absence of assistance from the appellant, the Tribunal may be seriously handicapped in deciding an appeal on merits and the possibility of the Tribunal decidingthe appeal erroneously and laying down the law which may not be fully correct. We should not therefore follow the view taken by the Gujarat and Delhi High Courts but hold that a Tribunal can dismissthe appeal in default of appearance of the appellant. While we see some merit in the submissions of Mr.Jetly, we are not inclined to depart from the view taken by the two High Courts. No otherHigh Court has taken a different view. Secondly, the Gujarat High Court, for striking down Rule 20 of the Rules, has relied upon a decision of the Supreme Court in Commissioner of Income Tax Vs. S. Cheniappa Mudaliar, AIR 1969 SC 1068, wherein the Supreme Court struck down Rule 34 of the Income Tax (Appellate Tribunal) Rules, 1946 which was similar to Rule 20 of the Rules.
5. We would however refer to the observations of Hidayatullah, Chief Justice (as His Lordship then was) in Sunderlal Mannalal Vs. Nandramdas Dwarkadas AIR 1958 MP 260 wherein it was observed:
Now the Act does not give any power of dismissal. But it is axiomatic that no court or tribunal is supposed to continue a proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every tribunal possesses …”
This statement of law was approved by the Supreme Court in Dr. P. Nalla Thampy Thera Vs. B.L. Shankar 1984 (Supp) SCC 631. Again in New India Assurance Co.Ltd. vs. R. Srinivasan (2000) 3 SCC 242, the Supreme Court observed at paragraph no.18:
“That every court or judicial body or authority, which has a duty to decide a list between two parties, inherently possesses the power to dismiss a case in default. Where a case is called up for hearing and the party is not present, the court or the judicial or quasi judicial body is under no obligation to keep the matter pending before it or to pursue the matter on behalf of the complainant who had instituted the proceedings. That is not the function ofthe court or, for that matter of a judicial or quasi judicial body. In the absence of the complainant, therefore, the court will be will within its jurisdiction to dismiss the complaint for non prosecution. So also, it would have the inherent power and jurisdiction to restore the complaint on good cause being shown for the non appearance of the complainant.
6. It is thus clear that though part of the Rule 20 of the Rules has been held to be unconstitutional by the Delhi High Court relying upon the decision of the Supreme Court, we cannot altogether lose sight of the rule that every court or tribunal has an inherent power to dismiss a proceeding for non prosecution when the petitioner/appellant before it does not wish to prosecute the proceeding. In such a situation, unless the statute clearly requires the court or tribunal to hear the appeal/proceeding and decide it on merits it can dismiss the appeal/proceeding for. Of course, the power must be exercised judiciously and taking into consideration all the facts and circumstances of the case. The Tribunal presently has its benches only at four or five places in India. An appellant who on account of his place or residence or business being far away from the place of sitting for the Tribunal may not except at a high cost be able to attend the hearing especially when as we know that the matters are adjourned for several times. In such an event, if the appellant files on record his submissions in writing, the Tribunal must decide the appeal on merits on the basis of the said submissions. In that case, the Tribunal would not have a power to dismiss the appeal for but where the appellant in spite of notice is persistently absent and the Tribunal on facts of the case is of the view that the appellant is not interested in prosecuting the appeal, it can in exercise its inherent power to dismiss the appeal for non prosecution. Of course, the conclusion of the Tribunal that the appellant is not interested in prosecuting the appeal must be reached on the facts of each case and not merely on account of absence of an appellant on a solitary occasion.
7. In the present case, the Tribunal has dismissed the appeal on the absence of the appellant only on one occasion. The fact that the appellant immediately thereafter applied for restoration of the appeal shows his intention that he was interested in prosecuting the appeal and may be he had a justifiable cause for his absence on one occasion. In the circumstances, the Tribunal ought to have restored the appeal to the file.
8. Mr.Jetly then submitted that the impugned order arises out of a second application for restoration of the appeal filed by the petitioners. Second application for restoration was not maintainable as the first application was dismissed. As we have held that initial order of dismissal itself was without jurisdiction as the appeal was dismissed for default without there being a power, the fact of dismissal of the first application would not come in the way of the petitioner. The Tribunal ought to have corrected its mistake on being brought to its notice that petitioner was interested in prosecuting the appeal and as such the Tribunal had no power to dismiss the appeal for default. In the light of that, Tribunal ought not to have dismissed the second application on a technical ground. For these reasons, the petition is allowed and the matter is restored to file of the Tribunal. The Tribunal shall hear the appeal on merits after notice to the petitioner.
(D.G. KARNIK, J) (F.I. REBELLO, J)
