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TAXAP/1946/2008 8/ 8 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 1946 of 2008
For
Approval and Signature:
HONOURABLE
MR. JUSTICE D.A.MEHTA
HONOURABLE
MS. JUSTICE H.N.DEVANI
=========================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To
be referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================
JAYESH
NATWARLAL SHAH - Appellant(s)
Versus
THE
DEPUTY DIRECTOR, ENFORCEMENT DIRECTORATE (FEMA) & 1 - Opponent(s)
=========================================
Appearance
:
MR NM
KAPADIA for
Appellant(s) : 1,
RULE SERVED BY DS for Opponent(s) : 1,
MR PS
CHAMPANERI, ASSTT. SOLICITOR GENERAL OF INDIA for Opponent(s) :
1,
RULE NOT RECD BACK for Opponent(s) :
2,
=========================================
CORAM
:
HONOURABLE
MR. JUSTICE D.A.MEHTA
and
HONOURABLE
MS. JUSTICE H.N.DEVANI
Date
: 25/03/2010
ORAL
JUDGMENT
(Per :
HONOURABLE MS.JUSTICE H.N.DEVANI)
1. In
this appeal under section 35 of the Foreign Exchange Management Act,
1999, (the Act) the appellant has challenged the order dated 26th
July, 2007 made by the Appellate Tribunal for Foreign Exchange (the
Tribunal) whereby the appeal has been dismissed.
2. The
facts stated briefly are that by an order dated 26.10.1998 made by
the Special Director, Enforcement Directorate, Mumbai, the appellant
was found guilty of the contravention of the provisions of the
Foreign Exchange Regulation Act (FERA) and penalty of Rs.7,50,0000/-
was imposed on him and Indian currency of Rs.7,35,0000/- came to be
confiscated. Being aggrieved the appellant had preferred an appeal
before the Tribunal being Appeal No.98 of 1999. Vide order dated 06th
January, 2006, the Tribunal after hearing the learned advocate for
the appellant and after considering the facts and evidence and
circumstances of the case found that there was no justification for
waiver of pre-deposit of penalty and accordingly directed the
appellant to pre-deposit the full amount of penalty within 30 days
from the date of the said order failing which the appeal would be
dismissed on the said ground alone. The appeals were fixed for
hearing on 17th February, 2006.
3. Against
the said order of the Tribunal, the appellant preferred a writ
petition before this Court being Special Civil Application No.13762
of 2006. Vide order dated 13th March, 2007, the appellant
was permitted to withdraw the petition with liberty to file a review
application before the Tribunal to reconsider the aspect of hardship
and to recall and review the order directing pre-deposit for hearing
of the appeal. The appeal was thereafter taken up for hearing on 26th
July, 2007. On that date, the learned advocate for the appellant
prayed for time to enable him to file an application for review in
terms of the order dated 13th March, 2007 passed by this
Court. The Tribunal vide the impugned order turned down the request
for adjournment and dismissed the appeal as the appellant had failed
to make pre-deposit of penalty in compliance with the order dated
06th January, 2006 passed by the Tribunal.
4. Mr.
N. M. Kapadia, learned advocate for the appellant has invited the
attention of the Court to the averments made in the memo of appeal to
submit that the appellant’s advocate Shri Madhubhai Patel was aged
about 78 years and had not been keeping good health for the last 2-3
years and that when the matter was fixed for hearing on 06th
January, 2006, the learned advocate was not in a position to attend
hearing and had deputed another advocate to argue the matter. It is
submitted that the appellant had entrusted the filing of review
application to the said advocate and that on 26th July,
2007, Mr. M. Venkataraman had appeared on behalf of Mr. Madhubhai
Patel and prayed for a short time for filing an application for
recall. It is submitted that even in the absence of any application
for recall, in view of the order passed by this Court, it was
incumbent upon the Tribunal to call upon the advocate to argue the
matter for recall of the order. It is submitted that on account of
default on the part of the learned advocate for the appellant, the
appellant should not be penalised and as such, the impugned order
passed by the Tribunal be set aside and the appellant be permitted to
file a review application before the Tribunal.
5. On
the other hand Mr. P. S. Champaneri, learned Assistant Solicitor
General, has invited the attention of the Court to the averments made
in the memo of appeal as well as to the impugned order of the
Tribunal. It is submitted that no explanation is coming forth for not
filing the review application within a reasonable period after the
order dated 13th March, 2007 made by this Court. It is
submitted that the appellant having failed to make pre-deposit in
compliance with the order made by the Tribunal, the Tribunal was
fully justified in dismissing the appeal.
