Recovery when Stay Application is Pending
OVERZEALOUS Revenue officers, having no respect for the Law which they are paid to implement or the Judicial Authorities whom they are bound to follow, or the Boards to whom they are subordinates, go crazy and resort to all sorts of illegal activities to collect what they assume to be government dues.
Just yesterday, we came to know about an Additional Commissioner who addressed a large gathering of his staff and told them not to follow the Delhi High Court judgement in the Home Solution Retail India - , even after we carried the Delhi High Court decision in the SSIPL RETAIL LTD & ORS - wherein the High Court found fault with the Department for assuming that the Delhi High Court judgement was not valid as the Department had gone in appeal. This Additional Commissioner who is supposed to instil a sense of respect for the judiciary in the minds of his subordinates was openly telling them to disobey the High Court order and persuade the assessee to pay up or resort to coercive action. The subordinates are not all that stupid, if they are asked by the Additional Commissioner to disobey the High Court, why should they obey the Additional Commissioner? This very Additional Commissioner told his staff that the decision of the Bombay High Court in the Indian National Shipowners - case about the effective date for Service Tax on import of services. He told them that the CESTAT Larger Bench decision in Hindustan Zinc is still valid. He conveniently forgot that the Government lost in the Supreme Court in the Indian National Shipowners and twice in the Hindustan Zinc case.
In several cases, when stay applications are pending with appellate Authorities, the Revenue officers do not have the patience to wait for the appellate orders and they resort to all means – legal and illegal to collect their pound of flesh. Is it the assessee's fault that Commissioner (Appeals) posts are lying vacant?
Recently the Bangalore bench of the CESTAT had observed,
We would like to mention that we have been coming across these kinds of letters issued by the lower authorities for the recovery, despite the stay petition filed, is pending before Tribunal. In our considered view, this action of the lower authorities is not in consonance with the law, as has been settled by the higher judicial forum. It is a settled law that if a stay petition for waiver of pre-deposit of dues is pending before the Tribunal, the lower authorities should not proceed to recover the dues. Suffice to say, that this action is not in accordance with law and should desist from such action
The Tribunal directed the registry to mark copy of this order to all the Chief Commissioners and Commissioners under jurisdiction of Bangalore Bench.
Now what will happen?
Most probably, this order will not be read by any Chief Commissioner or Commissioner – they have better things to do. Most probably it will not reach them; it will be submerged in the flood of correspondence they get every day. But even if they do get it, what will happen – they will routinely forward it their subordinates until it reaches an Inspector who has no subordinate.
In any case when they have no respect for the Supreme Court and their own Board, will a copy of a CESTAT order make any difference?
Judicial and executive indiscipline has become a hallmark of the Revenue Departments as every revenue Officer knows that his immediate superior is far more important than the Supreme Court or the Board!
Please see the CESTAT order in 2010-TIOL-179-CESTAT-BANG