In absence of specific pleadings of perversity, cannot frame substantial question of law: Gauhati High Court

The Gauhati High Court on Monday held that although it remains open to a court to frame a substantial question of perversity but the same cannot be done without specific pleadings demonstrating perversity in an order (The Commissioner of Central Goods & Service Tax vs. M/s Pan Parag India Limited)..A Bench of Chief Justice Sudhanshu Dhulia and Justice Soumitra Saikia was hearing an appeal by the Commissioner of Central Goods & Service Tax against an order of the Customs, Excise and Service Tax Appellate Tribunal directing the appellant to refund the amount paid by the assesse in an escrow account by way of forfeiture, for an alleged violation of the conditions of exemption being availed by the appellant..The assesse argued that the appeal was not maintainable on two grounds. Firstly, the monetary amount involved was lower than ₹1 crore as notified by an instruction issued by Central Board of Indirect Taxes & Customs.“The monetary limit of Rs. 1 crore and above has been fixed by the Finance Department in respect of appeals to be filed by the Department/Government before the High Court,” submitted Senior Advocate A Saraf..Further, it was submitted that the appeal was not maintainable even on merits since there was no substantial question of law.“The dispute sought to be agitated by the appellant relates to factual issues which have been correctly arrived at by the Tribunal.”.However, the bench observed that the restriction of “monetary limit” was not an absolute bar and in matter involving common principle, the High Court had the power to entertain appeals subject to the provisions of Section 35G of the Central Excise Act.“A reference to Section 35G of the Central Excise Act, 1944 shows that an appeal shall lie to the High Court from every order passed by an appellate Tribunal provided that the High Court is satisfied that the matter involves substantial questions of law.”.The Court discussed the judgment of the Supreme Court in M Janardana Rao vs. Joint Commissioner of Income Tax where tests to determine substantial questions of law were laid down and the top court stressed that a High Court must do everything to distinguish between a question of law and a substantial question of law..Therefore, on finding that the issue of wrong utilisation of credit was already dropped by the Additional Commissioner, Central Excise, Dibrugarh and no appeal was preferred against the order, the matter had attained finality. Considering this, it was concluded that the appeal did not raise any question of law..Another issue grappled by the Division Bench was with regard to perversity in the Tribunal’s judgment. It was noted that although the same was not pleaded specifically, it was orally submitted by the appellant’s counsel.While examining the issue, the judgment in S.R. Tewari vs Union of India was discussed where it was held that a decision would be perverse if it was arrived at without basis or thoroughly unreliable evidence and no reasonable person would act upon it. The Court further stated that if some evidence is acceptable, the conclusions would not be perverse..In light of the discussion, the appeal was dismissed..[Read Judgment]