- 1 - HC-KAR NC: 2025:KHC:39016-DB MSA No. 24 of 2020 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE D K SINGH AND THE HON'BLE MR. JUSTICE VENKATESH NAIK T MISCELLANEOUS SECOND APPEAL NO. 24 OF 2020 BETWEEN: 1. THE JOINT DIRECTOR DIRECTORATE OF ENFORCEMENT BANGALORE ZONAL OFFICE 3RD FLOOR, B BLOCK, BMTC SHANTHINAGAR TTMC KH ROAD, SHANTHINAGAR, BANGALORE-560027. REPRESENTED BY N ASHA ASSISTANT DIRECTOR DIRECTORATE OF ENFORCEMENT …APPELLANT (BY SRI. UNNIKRISHNAN M., CGC ADVOCATE) AND: 1. M/S DEVAS MULTIMEDIA PVT LTD UNIT 502, PRESTIGE MERIDAIN-1, NO.209, M.G.ROAD, BENGALURU-560001. REPRESENTED BY THE OFFICIAL LIQUIDATOR, VIDE COURT ORDER DATED 02.02.2021 …RESPONDENT (BY Ms. MANASA SUNDARARAMAN, ALONG WITH MS.SUSHMA RAO FOR SRI. GOUTHAM.R.V., ADVOCATES) ® Digitally signed by VASANTHA KUMARY B K Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:39016-DB MSA No. 24 of 2020 THIS MSA IS FILED UNDER SECTION 42 OF THE PREVENTION OF MONEY LAUNDERING ACT 2002 PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 11.09.2019 PASSED BY THE HON'BLE APPELLATE TRIBUNAL (THE PREVENTION OF MONEY LAUNDERING ACT), NEW DELHI, IN No.MP-PMLA- 4147/BNG/2017 (STAY) AND FPA-PMLA-2120/BNG/2017 (ANNEXURE - A) AND CONSEQUENTLY CONFIRM THE PROVISIONAL ORDER OF ATTACHMENT CASE No.5/2017 IN ECIR No.12/BGZO/2015, DATED 27.02.2017 PASSED BY THE APPELLANT AND THE ORDER OF THE ADJUDICATING AUTHORITY IN O.C.No.703/2017 DATED 11.10.2017 AND TO GRANT SUCH OTHER RELIFS TO THE APPELLANT, IN THE INTEREST OF JUSTICE AND EQUITY. THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE D K SINGH and HON'BLE MR. JUSTICE VENKATESH NAIK T ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE D K SINGH) Heard Sri Unni Krishnan, learned counsel for the appellant-Directorate of Enforcement and Smt. Manasa Sundarramen, learned counsel for the respondent. 2. The present appeal under Section 42 of the Prevention of Money Laundering Act, 2002 (for short 'the PML Act') has been preferred against the decision dated 11.09.2019 passed by the Hon'ble Appellate Tribunal (The Prevention of Money - 3 - HC-KAR NC: 2025:KHC:39016-DB MSA No. 24 of 2020 Laundering Act), New Delhi in No.MP-PMLA-4147/BNG/2017 (Stay) & FPA-PMLA-2120/BNG/2017 (Annexure-A). The Adjudicating Authority, vide order dated 11.10.2017, had confirmed the provisional Attachment Order dated 27.02.2017 regarding the properties (in the Form of Mutual Funds and Bank Accounts to the tune of Rs.21,38,66,041/-) of the respondent. The Tribunal has set aside the order of the Adjudicating Authority on the ground that the Adjudicating Authority has not assigned any reasons much less, any legally cogent reasons while confirming the provisional order of attachment. The Tribunal has also held that the Adjudicating Authority has not applied its independent mind to the facts and circumstances of the case and therefore, the Tribunal has allowed the appeal and remanded the matter back to the Adjudicating Authority for fresh adjudication after considering the reply filed by the respondent to the notice under Section 8(1) of the PML Act. Direction was given to the Adjudicating Authority to hear the matter on all the issues and consider the same, while passing the fresh order on remand. - 4 - HC-KAR NC: 2025:KHC:39016-DB MSA No. 24 of 2020 3. Sri Unni Krishnan, learned counsel for the appellant submits that the PML Tribunal is a creation of the Statute. It exercises limited power as vested in the Tribunal under the PML Act, it does not have any inherent powers, as are vested in the Courts. If a particular power is not vested under the Statute on the Tribunal, it cannot exercise that power. 4. Learned counsel for the appellant further submits that under sub-section (4) of Section 26 of the PML Act, the Tribunal has power as Appellate Authority to pass order of confirming, modifying or setting aside the order appealed against, as it deems fit, however, there is no such power of remand vested in the Appellate Tribunal. He further submits that whenever a Statute wanted to confer the power of remand on an Appellate Authority or Tribunal, such a power has to be specifically provided. He has drawn the attention of this Court to the provisions of Section 35(C) of the Central Excise Act, 1944 and Section 138C(a) of the Customs Act, 1962 to buttress his submission. He has also placed reliance on the decision of the Supreme Court in the case of MIL INDIA LIMITED VS. COMMISSIONER OF CENTRAL EXCISE, NOIDA reported in - 5 - HC-KAR NC: 2025:KHC:39016-DB MSA No. 24 of 2020 MANU SC 1073 2007/ (2007) 3 SCC 533. He submits that under Section 35A of the above said Act, initially, the power of remand was vested in the Commissioner (Appeals). However, the said power was taken away w.e.f. 11.05.2001 under the Finance Act, 2001. Once the power of remand under Section 35A of the Customs Act stood withdrawn from the Commissioner (Appeals), the Commissioner did not have the power to remand the matter, but the Commissioner would be required to exercise the power of Adjudicating Authority in the matters of assessment. Paragraph 3 of the aforesaid judgment, which has been pressed in service reads as under :- "13. In our view the High Court had erred in holding that the Tribunal could not have examined the question of durability, once on merits, the order of the Commissioner (A) dated 22.3.2000 became final. Firstly, one must understand that excitability is a matter of principle. The Tribunal is the highest authority in hierarchy to decide on facts whether the bought out items, were dutiable or not. The Tribunal was not bound by the decision of the Commissioner (A) on the question of durability or excitability. By order dated 22.3.2000 the Commissioner (A) had remanded the matter to the adjudicating