CBEC Draconian Circular Not Quashed/Stayed - but Recovery Stayed
LAST Friday, the Bombay High Court delivered a detailed judgement in a case challenging the CBEC Circular No. 967/01/2013 dated 1.1.2013. Rumours spread fast and wide that the High Court had stayed/quashed the Circular. We were flooded with calls and mails finding fault with us for not carrying the news - we wanted to wait for the order.
Now the order is out - and there is no Stay or quashing of the Circular, but the Court observed, "we have come to the conclusion that the provisions contained in the impugned circular dated 1 January 2013 mandating the initiation of recovery proceedings thirty days after the filing of an appeal, if no stay is granted, cannot be applied to an assessee who has filed an application for stay, which has remained pending for reasons beyond the control of the assessee . Where however, an application for stay has remained pending for more than a reasonable period, for reasons having a bearing on the default or the improper conduct of an assessee , recovery proceedings can well be initiated as explained in the earlier part of the judgment."
The High Court observed that the protection of the revenue has to be necessarily balanced with fairness to the assessee. The High Court was of the view that the Circular was issued in terrorem - its plain effect and consequence is to deprive the assessee of the remedy, which is provided under the law of appeal.
The High Court was quick to add, " Where however, an application for stay has remained pending for more than a reasonable period, for reasons having a bearing on the default or the improper conduct of an assessee, recovery proceedings can well be initiated."
Will the Board learn from the writing on the wall? Not a single rupee would have been recovered with the circular, but every High Court where the matter is agitated has granted stay of recovery.
You pass atrocious orders demanding mind-boggling amounts; you get Parliament to pass unfair laws; you don't fill vacancies in the Tribunal - and you blame the assessee for all these ills and want him to pay up those joke demands. Except the lawyers, nobody has benefitted from your Circular. You can prevent further damage by withdrawing this Circular and telling the FM that his targets are not reachable with or without this Frankenstein Circular.
We would have in the normal course carried the Bombay High Court judgement tomorrow, but because of the hype created and to clear the mist, we bring it to you today.
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