C/SCA/14552/2021 ORDER DATED: 23/02/2023

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

R/SPECIAL CIVIL APPLICATION NO. 14552 of 2021

==========================================================
M/S SUPREME TREVES PVT. LTD.
Versus
UNION OF INDIA
==========================================================
Appearance:
AMAL PARESH DAVE(8961) for the Petitioner(s) No. 1,2,3
MR PARESH M DAVE(260) for the Petitioner(s) No. 1,2,3
MR NIKUNT K RAVAL(5558) for the Respondent(s) No. 1,2
==========================================================

CORAM:HONOURABLE MR. JUSTICE A.J.DESAI

and
HONOURABLE MS. JUSTICE NISHA M. THAKORE

Date : 23/02/2023

ORAL ORDER

(PER : HONOURABLE MR. JUSTICE A.J.DESAI)

1. Rule returnable forthwith. Learned Central Government

Standing Counsel Mr. Nikunt K. Raval waives service of notice of rule

for and on behalf of respondents.

2. With consent of learned advocates appearing for the respective

parties, this matter is taken up for final hearing in view of the several

orders passed by this Court deciding similar issue involved in the

present present petition.

3. By way of present petition under Articles 14, 19(1)(g), 265 and

300(A) of the Constitution of India, petitioners have prayed for

Page 1 of 11

Downloaded on : Fri Mar 10 16:54:12 IST 2023

 C/SCA/14552/2021 ORDER DATED: 23/02/2023

following reliefs:

“(A) That Your Lordships may be pleased to issue a

Writ of Certiorari or a Writ in the nature of Certiorari or
any other appropriate writ, direction or order, quashing
and setting aside Order No.A/11891-11892/2021 dated
24.5.2021 (Annexure- “M” hereto) made by the
Appellate Tribunal, Ahmedabad, with all consequential
reliefs and benefits:

(B) That Your Lordships may be pleased to issue a

Writ of Prohibition or any other appropriate writ, order
or direction, fully and permanently prohibiting the
Respondents herein from taking any action against the
Petitioner Company pursuant to order No.A/11891-
11892/2021 dated 24.5.2021 (Annexure- “M” hereto)
thereby ordering conclusion of the case made out by the
Revenue against the Petitioner Company;

(C) Pending hearing and final disposal of the present

petition, Your Lordships may be pleased to stay
operation, implementation and execution of Order No.A/
11891-11892/2021 dated 24.5.2021 (Annexure- “M”
hereto) passed by the Appellate Tribunal, Ahmedabad
on terms and conditions that may be deemed fit by this
Hon’ble Court;

(D) An ex-parte ad-interim relief in terms of para 23

(C) above may kindly be granted.

(E) xxx”

4. In response to the notice issued by this Court vide order dated

Page 2 of 11

Downloaded on : Fri Mar 10 16:54:12 IST 2023

 C/SCA/14552/2021 ORDER DATED: 23/02/2023

30.09.2021, respondents have appeared through their learned counsel

and affidavit-in-reply has been filed.

5. It is the grievance of the petitioners that the Tribunal instead of

deciding the matter has remanded it to the Assessing Officer in view

of the fact that the matter being a case of M/s. PCM Cement Concrete

Private Limited vs. Commissioner of Central Excise Customs and

Service Tax (Civil Appeal Nos.005702-005703/2018) is pending

before the Hon’ble Supreme Court.

6. Learned advocate Mr. Paresh Dave appearing for the petitioners

has raised specific grievance that the issue involved in the case of M/s.

PCM Cement Concrete Private Limited (supra) is not applicable, and

therefore, the Tribunal ought to have decided the matter.

6.1 Learned advocate Mr. Paresh Dave appearing for the petitioners

has relied upon the oral order dated 07.01.2023 passed by this Court

in Special Civil Application No.586 of 2021. Learned advocate Mr.

Paresh Dave by taking us through the aforesaid order, more

particularly, Paragraph Nos.6 and 7 and direction issued in Paragraph

No.8 of the said order, would submit that present petition requires

consideration.

7. On the other hand, learned Central Government Standing

Page 3 of 11

Downloaded on : Fri Mar 10 16:54:12 IST 2023

 C/SCA/14552/2021 ORDER DATED: 23/02/2023

Counsel Mr. Nikunt Raval has opposed this petition. He has invited our

attention to the affidavit-in-reply filed by Commissioner of CGST and

Central Excise. He has also placed on record the status of Civil Appeal.

8. We have heard learned advocates appearing for the respective

parties. It is true that Civil Appeal Nos.005702-005703/2018 is pending

before the Hon’ble Apex Court. We notice that entire basis of remand

ordered by the Appellate Tribunal in the present case is on the ground

of pending aforesaid Civil Appeal. Secondly, the Tribunal has noted

that to adjudicate the issue involved the matter needs to be

reconsidered taking into account not only position of income tax but

also on basis of terms and conditions of the employment of Directors.

