Arrears recovery - Coercive Action when Appeal Admitted by SC
WE received this mail -
"All the Board Circulars issued till date on the subject of recovery of arrears when the appeal is pending pertain to appeals before the Commissioner (A) or the CESTAT and not the High Court or Supreme Court [Board Circulars dt.02.06.1998 & dated 25.05.2004 or the Supplementary Manual Chapter 18, Part III refers].
In this scenario, whether coercive action can be initiated for recovery when the appeal filed by the assessee is admitted by the Supreme Court is not known.
Incidentally, since the appeal has been admitted by the Apex Court, one cannot but wait for the appeal to be heard in due course and the department may file Miscellaneous Application for early hearing.
The Board in its Circular no. dated 22.09.2003 has mentioned the following -
"6. The Directorate should also play an important role in getting the old cases listed for hearing in Supreme Court, in co-ordination with the concerned Commissionerates. In order to get interim stay orders vacated from the Supreme Court, the DLA should tie-up with the Commissionerates for filing of Misc. Application for early hearing . Necessary co-ordination in this respect may be ensured."
Yet, in some Commissionerates, the Revenue authorities are initiating coercive steps for recovery of the adjudged dues.
While there is no clear-cut instruction allowing this action, it needs to be understood that such an action may be termed as improper in the eyes of the law.
The following decision of the Supreme Court in the case of UOI vs. West Coast Paper Mills Ltd. () throws light on the aspect that once an appeal is admitted by the Supreme Court, the judgment of the Tribunal is in jeopardy (and obviously one cannot enforce the said Tribunal judgment).
The relevant paragraphs of this decision are reproduced under -
"14. Article 136 of the Constitution of India confers a special power upon this Court in terms whereof an appeal shall lie against any order passed by a Court or Tribunal. Once a Special Leave is granted and the appeal is admitted the correctness or otherwise of the judgment of the Tribunal becomes wide open. In such an appeal, the court is entitled to go into both questions of fact as well as law. In such an event the correctness of the judgment is in jeopardy.
15. Even in relation to a civil dispute, an appeal is considered to be a continuation of the suit and a decree becomes executable only when the same is finally disposed of by the Court of Appeal.
38. In the aforementioned cases, this Court failed to take into consideration that once an appeal is filed before this Court and the same is entertained, the judgment of the High Court or the Tribunal is in jeopardy. The subject matter of the lis unless determined by the last Court, cannot be said to have attained finality. Grant of stay of operation of the judgment may not be of much relevance once this Court grants special leave and decides to hear the matter on merit. "
It is, therefore, felt that the Board issues instructions on the subject matter so that the dilettante jurisdictional range authorities do not land into trouble by way of a contempt petition or get a rap from the apex Court."
DDT requests the CBEC to look into the matter.