M/S Lakhani And Desai Developers vs. Union Of INDIA

Held

The Court held that the respondent's stand of keeping the petitioner's appeal in the 'Call Book' pending a decision by the Apex Court was without basis. The Court reiterated its previous decisions, including "Siddhi Vinayak Syntex Pvt. Ltd. vs. Union of India" and "Parimal Textiles vs. Union of India", emphasizing that the pendency of an SLP without a stay does not absolve litigants from abiding by the High Court's ratio. The Court noted that in two prior matters, the Apex Court had dismissed the SLPs. Therefore, the appellate forum was directed to decide the petitioner's appeal within ten weeks from the date of the order, without fail. The Court found no justification for the respondent to rely on a pending SLP when the High Court's ratio had not been stayed and had been upheld by the dismissal of earlier SLPs.

Facts

The petitioner, M/s Lakhani and Desai Developers, engaged in construction services, challenged a demand for CENVAT credit amounting to Rs. 59,95,477/-. A show cause notice was issued on 11.09.2017 by the Additional Commissioner, Central GST and Excise Commissionerate, Surat. The petitioner replied, but the Additional Commissioner confirmed the demand and disallowed the credit on 29.12.2017. An appeal to the Commissioner (Appeals) was rejected. The matter was remanded by the CESTAT to the adjudicating authority, who again rejected the request and confirmed the demand, interest, and imposed a penalty on 30.12.2020. The petitioner's subsequent appeal to the Commissioner (Appeals) on 25.02.2021 was pending, with the grievance that the authority was awaiting a decision from the Apex Court, citing the 'Call Book' concept. The petitioner argued this concept was impermissible.

Key Issues

1. Whether the respondent appellate authority can hold the petitioner's appeal in abeyance by transferring it to the 'Call Book' pending a decision by the Apex Court, particularly when this Court's prior judgments on the issue have not been stayed by the Apex Court? Petitioner's arguments: The petitioner contended that the 'Call Book' concept is not permissible at the appellate level and that Circular No. 1053/02/2017-CX is unsustainable. They argued that the pendency of a Special Leave Petition (SLP) before the Apex Court, without a stay, does not permit the respondent to disregard the ratio laid down by this Court. They relied on this Court's decisions in "Principal Commissioner vs. Alembic Ltd.", "Siddhi Vinayak Syntex Pvt. Ltd. vs. Union of India", and "Parimal Textiles vs. Union of India", noting that the SLP in "Parimal Textiles" was dismissed. Revenue's arguments: The respondent argued that the petitioner's case falls under clause (i) of para 9.3 of Board Circular No. 1053/02/2017-CX. They stated that an appeal had been filed before the Apex Court against this Court's decision in "Siddhi Vinayak", and as this appeal is pending, the matter was transferred to the 'Call Book' in accordance with the Board's Circular and correct categorization.