The aforesaid aspect as submitted by Mr. Paresh Dave, learned

advocate for petitioner is settled by various decisions holding that

Directors of a company were employees, and remuneration paid to

Directors was not chargeable to service tax. In such circumstances, we

find that approach of Tribunal for remand was not proper.

9. At this stage, apt would be to consider the observations made

by the Co-ordinate Bench of this Court in Special Civil Application

No.586 of 2021 on 07.01.2023. Relevant observations made in

Paragraph No.6 and 7 of the said order read as under:

6. We notice that the chief reason for remanding the

Page 4 of 11

Downloaded on : Fri Mar 10 16:54:12 IST 2023

C/SCA/14552/2021 ORDER DATED: 23/02/2023

matter for adjudicating it de novo by the adjudicating authority

is the pendency of the matter in case of M/s. M/s.Bombay Dyeing
and Manufacturing Company Limited (supra) before the Apex
Court. It is a Larger Bench’s judgment of the Bombay High Court
challenged before the Apex Court in Special Leave Petition
No.007390 of 2020 on 09.06.2020. We are given to understand
that the same is still pending before the Apex Court and has not
been finally decided. If the matter is still pending before the
Apex Court, nobody can make a guess as to in what way it is
going to result. The least the Tribunal could have done was of
deciding the matter on merit as per the prevalent law or to keep
the matter back. However, it has chosen to remand the matter
to the adjudicating authority which is impermissible.

7. This Court in case of Commissioner of Central GST vs. Jay

Chemical Industries Ltd., reported in 2018 (19) GSTL
459(Guj.) the question which was pending before the Tribunal
was at large before the High Court. The Court held that in such
a situation, the appeal ought to have been kept pending till the
decision of the High Court with a liberty to both the sides to
approach the Tribunal after the decision of the High Court. The
approach of the Tribunal is held to have harassed both the
Assessee and the Department, the matter was remanded with a
direction to keep it pending and decide after the decision of the
High Court in Tax Appeal pending before it on the same issue.

7.1 Relevant findings and observations of the Court are as follow:

“6.Having heard learned Advocates appearing on behalf
of the respective parties and considering the impugned
common order passed by the learned Tribunal, we, as
such disapprove the manner in which the learned
Tribunal has disposed of the appeals. As such, the

Page 5 of 11

Downloaded on : Fri Mar 10 16:54:12 IST 2023

C/SCA/14552/2021 ORDER DATED: 23/02/2023

learned Tribunal ought to have decided the appeals on

merits in view of the binding decisions of this Court in
the case of Cadila Healthcare Ltd. (supra) and Astik
Dyestuff Pvt. Ltd. (supra). However, if the learned
Tribunal was of the opinion that in view of subsequent
notification No.2/16 dated 03.02.2016, by which
explanation has been inserted to the definition of ‘input
service’ and the question whether such notification shall
be applicable retrospectively or not is at large before
this Court in the case of Essar Steel India Ltd., being Tax
Appeal No.444 of 2016 and it is not appropriate to
decide the appeals on merits, in that case, the learned
Tribunal ought to have kept the appeals pending till
decision of this Court in the case of Essar Steel India
Ltd., being Tax Appeal No.444 of 2016. Instead, the
learned Tribunal has disposed of the appeals even
without deciding the appeals on merits with liberty to
both sides to approach the Tribunal after decision of
this Court in the pending appeal in the case of Essar
Steel India Ltd., being Tax Appeal No.444 of 2016. Such
an order would not help either the Revenue
/Department and even the assessee. Such a procedure
adopted by the learned Tribunal would cause
harassment to the assessee as well as inconvenience to
the Department. Therefore, we are of the opinion that
the procedure adopted by the learned Tribunal
disposing of the appeals without deciding the same on
merits with liberty approach the Tribunal after decision
of this Court in the pending appeal is neither correct not
proper and the same deserves to be quashed and set
aside.

Page 6 of 11

Downloaded on : Fri Mar 10 16:54:12 IST 2023

C/SCA/14552/2021 ORDER DATED: 23/02/2023

7. As recorded hereinabove, even learned Advocate

appearing on behalf of the assessee in Tax Appeal
Nos.814 and 815 of 2018 has also stated and submitted
that the learned Tribunal ought to have kept appeals
pending rather than disposing the appeals with above
liberty.

8. In view of the above and for the reasons stated

hereinabove, all these appeals succeed. The impugned
common order passed by the learned Tribunal is hereby
quashed and set aside and the appeals are restored to
the file of the learned Tribunal and to avoid any further
multiplicity of proceedings /appeals before this Court, it
is directed that the appeals on remand be kept pending
till the decision of this Court in the case of Essar Steel
India Ltd., being Tax Appeal No.444 of 2016.

9. The appeals are partly allowed to the aforesaid

extent.”

