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The high court of Uttarakhand passed a judgement on 19^th april 2022 in the case of M/S Doon Defence Academy and others v. The Central Board of Indirect Taxes & Customs and others (Writ Petition (M/S) No. 566 of 2022) the case was presided by Honourable justice Mr. Sharad Kumar Sharma

FACTS OF THE CASE

The petitioner in the first round of litigation had approached the Writ Court by preferring a Writ Petition, being Writ Petition No. 605 of 2020, principally, as against the action which was being proceeded to be taken by issuance of the show cause notice on 23rd October, 2019, and simultaneously, a writ of mandamus was also sought by the petitioner, for the refund of the amount referred to in the relief clause.

When the matter was pending consideration after the grant of interim order on 5th March, 2020, by the Coordinate Bench of this Court, the petitioner by an order dated 25th November, 2020, opted out to withdraw the Writ Petition with liberty reserved for him to approach the Settlement Commission under Chapter-V of the Central Excise Act, 1944. The process of settlement of a dispute; is contained under the provisions contained under Chapter V. The procedure prescribed on receipt of an application under Section 32E, is regulated by the procedure prescribed under Section 32F and the implications thereof of Sub-section (6) of Section 32F, would be, that if the reference of the dispute, which has been made to be decided by the Settlement Commission under Section 32 of the Act, if that has not been decided within the time stipulated under Sub-section (6) of Section 32F, the proceedings thereof referred to before the Settlement Commission, would automatically abate and as a consequence of that abatement, the proceedings would revive back to be decided by the principal adjudicating authority, as would be apparent from the simplicitor language of Sub- section (6) of Section 32F,

In this case, after the orders having being passed by this Court on 25th November, 2020, the matter travelled before the Settlement Commission, but due to lack of Coram, the Settlement Commission, could not decide the case within the time frame prescribed under Sub-section (6) of Section 32F, hence, the proceedings before Settlement Commission, automatically abated, and consequent to it, the effect of adjudicating the case, stood relegated back to the ‘Adjudicating Authority’, as per the implications of the provisions contained under Sub-section (6) of Section 32F

The Settlement Commission, could not have adjudicate upon the issue referred to or sought to be referred to by the petitioner, by an order dated 5th March, 2020, passed by this Court, admittedly, it stood abated and consequent to which, the impugned order of 2nd March, 2022, has been passed, whereby, it had been observed, that as per the implications of Section 83 of the Finance Act, 1994, and as an effect of abatement under Section 32F (6), the proceedings are to be relegated back to be decided by the Adjudicating Authority. The Adjudicating Authority, who has been conferred with the power to decide the case, exercises its power and procedure of adjudication under Section 11-A of the Act, which itself is a self-inbuilt mechanism, where a case of the petitioner has to be decided as per the procedure contemplated under Section 11-A. In fact, what attempt the petitioner intended to solicit from the Court was that as a consequence of the notice of 2nd March, 2022, the matter ought to be relegated to the Settlement Commission in the light of the order passed by the Coordinate Bench on 25th November, 2020.

JUDGEMENTS

In that view of the matter and for the reasons though there are various apprehensions expressed by the petitioner, but it is too premature stage to consider any consequential action, which may be punitive in nature to be taken, or which could be a ground for the petitioner to carve out an exception for him to permit him to avail his recourses before the Settlement Commission by overriding the effect of the abatement, as a consequence of the legal implications of Sub- section (6) of Section 32F. In fact, if any punitive or consequential action is taken by the Adjudicating Authority, it is not that under the Act, the petitioner is left remediless, because after the decision is taken by the Adjudicating Authority, his right of Appeal and Second Appeal is still protected under the Statute itself.

Hence, in the light of the aforesaid reasons, so far as the order by way of show cause dated 2nd March, 2022 is concerned, as passed by the Superintendent, in fact, it is left open for the petitioner to get adjudicated all the issues before the Adjudicating Authority, as per the terms of Section 32F (6). Hence, I am of the view that at this stage, the exception, which was attempted to be carved out by the petitioner to relegate him to the Settlement Commission, is not available to him for the reason being, that even as per the own conduct of the petitioner, when the matter was relegated by this Court before the Settlement Commission and if the same was not being able to be decided within the period of nine months provided therein, the Act itself provided an opportunity to the petitioner to move an appropriate application for transfer of the settlement proceeding before any other competent Settlement Commission, which the petitioner has not voluntarily availed. Though despite of the extension having been granted, the matter could not be decided by the Settlement Commission, hence, I am of the view that the order of 2nd March, 2022, relegating the petitioner before the Adjudicating Authority, is well within the ambit of exercise of powers under Section 32F (6), which obviously has to be decided as per Section 11 of the Central Excise Act 1945.

Thus, for the reasons aforesaid, the Writ Petition lacks merits, hence, the same is accordingly dismissed.

click here to view the judgement

JUDGEMENT REVIEWED BY ANANTH PAI