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Judgment
Ramesh Ranganathan, CJ
Heard Mr. P.R. Mullick, learned counsel for the appellants, Mrs. Pushpa Bhatt, learned Senior Standing Counsel for the Union of India and Mr. H.M. Bhatia, learned Standing Counsel for respondents 3 and 4 and, with their consent, the Special Appeal is disposed of at the stage of admission. This Special Appeal is preferred by the petitioners in Writ Petition (M/S) No. 2758 of 2019 aggrieved by the order passed by the learned Single Judge dated 13.09.2019 dismissing the Writ Petition.
The appellants-writ petitioners had invoked the jurisdiction of this Court seeking a writ of certiorari to quash the adjudication order passed by the Commissioner, CGST, Dehradun dated 30.04.2019; a writ of mandamus directing that the matter be remanded to the Commissioner, CGST for de-novo adjudication; a writ of mandamus directing the CESTAT, New Delhi not to proceed further with the hearing of the matter till the finality of the present Writ Petition; and a writ of mandamus prohibiting the respondents from taking any coercive steps in furtherance of the adjudication order dated 30.04.2019.
The appellants-writ petitioners had filed the Writ Petition questioning the validity of the adjudication order passed by the Commissioner, CGST, Dehradun. Even before invoking the jurisdiction of this Court, the appellants-writ petitioners had availed their appellate remedy under Section 35B of the Central Excise Act. They sought exemption from depositing 7 ½ percent of the disputed duty, as required in terms of Section 35F of the Central Excise Act. Section 35F(ii) of the Central Excise Act prohibits the Tribunal from entertaining an appeal unless the appellant has deposited 7 ½ percent of the disputed duty. On the ground that they were unable to deposit 7 ½ percent of the disputed duty, the appellants-writ petitioners invoked the jurisdiction of this Court.
In the order under appeal, the learned Single Judge observed that the appellants-writ petitioners were obligated to deposit the statutory demand of 7 ½ percent, before the appellate authority, before the matter could be heard; and in order to escape from this statutory liability, of deposit of 7 ½ percent of the demanded amount, they had filed the Writ Petition which was impermissible. Finding the Writ Petition totally misconceived, the learned Single Judge dismissed the same. Aggrieved thereby, the present Special Appeal.
Section 35F, before its substitution, required a person, desirous of appealing against the decision of the adjudicating authority, to deposit, with the adjudicating authority, the duty charged or the penalty levied. The first proviso thereto enabled the Commissioner (Appeals), or the Appellate Tribunal, if it was of the opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, to dispense with such deposit subject to such conditions as it may deem fit to impose so as to safeguard the interests of revenue. The second proviso to Section 35F obligated such an application to be decided within thirty days from its filing.
The pre-amended Section 35F required the entire duty demanded by the adjudicating authority to be deposited, and conferred powers on the Commissioner (Appeals) or the Tribunal, in terms of the first proviso, to dispense with such deposit, subject to such conditions as it deemed fit to impose to safeguard the interests of Revenue. Instead of requiring the appellant to deposit the entire duty as demanded in the adjudication order and in conferring discretion on the Tribunal, subject to such conditions as it may deem fit to impose with a view to safeguard the interests of the revenue, to waive such a requirement, Parliament thought it fit to substitute Section 35F and prescribe a sum, equivalent to 7 ½ percent of the disputed duty, to be deposited for an appeal to be entertained. By use of the words "shall not entertain any appeal" in Section 35F, Parliament has made it clear that the obligation to deposit 7 ½ percent of the disputed duty is imperative. No discretion has been conferred on the Tribunal, or on any other authority under the Central Excise Act, to waive such a requirement.
While the High Court undoubtedly has, in the exercise of its jurisdiction under Article 226 of the Constitution of India, wide powers, exercise of such powers is hedged by the requirement that it shall accord with law. In the present case, the statutory provision prohibits the Tribunal from entertaining an appeal without 7 ½ percent of the disputed duty being deposited by the appellant. It would be wholly inappropriate for us, in proceedings under Article 226 of the Constitution of India, to waive any such requirement.
Mr. P.R. Mullick, learned counsel for the appellants-writ petitioners, would rely on a Division Bench judgment of the Delhi High Court in Shubh Impex v. Union of India and others (order in Writ Petition (Civil) No. 138/2018 and CM No. 593/2019 dated 27.04.2018).
In the aforesaid judgment, the Division Bench of the Delhi High Court observed that the direction to deposit Rs. 1.27 crores as a pre-condition for hearing of the appeal, in the facts of the case before it and in view of the nature of the controversy involved, would deprive and deplete the petitioner therein of his cash-in-hand, and would completely disable and paralyze business operations. Considering the financial condition and background of the petitioner therein, the Division Bench was of the view that the plea raised by the petitioner therein required consideration.
Mr. P.R. Mullick, learned counsel for the appellants-writ petitioners, would submit that the law laid down by the Division Bench of the Delhi High Court, in the aforesaid judgment, would squarely apply to the facts of the case on hand since the appellants-writ petitioners herein have also suffered huge financial losses, and have deficient working capital.
The decision of a High Court will have the force of a binding precedent only in the State or territories over which the Court has jurisdiction. In other States or outside the territorial jurisdiction of that High Court, it may, at best, have persuasive effect. The doctrine of stare decisis cannot be so stretched as to give the judgments of one High Court the status of a binding precedent so far as the other High Courts are concerned. [Geoffrey Manners & Co. Ltd. Vs. CIT : Vol. 89 1996 Taxman. 287 (Bom. HC DB; CIT Vs. Thana Electricity Supply Co. Ltd. : (1994) 206 ITR 727 (Bom); and Consolidated Pneumatic Tool Co. Vs. CIT : (1994) 209 ITR 277 (Bom)]. This doctrine is applicable only to different benches of the same High Court. The ratio of the decisions of other High Courts cannot be exalted to the status of a binding precedent nor can the ratio decidendi of those decisions be perpetuated by invoking the doctrine of stare decisis. [Valliama Champaka Pillai Vs.Sivathanu Pillai : (1979) 4 SCC 429; CIT Vs. Thana Electricity Supply Co. Ltd. : (1994) 206 ITR 727 (Bom)].
Even otherwise, the decision of a Court is only an authority for what it actually decides. What is of the essence in a decision is its ratio, and not every observation found therein nor what logically follows from the various observations made in it. (State of Orissa v. Sudhansu Sekhar Mistra and others : AIR 1968 SC 647; Quinn v. Leathem : 1901 AC 495). The aforesaid judgment of the Division Bench of the Delhi High Court, rendered on the facts and circumstances of the case before it, would not constitute a binding precedent, much less on another High Court.
As it would be wholly inappropriate for the High Court, in the exercise of its extra-ordinary jurisdiction under Article 226 of the Constitution of India, to issue any directions contrary to the explicit provisions of Statutes, we see no reason to take a view different from what the learned Single Judge has taken. In this context, it must also be borne in mind that the scope of interference in an intra-Court appeal is extremely limited. Save cases where the order under appeal suffers from a patent illegality, no interference is justified. We find no such infirmity in the order under appeal.
The Special Appeal fails and is, accordingly, dismissed. No costs.