M/S Kerala Co-Operative Developmenbt And Welfare Fund Board vs. Union Of INDIA
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JUDGMENT The petitioner, a Board constituted under the Kerala Co-operative Development and Welfare Fund Scheme 2000, is a Government establishment. It caters to the needs of the Society members through various welfare schemes. The respondents subjected the petitioner to sales tax; it has led to dispute. Though the petitioner has filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore, it would not have it numbered and further processed because of the statutory mandate: Section 35F of the Central Excise Act mandates that the appellant should deposit 7.5% of the disputed tax as a pre-condition to have the appeal entertained. Complaining of financial crisis, the petitioner has approached this Court.
The petitioner's counsel, after elaborating on the welfare activities the Board undertakes, submits that it is entirely a Government Organisation having no profit motive. According to him, 7.5% of the disputed tax comes to about Rs.1.35 crores. The Welfare Board functions on a shoestring budget, only with an aim to serve the indigent. So it cannot, according to him, afford to pay such staggering amounts. He has also submitted that the Board can only write to the Government to contribute that amount and the Government may not be inclined to come to the Board's rescue.
Therefore, the learned counsel fervently pleads that given the nature of the petitioner's activities and the very fact that it is an establishment by the Government, the rigour of Section 35F has to be relaxed. In this context he has also pointed out that the Courts have consistently held that the statutory stipulation of pre-condition can always be subjected to judicial review under Article 226 of the Constitution of India.
The Standing Counsel for the respondent, on the other hand, submits that the legislature has amended Section 35F and fixed 7.5% as the pre-condition. According to her, the amendment dispenses with the discretion of judicial forums. She has also pointed out that if the Court interferes with the statutory mandate, it will open flood gate and every appellant will first come to this Court before approaching the CESTAT.
Heard Sri G.Shivadas, the counsel appearing on the petitioner's counsel's behalf, and Ms. Anjali Menon, the counsel appearing on the Standing Counsel's behalf.
Indeed, there is no dispute about the legal proposition that the statutory rigour of any pre-condition can be interfered with, but only under justifiable circumstances, through a judicial review. A case on point is the judicial pronouncement of the Supreme Court in Government of Andra Pradesh v. P. Laxmi Devi1. That said, I further hasten to add that it is no license to the appellant to rush to this Court and seek exemption from statutory constrains. To earn this relaxation, the appellant ought to establish cogent conditions that merit attention.
In this case, I reckon the petitioner has established sufficient grounds for scaling down he predeposit under Section 35F of the Act.
To begin with, the petitioner is a Government agency catering to the indigent members of the Co-operative Societies. It maintains many welfare schemes and entirely depends on Government funds. As it is a Government organisation, if at all there is adjudication adverse to the petitioner, the respondents have ways and means to recover the tax dues.
I, therefore, hold that imposing 7.5% of the disputed tax as a pre- condition to maintain the appeal is rather onerous. Instead, I scale it down to 3%. 1 (2008) 4 SCC 720 Nevertheless, if the adjudication goes against the petitioner, it must make good the deficit 4.5% thereafter. Once the petitioner deposits 3% of the disputed tax before the CESTAT in four weeks, the Tribunal will entertain the appeal. With these observations I dispose of the writ petition. DAMA SESHADRI NAIDU JUDGE jjj APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE PHOTOCOPY OF THE LETTER DATED 28.04.2015 ISSUED BY THE SUPERINTENDENT,CENTRAL EXCISE AND CUSTOMS DEPARTMENT EXHIBIT P2 TRUE PHOTOCOPY OF THE LETTER DATED 12.05.2015 ISSUED BY THE SUPERINTENDENT,CENTRAL EXCISE AND CUSTOMS DEPARTMENT EXHIBIT P3 TRUE PHOTOCOPY OF THE LETTER DATED 15.05.2015 OF THE JOINT REGISTRAR/SECRETARY OF THE BOARD ALONG WITH A WRITE UP AND ITS ENGLISH TRANSLATION. EXHIBIT P4 TREU PHOTOCOPY OF THE LETTER DATED 02.12.2015 OF THE JOINT REGISTRAR/SECRETARY OF THE BOARD (WITHOUT ITS ENCLOSURES)ALONG WITH ITS ENGLISH TRANSLATION EXHIBIT P5 TRUE PHOTOCOPY OF THE LETTER DATED 30.12.2015 ISSUED BY THE SUPERINTENDENT (PREV.),CENTRAL EXCISE AND CUSTOMS DEPARTMENT. EXHIBIT P6 TRUE PHOTOCOPY OF THE STATEMENT DATED 01.03.2016 OF SMT.SULOCHANA,JOINT REGISTRAR/SECRETARY. EXHIBIT P7 TRUE PHOTOCOPY OF THE SHOW CAUSE NOTICE DATED 12.06.2017 ISSUED BY THE COMMISSIONER OF CENTRAL EXCISE,CUSTOMS AND SERVICE TAX,THIRUVANANTHAPURAM. EXHIBIT P8 TRUE PHOTOCOPY OF THE REPLY DATED 28.09.2017 SUBMITTED BY THE PETITIONER EXHIBIT P9 TRUE PHOTOCOPY OF THE ORDER-IN-ORIGINAL NO.TVM- EXCUS-000-COM-63-17-18 DATED 16.10.2017 ISSUED BY THE 2ND RESPONDENT EXHIBIT P10 TRUE PHOTOCOPY OF THE JUDGMENT DATED 30.01.2018 OF THE HON'BLE HIGH COURT OF KERALA IN W.P.(C)NO.18O9 OF 2018-A EXHIBIT P11 TRUE PHOTOCOPY OF THE WRITTEN SUBMISSIONS SUBMITTED BY THE PETITIONER EXHIBIT P12 TRUE PHOTOCOPY OF THE ORDER-IN-ORIGINAL NO.ORDER- ORIGINAL NO.TVM-EXCUS-000-COM-83-17/18 DATED 23.03.2018. EXHIBIT P13 TRUE PHOTOCOPY OF THE CESTAT APPEAL,DATED 10.07.2018 (WITHOUT ANNEXURES). EXHIBIT P14 TRUE PHOTOCOPY OF THE PRESENT STATUS OF THE PETITIONER REGARDING THE NUMBER OF PENDING FILES AND THE AMOUNT REQUIRED FOR CLEARANCE OF PENDING FILES ETC. DATED 20.09.2018
Reproduced from the public record of the Kerala High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.