Yasir Ibnu Muhammed v. Commissioner of Customs, Willingdon Island, Cochin; Assistant Registrar, Customs, Excise & Service Tax Appellate Tribunal (CESTAT), South Zonal Bench, Bangalore

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR** **&** **THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.** **FRIDAY, THE 31[ST] DAY OF MAY 2024 / 10TH JYAISHTA, 1946 WA NO.578 OF 2024** **ARISING OUT OF THE JUDGMENT DATED 20.11.2023 IN WP(C) NO.37690 OF** **2023 OF HIGH COURT OF KERALA** ## **APPELLANT:** **YASIR IBNU MUHAMMED AGED 33 YEARS S/O.PALLIPAATTU ABDUL KHADER KUNJU MOHAMMED, R/O KARIKKINKUDIYIL, PUTHUPADY P.O, PERUMATTAM, MUVATTUPUZHA, ERNAKULAM, PIN - 686673** **BY ADV V.VIJITHA** ## **RESPONDENTS:** **1 THE COMMISSIONER OF CUSTOMS CUSTOMS HOUSE, WILLINGDON ISLAND, COCHIN, PIN - 682009 2 THE ASSISTANT REGISTRAR CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL (CESTAT), SOUTH ZONAL BENCH, 1ST FLOOR, WTC BUILDING, FKCCI COMPLEX, K.G ROAD, BANGALORE, PIN - 560009** **BY ADVS.** **SMT.PREETHA S.NAIR, SC, CENTRAL BOARD OF EXCISE AND CUSTOMS (SC-2094)** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 31.05.2024,** **THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WA NO.578/2024** **2** ## **JUDGMENT** _Dated this the 31[st] day of May, 2024_ ## **Syam Kumar V.M., J.** Appellant who was the petitioner in W.P (C) No. 37690 of 2023 has preferred this appeal challenging the judgment dated 20.11.2023 of the learned Single Judge. 2. Brief facts relevant for the disposal of this appeal are as follows : Appellant was imposed with a penalty of Rs.2 Crores under under Section 112(a) and (b) of the Customs Act, 1962 vide Ext.P1 Order dated 02.02.2017 issued by the 1[st] respondent. Though the Customs Act envisages an appeal against the said Order before the Customs Excise and Service Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal'), the appellant found the said route too onerous as it mandated a pre-deposit of around Rs.15 lakhs for filing the appeal. The appellant instead chose to file a Writ Petition (W.P.(C) No.12054 of 2017) before this Court challenging the Ext.P1 Order. Subsequently, upon realising that a Writ Petition would not be the proper remedy to challenge Ext.P1 Order, appellant decided to file an appeal before the competent Tribunal. He managed to arrange for and remit the pre-deposit of Rs.15 lakhs, albeit with delay and filed an appeal before the Tribunal at Bangalore. Appellant would contend that **WA NO.578/2024** **3** after thus filing the Writ Petition and the appeal, he was kept in oblivion regarding further developments in the said litigation. Later in the year 2021, he was visited with recovery proceedings initiated by the authorities to realise the penalty of Rs.2 Crores and upon frenetic inquiry, he was informed that both the appeal as well as the Writ Petition had been dismissed as early as in the year 2017. The appeal had been disposed of by the Tribunal vide Ext.P3 Order dated 03.10.2017 holding that as the appellant had already approached the High Court invoking Article 226 of the Constitution on the same subject, simultaneous remedies cannot be maintained before two forums. As regards the Writ Petition before this Court, the same had been disposed on 29.11.2017 vide Ext.P4 judgment inter alia holding that Ext.P1 Order which was impugned therein is appealable before the Tribunal. 3. Faced with such a predicament, appellant preferred an application before the Tribunal seeking to restore the appeal dismissed vide Ext.P3 Order. The said restoration application in turn was dismissed by the Tribunal vide Ext.P5 Order dated 05.06.2023 inter alia holding that the appellant ought to have approached the Tribunal immediately or within a reasonable period of the dismissal of the Writ Petition and that since more than four years have elapsed since the passing of Ext.P3 Order, there was no merit in the request for restoration of appeal preferred by the **WA NO.578/2024** **4** appellant. It was also reasoned by the Tribunal in the Order of dismissal that no plausible reason had been stated by the appellant justifying the cause of the delay and to substantiate the prayer for restoration. Thus, with recovery proceedings looming large, the appellant preferred W.P.(C) No.37690 of 2023 before this Court, the dismissal of which by the learned Single Judge is assailed before us in this appeal. 4. We have heard Smt.V.Vijitha, the learned counsel for the appellant and Smt.Preetha S.Nair, the learned Standing Counsel for the respondents. 5. The learned counsel for the appellant has taken us through the judgment of the learned Single Judge and had assailed it on multiple grounds. The Writ Petition was dismissed by the learned Single Judge noting that though Ext.P3 order dismissing the appeal was rendered as early as on 03.10.2017, the appellant had approached this Court more than six years from the date of the said Order. That the application for restoring the appeal was filed after five years from the date of dismissal of the appeal had also weighed with the learned Single Judge. Holding that the reasoning of the Tribunal for dismissing the restoration application was valid and justified, the learned Single Judge dismissed the Writ Petition. 