7. In Tax Appeal No.1043 of 2018 decided in case of

Commissioner, Central GST and Central Excise
Vadodara-II vs. M/s.Meghmani Finchem Ltd., this
very issue was decided by this Court by strongly
disapproving this approach on the part of the Tribunal.
One particular appeal was pending before this Court
and the large number of appeals came up for
consideration before the Tribunal on the very issue,
the Department had placed heavy reliance on the
judgment of the High Court and the Assessee relied on
the amendment to the definition of the “input credit
service” and argued that in all pending cases
irrespective of the date of amendment, the same would

Page 7 of 11

Downloaded on : Fri Mar 10 16:54:12 IST 2023

C/SCA/14552/2021 ORDER DATED: 23/02/2023

apply. The Tribunal had option to wait for the outcome

of Department’s appeal in case of the pending appeal
of the Essar Steel if, the decision in such appeal was
likely to be rendered in a foreseeable future. However,
if it was of the opinion that the judgment would not be
available in the near future, it could have awaited till
the outcome. The approach of the Tribunal was not at
all approved by the Court in the following words:
“4. In view of such facts, the options before
the Tribunal were either to await the outcome
of the department's appeal in case of Essar
Steel India Ltd (supra) if the decision in such
appeal was likely to be rendered in near
foreseeable future which would in addition to
reducing the effort of both sides would also in
many cases eliminate one stage of litigation.
However, if the Tribunal was of the opinion
that the judgement of the High Court may not
be available in near future or for any such
other good reason, it would not possible or
advisable to await the outcome, the option
with the Tribunal was to decide the appeals on
merits after hearing both sides and as may be
advised. Strangely, the Tribunal adopted the
third mode. The Tribunal disposed of all
appeals “with liberty to both sides to approach
the Tribunal soon after the verdict of the
Hon'ble High Court in the pending appeal
against the Division Bench judgement of this
Tribunal in case of Essar Steel India Limited
(supra) filed by the Revenue”. While doing so,
the Tribunal also added “needless to mention

Page 8 of 11

Downloaded on : Fri Mar 10 16:54:12 IST 2023

C/SCA/14552/2021 ORDER DATED: 23/02/2023

no recovery nor refund would be processed

during the period”.

5. For multiple reasons, we do not

approve the approach adopted by the Tribunal.
Dispensation of justice is not number games
and should not be brought down to mere
statistics. Through the mode adopted by the
Tribunal all that has been achieved is to show
disposal of large number of appeals and
crossobjections without resolution of the
disputes between the parties. This disposal is
also not final and is open to reopening of all
the issues. This would lead to multiplicity of
proceedings. The parties, i.e. the department
or the assessee, as the case may be, would
have to file fresh proceedings once the High
Court disposes of the appeal in case of Essar
Steel India Ltd. In the mechanism provided, the
Tribunal has also left many gaps. For example,
there is no clarity as to what time limit within
which the parties would have to file fresh
proceedings. The Tribunal merely stated that
soon after the verdict either side can approach.
This term “soon after the verdict” is not
possible of any clear application. Further, we
wonder what would happen if no appeal is
filed as per the liberty granted by the Tribunal.
Whether the decision against the losing party
would achieve finality; in which case what
would happen to the tax or the refund is not
clear. At which point of time such finality

Page 9 of 11

Downloaded on : Fri Mar 10 16:54:12 IST 2023

 C/SCA/14552/2021 ORDER DATED: 23/02/2023

would be presumed is not specified. All in all,

this is the most unsatisfactory manner in
which, such large number of proceedings
should have been eliminated from the record
of the Tribunal which can achieve only
statistical purpose. The order passed by the
Tribunal serves no other purpose.

6. The Tribunal is a creation of statute.

Section 35C(1) of the the Central Excise Act,
mandates the Tribunal to dispose of the
appeals on merits. It was simply not open for
the Tribunal to jettison the litigation in this
manner.”

10. In view of the above facts, we are of the opinion that petition

requires consideration. Present petition stands disposed of with

following direction:

“In the instant case also, we notice that the approach of

the Tribunal is to abdicate its duty of deciding the

matter on the merits or to retain the matter till the

outcome of the pending matter before the Apex Court.

This approach of Tribunal is not proper. We deem it

appropriate to direct the Tribunal to decide the matter

on merits. We further reserve liberty to the parties to

raise all contentions as raised by both the sides before

Page 10 of 11

Downloaded on : Fri Mar 10 16:54:12 IST 2023

 C/SCA/14552/2021 ORDER DATED: 23/02/2023

this Court. Let the same be decided without further loss

of time.”

11. With the above observation and direction, present petition

stands disposed of, accordingly. Rule is made absolute to the

aforesaid extent.

12. It is hereby made clear that this Court has not examined the

merits of the case.

(A.J.DESAI, J)

(NISHA M. THAKORE,J)
SUYASH SRIVASTAVA

Page 11 of 11

Downloaded on : Fri Mar 10 16:54:12 IST 2023