In a recent ruling the Allahabad High Court held that the mandatory condition of pre-deposit under Section 35F of the Central Excise Act, 1944 (CEA) to file appeals before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) cannot be waived in the writ jurisdiction.
The petition was filed under Article 226 of the Constitution of India wherein the writ petitioner is aggrieved by an order passed by the respondent no.2/Commissioner, Central Goods and Service Tax, Ghzaiabad. The alternative prayer of the petitioner is that the petitioner be relegated to appeal jurisdiction under Section 86 of the Finance Act, 1994 and direct the Tribunal to grant waiver of pre-deposit.
In a catena of judgements, the Supreme Court and various High Courts have categorically held that the condition of the pre-deposit cannot be waved/modified by the High Court in its extraordinary discretionary writ jurisdiction. Any discretion to be exercised by the writ Court is judicial in nature and is required to be exercised only in accordance with law.
If the High Courts were to interfere/tinker with the amount of pre-deposit to be deposited, the entire provision of pre-deposit would become otiose. It is to be noted that in the erstwhile period there was no clause of pre-deposit. In those circumstances, the High Court would, after going into the merits waive/reduce the pre-deposit. Such a position does not exists now, and therefore, there is no question of waver of the pre-deposit.
A Single Bench of Justice Shekhar B. Saraf observed that “In my view, an alternative efficacious remedy is available to the petitioner wherein, the petitioner has already filed his appeal. The very fact that the petitioner has already filed the appeal, precludes this Court from now examining this matter in writ jurisdiction. The petitioner cannot be allowed to be sitting on the fence. The filing of this petition is nothing but an after thought as the petitioner wants to escape the liability of payment of pre-deposit, which is mandated by law.”
“The judgements cited by the counsel appearing on behalf of the petitioner in Ravi Gupta and Shukla & Brothers are in relation to the period prior to 2014 wherein the amendments were brought in by the legislature in the respective Acts. Subsequent to the amendments, the law with regard to waiver of the pre-deposit by the High Court has taken a ‘U turn’ and now the High Courts cannot in any manner exercise any discretion in waiving payment of pre-deposit” the Court noted.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