authority the question of quantification. Therefore, it was open to the appellant to appear before the adjudicating authority and submit contentions on quantification of duty - 6 - HC-KAR NC: 2025:KHC:39016-DB MSA No. 24 of 2020 liability. In the present matter in the second round the appellant appeared before the adjudicating authority and pointed out in the alternative that the duty demanded from the appellants at the rate of Rs.94,03,500 was erroneous as the appellants were entitled to the benefit of MODVAT credit. From this it cannot be said that the question of excisability or deniability had become final. The conclusion of the Commissioner (A) in his order dated 22.3.2000 was not binding on the Tribunal. Further one needs to understand the concept of assessment. An order of assessment under the taxing law does not become become final before the adjudicating authority in every matter. It is subject to before the commissioner (A). The Commissioner (A) can even add or subtract certain items from the order or assessment made by the adjudicating authority and that order of the Commissioner(A) could be treated as an order of assessment. In complicated cases where costing in involved the adjudicating authority can also refer the matter to an expert. The Act also makes provision for special audit. However, when the principle of law is evolved an appeal lies to the appellate Tribunal under the said Act. In fact, the power of remand by the Commissioner (A) has been taken away by amending Section 35A with effect from 11.5.2001 under the Finance Bill, 2001. Under the Notes to Clause 122 of the said Bill it is stated that Clause 122 seeks to amend Section 35A so as to withdraw the powers of the Commissioner (A) to remand matters back to the adjudicating authority for fresh consideration. Therefore, the Commissioner (A) continues to exercise the powers of the adjudicating - 7 - HC-KAR NC: 2025:KHC:39016-DB MSA No. 24 of 2020 authority in the matters of assessment. Under Section 35B any person aggrieved by the order of the Commissioner as an adjudicating authority is entitled to move the Tribunal in appeal. Section 35B indicates that the decision of order passed by the Commissioner (A) shall be treated as an order of an adjudicating authority. In the circumstances the High Court had erred in holding that the assessee was not entitled to agitate the question of deniability in appeal before the Tribunal. 5. The submission of learned counsel is that the Supreme Court was of the view, that once the power of remand does not vest in a statutory authority, there cannot be any inherent or concomitant power to remand the matter back to the lower authority. He further submits that the order relied on by learned counsel for the respondent in UNION OF INDIA AND OTHERS VS. UMOSH DHAIMODE reported in 1998 (77) ECR (SC) is in respect of the powers of the Appellate Authority under Section 128(3) of the Customs Act, 1962. If we read Section 128(3) of the Customs Act, it specifically provides the power of remand in the Tribunal. Therefore, the judgment cited by learned counsel for the respondent would not be applicable. - 8 - HC-KAR NC: 2025:KHC:39016-DB MSA No. 24 of 2020 6. He further submits that PML Act is a special Statute, which has been enacted to prevent the money laundering as per the International Convention - Political Declaration and Global Programme of Action annexed to Resolution-S 17/2 and adopted by the General Assembly of United Nations on 23.02.1990. 7. If the Tribunal remands the matter to the Adjudicating Authority, the attachment order would go and it would be difficult to trace the money. Once the money attachment order is removed and the money is taken away, the whole purpose of attachment would get frustrated. The submission is that if the Tribunal is not in agreement with the order passed by the Adjudicating Authority, it can set aside or modify the order. However, if it is in agreement, it has to confirm the order. However, in the absence of specific power of remand, the impugned order is unsustainable and therefore, it needs to be set aside. 8. On the other hand, Smt. Manasa Sundararamen, learned counsel for the respondent submits that the power of remand is concomitant to the power of setting aside the order of the lower - 9 - HC-KAR NC: 2025:KHC:39016-DB MSA No. 24 of 2020 authority vested in the Tribunal. She has pressed in service the Full Bench decision of the Kerala High Court in N.K. DHARMADAS Vs. STATE TRANSPORT APPELLATE TRIBUNAL OF KERALA, AND OTHERS reported in 1962 SCC Online KER 136. 9. We have considered the submissions advanced on behalf of the parties. 10. There can be no manner of doubt that Tribunal is creation of the Statute and it exercises limited power as conferred on it, by the Statute. There is no inherent power in a Tribunal, inasmuch as the Tribunal is not a regular Court. If the Statute does not confer a power of remand, and there is no inherent power vested in the Tribunal, it cannot remand the matter back to the Adjudicating Authority unless it is specifically provided in the Statute itself. 11. We are in agreement with Mr. Unnikrishnan, learned counsel for the appellant that in the absence of specific power of remand, the Tribunal could not have remanded the matter back to the Adjudicating Authority. As we hold that the Tribunal does not have the power to remand the matter back to - 10 - HC-KAR NC: 2025:KHC:39016-DB MSA No. 24 of 2020 the Adjudicating Authority, we set aside the impugned order passed by the Tribunal and remand the matter back to the Tribunal to render its decision on merit after hearing the parties. With the aforesaid direction, the appeal is allowed. Sd/- (D K SINGH) JUDGE Sd/- (VENKATESH NAIK T) JUDGE NG List No.: 1 Sl No.: 39