Tax Tribunal issues order against a law firm for forum shopping

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In an unprecedented order, a tax tribunal has barred cases and appeals filed by a law firm from being heard by any bench headed by one of its judicial members.

The order comes in the backdrop of a recent controversy over the law firm getting a favourable order from the bench after an adverse ruling from the Supreme Court.

No cases or appeals represented by Lakshmikumaran & Sridharan should be posted before any bench presided over by Archana Wadhwa, the registrar of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) said in a circular dated October 21on behalf of tribunal president Justice (Dr) Satish Chandra.

A bench headed by Wadhwa had granted relief to Dewsoft Overseas Pvt Ltd., represented by Lakshmikumaran & Sridharan, in August after an adverse ruling by the Supreme Court, which asked the company to deposit about Rs 14 crore towards payment of a tax demand.

The tribunal had ruled that the tax demand and penalty were not justifiable – in conflict with the Supreme Court’s order. ETfirst reported on September 27 that Dewsoft obtained the favourable ruling from CESTAT in what the Department of Revenue alleged was an “abuse of the process of law.”

Although advocates from the same firm appeared before both the apex court and the tribunal, the CESTAT wasn’t informed that the Supreme Court was seized of the matter and neither did the lawyers withdraw the application filed with the tribunal.

Once the civil appeal was admitted by the Supreme Court, the tribunal had no jurisdiction to entertain an application from the company, the revenue department said.

The tribunal’s registry, which was sent a certified copy of the apex court’s order on July 19, failed to place it before the bench, the revenue department contended.

The service tax department had slapped a Rs 10.59 crore demand on New Delhi-based Dewsoft, a software design and development company, back in 2009. A CESTAT bench confirmed the demand in October 2015, with an equivalent amount as penalty.

In April 2016, the company filed an application against this order for Rectification of Mistake before CESTAT. The following month, Dewsoft also filed a civil appeal before the Supreme Court, contesting the CESTAT order of October 2015.

Lakshmikumaran & Sridharan denied allegations of forum shopping, a practice used to get cases heard in a court that may grant a favourable judgeme