Case Law Details
Whether the Tribunal has power in terms of Rule 24 of the Tribunal Rules to dismiss an appeal before it without considering the merits of the appeal and only on the ground for want of prosecution?
It is contended by the petitioner that the order passed on 6 December2007 on its appeal was an order passed in breach of Rule 24 of the Tribunal’s Rules. We find that when the appellant is not present before the Tribunal when the appeal is called out for hearing the Tribunal could either adjourn the hearing of the appeal in its inherent jurisdiction or in terms of Rule 24 of the Tribunal Rules dispose of the appeal on merits after hearing the respondent.
In this case the Tribunal has dismissed the petitioner’s appeal for non prosecution. The Tribunal has not considered the merits nor heard the respondents on merits before dismissing the appeal. Thus theTribunal has not exercised its inherent jurisdiction of adjourning the appeal or in terms of Rule 24 of the Tribunal Rules of deciding the appeal on merits after hearing the respondents. We find that in terms of Rule 24 of the Tribunal Rules the option of dismissing an appeal for default is not available to the Tribunal. In fact, Income Tax Appellate Tribunal Rules 1946 as amended in 1948 (Tribunal Rules 1946) provided for dismissal of appeal by the Tribunal for default on the part of the appellant before it. Rule 24 of the Tribunal Rules 1946 as amended in 1948 reads as under:
“24 Where on the day fixed for hearing or any other day to which the hearing may be adjourned, the appellant does not appear when the appeal is alled on for hearing, the Tribunal may, in its discretion either dismiss the appeal for default or may hear it exparte.”
The aforesaid Rule allowing the Tribunal to dismiss an appeal for non prosecution/default was a subject matter of challenge before the Supreme Court in CIT vs. S. Chenniappa Mudaliar (1969) 74 ITR Page 41 and the Apex Court held that such a provision in the rule was ultra vires the provisions of the parent Act viz. Section 33(4) of the Income Tax Act, 1922 which mandated the Tribunal to decide the appeal on merits. Therefore, we find that Rule 24 of the Tribunal Rules as applicable in this case advisedly does not provide for dismissal of appeal for default.
This Court in the matter of Chemipol vs. Union of India (244) E.L.T. 497 (Bom.) while dealing with the powers of Customs Excise and Service Tax Appellate Tribunal to dismiss an appeal for default has observed that though every Court or Tribunal has an inherent power to dismiss the proceeding for non prosecution yet this inherent power is lost where the statute requires the Court or the Tribunal to hear the appeal on merits. In this case Rule 24 of the Tribunal Rules mandates the Tribunal to decide the appeal on merits even in absence of the appellant after hearing the respondents. In view of the above, we hold that the Tribunal did commit an error in passing the order dated 6 December 2007 in dismissing the appeal on the ground of want of prosecution. Therefore, in such a case the appellant ( i.e. petitioner herein) is entitled to move the Tribunal to set right the breach of Rule 24 of the Tribunal Rules and have an order passed in breach thereof to be set aside.
