Case Details: Electrosteel Casting Ltd. Versus Commissioner Of CGST And CX, Kolkata (2025) 37 Centax 22 (S.C.)
Judiciary and Counsel Details
- J.B. Pardiwala & K.V. Viswanathan, JJ.
- S/Shri K. Parameshwar, Sr. Adv., Aakash Bajaj, Rahul Dhanuka, Ms. Prerona Banerjee, Advs., M/s Khaitan & Co., AOR, for the Petitioner.
- S/Shri Raghavendra P Shankar, ASG, V. C. Bharathi, Gurmeet Singh Makker, Udit Dedhiya, Digvijay Dam, Advs., for the Respondent.
Facts of the Case
The matter concerned an order of the High Court staying the operation, implementation and execution of an order of the CESTAT which had allowed refund with interest at 9%, without formulating any substantial question of law. The record showed that the High Court granted the stay in the department’s appeal without first examining whether a substantial question of law arose under section 35G of the Central Excise Act, 1944 read with section 83 of the Finance Act, 1994. The issue before the Hon’ble Supreme Court was whether such stay could be granted without following the statutory requirement of identifying and framing a substantial question of law. The matter was accordingly placed before the Hon’ble Supreme Court.
Supreme Court Held
The Hon’ble Supreme Court held that the High Court was not justified in staying the order of CESTAT without first considering the substantial question of law suggested by the department and formulating such question as required under section 35G of the Central Excise Act, 1944 read with section 83 of the Finance Act, 1994. The Court observed that the correct approach for the High Court was to examine the substantial question of law, satisfy itself regarding its existence, frame such question and only thereafter pass any interim or final order in the appeal. The Court directed the High Court to take up the department’s appeal afresh, examine the substantial question of law proposed and, if it finds merit, admit the appeal and pass appropriate orders. The Court clarified that the assessee would remain free to take steps in accordance with law depending on the outcome. The petition was accordingly disposed of.
