Facts of the Case

  • The Appellant, the Commissioner of Central Excise, Customs & Service Tax, Rourkela Commissionerate, preferred an appeal (OTAPL No. 1 of 2015) before the Hon'ble High Court of Orissa at Cuttack.
  • The appeal was filed to challenge an interlocutory interim stay order passed by the Customs, Excise and Service Tax Appellate Tribunal, Eastern Regional Bench, Kolkata (CESTAT).
  • The interlocutory stay order granted by the CESTAT had been continuously operating and in effect for a prolonged duration of more than seven years prior to being heard by the High Court.
  • The underlying dispute is rooted in the main appeal pending before the tribunal, identified as Excise Appeal No. 71439 of 2013.

Issues Involved

  • Whether the High Court, under its appellate jurisdiction, should interfere with a long-standing interlocutory stay order passed by the CESTAT that has already been operational for over seven years.
  • Whether it is judicially prudent to disturb interim arrangements of such long duration or if the interest of justice is better served by expediting the final disposal of the main tax appeal pending before the tribunal.

Petitioner’s (Appellant’s) Arguments

  • The Appellant was represented by Mr. R.S. Chimanka, Senior Standing Counsel (GST & CX).
  • The Revenue contended that the interlocutory stay order granted by the CESTAT, Kolkata, was improper and required judicial intervention or modification by the High Court.
  • It was implicitly argued that the long delay in resolving the interim status was impacting revenue interests, thereby necessitating the regular adjudication of the appeal on its merits rather than allowing an interlocutory stay to persist indefinitely.

Respondent’s Arguments

  • No one appeared on behalf of the Respondent, M/s. Hindalco Industries Ltd., at the time the order was passed.
  • Consequently, no formal defense or counter-arguments were actively presented before the bench during this specific listing.

Court Order / Findings

  • Bench Composition: The matter was heard by a division bench comprising the Hon'ble Chief Justice Dr. S. Muralidhar and Hon'ble Justice M. S. Raman.
  • Non-Interference with Interim Order: The High Court observed that the appeal was directed against an interlocutory order of the CESTAT, Kolkata, which had granted a stay more than seven years ago. Given the extensive passage of time, the Court explicitly stated it was "not inclined to interfere at this stage."
  • Expedited Timeline for Main Appeal: To balance the equities, the High Court requested the CESTAT, Eastern Regional Bench, Kolkata, to dispose of the main appeal, i.e., Excise Appeal No. 71439 of 2013, within a strict period of six months from the date of production of the certified copy of the Court's order.
  • Disposal of OTAPL: The Orissa Tax Appeal (OTAPL No. 1 of 2015) was formally disposed of in terms of the aforementioned directions.
  • Registry Directions: The Court directed its Registry to send a certified copy of the order to the CESTAT, Kolkata Bench, immediately for necessary compliance.

Important Clarification

  • This judgment underscores an essential principle of judicial restraint: High Courts will generally resist overturning or interfering with interlocutory/interim stay orders passed by sub-ordinate tribunals if such orders have remained unchallenged or operational for an extended period (seven years in this case).
  • Instead of altering the interim setup, the appropriate remedy is to seek a time-bound direction for the final disposal of the substantive main appeal.

Section Involved

  • Section 35G of the Central Excise Act, 1944 (Appeals to High Court) / Relevant provisions governing statutory tax appeals and High Court jurisdiction over interlocutory orders passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

Link to download the order - https://mytaxexpert.co.in/uploads/1783143531_495compressed.pdf

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