The High Court (HC) Gujarat held that the disposal of appeal without attaining finality and allowing the reopening of all issues creates a multiplicity of proceedings.
Supreme Treves Pvt. Ltd, the petitioners alleged that the Tribunal instead of deciding the matter has remanded it to the Assessing Officer since the matter is 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 Supreme Court.
A Coram comprising of Justice A J Desai and Justice Nisha M Thakore observed that the entire basis of remand ordered by the Appellate Tribunal 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 considering not only the position of income tax but also on basis of terms and conditions of the employment of Directors.
Further viewed that the Directors of a company were employees, and remuneration paid to Directors was not chargeable to service tax. In such circumstances, we find that the approach of the Tribunal for remand was not proper.
In the case of Essar Steel India Ltd. the court observed that since disposal is not final and is open to the reopening of all the issues, this would lead to a multiplicity of proceedings. Under Section 35C(1) of the Central Excise Act, the Tribunal is mandated to dispose of the appeals on merits and was simply not open for the Tribunal to jettison the litigation.
It was observed 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 the Tribunal is not proper. The Court directed the Tribunal to decide the matter on the merits
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