6. The learned counsel for the appellant submits that the learned Single Judge erred in dismissing the Writ Petition. She **WA NO.578/2024** **5** would contend that valid and cogent reasons exist for the delay that had occasioned from the part of her client in preferring the restoration petition, all of which were overlooked by the learned Single Judge. She submits that the very fact that the mandatory pre-deposit of Rs.15 lakhs was remitted by the appellant as early as in 2017 itself would reveal the bonafides on the part of her client in pursuing the appeal. Rest of her contentions were more directed against Ext.P3 Order of the Tribunal which had dismissed the appeal reasoning that since the appellant had already moved the High Court on the same issue, the appeal is only to be dismissed in limine. She contended that the Tribunal ought not to have dismissed the appeal in limine and should have given a breathing time to the appellant to enable the appellant to get the pending Writ Petition disposed. As for Ext.P5 Order, which later dismissed the appellant's restoration petition, she assails it too on the ground that it does not reflect any application of mind by the Tribunal to the reasons elaborated therein for the delay, which according to her, had explained the true, correct and cogent reasons for condoning the delay and restoring the appeal. The learned counsel for the appellant would summarize that upon a cumulative appreciation of the fact that the appellant had remitted the mandatory pre-deposit and the steps taken by him upon being informed of the dismissal of the appeal by the Tribunal, buttresses **WA NO.578/2024** **6** her prayer in the Writ Petition for a direction to restore the appeal before the Tribunal and for its consideration on merits. This according to her, was lost sight of by the learned Single Judge. 7. Per contra, the learned Standing Counsel for the respondents vehemently opposes the submissions made on behalf of the appellant. The learned Standing Counsel submits that the facts and circumstances as revealed by the records produced by the appellant himself would reveal serious laches and negligence from his part in pursuing the appeal before the Tribunal as also in contesting the Writ Petition filed at the first instance before this Court. The learned Standing Counsel also submits that the Writ Petition, the judgment in which the appellant is presently assailing in this appeal, was filed only on 10.11.2023 that is after nearly five months of the dismissal of the restoration application by the Tribunal on 05.06.2023. The learned Standing Counsel thus contends that the appellant does not deserve any indulgence in the matter and the Writ Appeal is only to be dismissed. 8. After hearing both sides in detail, we find force in the contention of the counsel for the appellant that the Tribunal ought not to have dismissed the appeal of the appellant in limine vide Ext.P3 Order especially since the appellant had reasonably exhibited his bonafides by complying with the mandatory predeposit of Rs.15 lakhs as early as in 2017 itself. We note that vide **WA NO.578/2024** **7** Ext.P3 Order the Tribunal had dismissed the appeal in limine even after noting that the Writ Petition filed regarding the same subject matter is pending before the High Court. Taking note of the fact that the appellant had preferred the appeal as envisaged in Sec.129 A (1) of the Act and had already remitted the mandatory pre-deposit, the Tribunal ought to have granted the appellant a reasonable opportunity to take appropriate steps for getting the Writ Petition, which was then pending before this Court, disposed of and then to permit him to pursue his remedy in the pending appeal before the Tribunal. Non suiting him in limine does not appear to be reasonable, especially in the facts and circumstances of the case. 9. Further, we note that the Tribunal while dismissing the appeal in limine, overlooked the trite principle that Courts and Tribunals should endeavour to decide a litigation on merits rather than on default. The Hon'ble Supreme Court in **Sheo Raj Singh & ors. v. Union of India & Anr.** (2023 SCC Online SC 1278) has affirming this preposition and following its earlier dictum in **State of Nagaland v. Lipok Ao & ors.** [(2005) 3 SCC 752] held that courts should attempt to decide a case on its merits, unless the same is hopelessly without merit. In **Robin Thapa v. Rohit Dora** (2019 SCC online SC 836), it has been held by the Hon'ble Supreme Court that “litigation is based on adjudication on the **WA NO.578/2024** **8** merits of the contentions of the parties. Litigation should not be terminated by default, either of the plaintiff or the defendant. The cause of justice does require that as far as possible, adjudication be done on merits”. Following the above dictum, which has been reiterated by the Hon'ble Supreme Court in a catena of cases, the Tribunal in the facts and circumstances of the matter ought to have afforded the appellant an opportunity to challenge the penalty of Rs.2 crores imposed upon him vide Ext.P1 Order on merits rather than dismissing his appeal in limine on the ground that a Writ Petition on the same subject matter was pending before the High Court. Accordingly, we set aside Exts.P3 and P5 Orders of the Tribunal and the Customs, Excise and Service Tax Appellate Tribunal, Bangalore, represented by the 2[nd] respondent is hereby directed to restore appeal No.C/21130/2017-DB back to file and dispose the same on merits within an outer time limit of six months from today. The Writ Appeal is thus allowed setting aside the judgment of the learned Single Judge. ## **Sd/-** ## **DR. A.K.JAYASANKARAN NAMBIAR JUDGE** Sd/- ## **SYAM KUMAR V.M. JUDGE** csl **WA NO.578/2024** **9** ## **APPENDIX OF WA 578/2024** ## **PETITIONER ANNEXURES** **Annexure A A TRUE COPY OF THE RESTORATION PETITION DATED 15.01.2022 FILED BEFORE THE HON'BLE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL (CESTAT), BANGALORE**