6. As
can be seen from the impugned order of the Tribunal, the Tribunal had
found it difficult to agree with the request for adjournment made by
the learned advocate for the appellant in view of the fact that more
than three months had already passed since the date of the order
passed by this Court permitting the appellant to withdraw the
petition challenging the order of pre-deposit to enable the appellant
to file application for review/recall of the said order. It is in
these circumstances, that the Tribunal had rejected the request for
adjournment to enable the learned advocate for the appellant to file
a review application. The Tribunal has observed that section 52(2)
of the Act creates an obligation on the appellant to make pre-deposit
of penalty unless the Tribunal permits dispensation with any
conditions deemed fit on the grounds of undue hardship. That though
there was no stay against the order directing pre-deposit the
appellant had failed to make pre-deposit in compliance with the order
dated 06th January, 2006 made by the Tribunal. The
Tribunal was of the view that the appellant was aware that as a
consequence of non-deposit of the penalty his appeal would be
dismissed on that ground alone, and accordingly, dismissed the appeal
as the appellant had failed to make pre-deposit of the penalty in
compliance with the order dated 06th January, 2006.
7. Section
52 of the FERA provides for appeal to the Appellate Board.
Sub-section (2) thereof lays down that any person aggrieved by an
order of the adjudicating officer made under section 51 may, on
payment of such fee as may be prescribed and after depositing the sum
imposed by way of penalty under section 50 and within forty-five days
from such date on which the order is served on the person committing
the contravention, prefer an appeal to the Appellate Board. The
second proviso to sub-section (2) provides that where the Appellate
Board is of the opinion that the deposit to be made will cause undue
hardship to the appellant, it may, in its own discretion, dispense
with such a deposit either unconditionally or subject to such
conditions as it may deem fit. Thus depositing the sum imposed by way
of penalty under section 50 is a condition precedent for preferring
an appeal. However, it is permissible for the Appellate Board to
dispense with such a deposit if it is of the opinion that the deposit
to be made will cause undue hardship to the appellant. In the facts
of the present case, the Tribunal vide order dated 6th
January, 2006 had found that there was no justification for waiver of
pre-deposit. The appellant had withdrawn the petition filed by him
challenging the said order with a view to file application for
review/recall of the earlier order. Despite considerable time having
elapsed since the date of the passing of the order of this Court, no
application for review/recall was made by the appellant. In the
circumstances, if the appellant was desirous of pursuing the appeal,
it was incumbent upon him to deposit the penalty amount. However, the
appellant had failed to do so resulting in the Tribunal dismissing
his appeal for failure to deposit the amount of penalty. The sole
ground pleaded before this Court is that the review application was
not filed in time on account of default on the part of the learned
advocate of the appellant and as such the appellant should not be
penalized. In this regard it may be pertinent to note that from the
averments made in the memo of appeal, no explanation worth the name
is coming forth as to why no application for review was made since
the order dated 13.03.2007 made by this Court permitting the
applicant to withdraw the petition with a view to file application
for review/recall. The only reference made in the appeal memo is in
relation to the absence of the learned advocate on 06.01.2006 when
the learned advocate could not remain present and had deputed some
other advocate on his behalf. The appeal memo is absolutely silent as
regards the application for review being entrusted to the said
learned advocate and as to when it was so entrusted. The only
averment made is that since the learned advocate had to prepare and
file an application for recall of the order, Mr. Venkatraman on
behalf of Mr. Madhubhai Patel had appeared before the Tribunal on
26.07.2007 and sought for a short adjournment for filing an
application for recall. Thus, till as late as on 26th
July, 2007 when the appeal was taken up for hearing, the appellant
had still not moved any such application. No sufficient cause has
been indicated in the memo of appeal as to why no such application
could be filed within a reasonable period. A perusal of the order of
the Tribunal indicates that it was not even the case of the appellant
before the Tribunal that the application for review or recall could
not be filed on account of default on the part of the learned
advocate for the appellant. In the circumstances, in absence of
basic facts being brought before the Tribunal to indicate that it was
actually on account of default on the part of the learned advocate
for the appellant that the review application could not be filed, no
infirmity can be found in the impugned order of the Tribunal in
dismissing the appeal on the ground that the appellant had failed to
make pre-deposit in compliance with the order dated 06th
January, 2006.
8. Another
aspect which is required to be considered is that this is an appeal
under section 35 of the Foreign Exchange Management Act, 1999.
Section 35 of the Act which provides for appeal to the High Court
lays down that any person aggrieved by any decision or order of the
Appellate Tribunal may file an appeal to the High Court within 60
days from the date of communication of the decision or order of the
Appellate Tribunal to him on any question of law arising out of such
order. A perusal of the memo of appeal indicates that no question of
law has been proposed. In the circumstances, in absence of any
question of law being proposed, the appeal is required to be
dismissed on this ground alone.
9. For
the foregoing reasons, no infirmity can be found in the impugned
order of the Tribunal so as to warrant interference. No question of
law has been proposed, neither does any question of law arise out of
the impugned order of the Tribunal. The appeal is accordingly
dismissed with no order as to costs.
(
D.A. Mehta, J. )
(
Harsha Devani, J. )
hki
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