KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD (KIADB) Vs. UNION OF INDIA, THE MINISTRY OF FINANCE GOVERNMENT OF INDIA, THE CENTRAL BOARD OF EXCISE AND CUSTOMS AND THE COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) Having heard the learned counsel for the parties, perused the pleadings, undoubtedly the appeal preferred by the petitioner is pending consideration before the CESTAT which has jurisdiction over 3 states i.e., Karnataka, Andhra Pradesh, Kerala. The pendency of the appeal and the application for interim stay is on account of non re-constitution of the Bench, which was reconstituted sometime during February 2013. If that is so, then the respondent-Revenue ought to have refrained itself from issuing any demand notice until such time the interlocutory application for stay of the amount due, subject-matter of appeal, is considered by CESTAT. The failure on the part of the Union of India in not making appointment of a judicial member to CESTAT, it cannot be said that it is due to petitioner's lapse that the appeal and the IA for stay are not considered by CESTAT When the petitioner cannot be held responsible for the non-constitution of the Bench of CESTAT, undoubtedly the demand notice issued by the respondent calls for interference.

(2.) Learned counsel for the parties submit that there are any number of Benches of CESTAT up north, while down south, more appropriately for the 3 states, supra, there is only one Bench and large number of matters are pending consideration. If that is so, then the Union Government must wake up to the clarion call and constitute any number of Benches as may be required for speedy disposal of the appeals. Though no relief is sought for in the petition for a writ of mandamus to direct the 1st respondent-Union of India to constitute additional Benches of CESTAT for the southern states, it is appropriate to issue necessary directions. In the result, this petition is allowed in part. A direction is issued to the respondent not to recover the arrears of service tax pursuant to the demand notice, Annex. E and await orders of CESTAT over the application filed along with the appeal by the petitioner for interim stay of the demand impugned therein. A direction is issued to the 1st respondent-Union of India by way of a writ of mandamus to constitute and establish as many number of Benches of CESTAT for the 3 southern states of Karnataka, Andhra Pradesh and Kerala forthwith and file a report with the Registrar General of the High Court by way of compliance, on or before 3/6/2013, failing which the matter would be takes seriously.