Draconian Circular - Recovery of demands - Decision in L&T case to apply to all - HC
IN Larsen & Toubro Limited Vs. Union of India - , the Bombay High Court held,
"17. For these reasons, 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."
Despite this emphatic ruling, the Central Excise and Service Tax authorities in Mumbai hold a view that this judgement is applicable only to the petitioners and all other assesses who want the benefit of this judgement have to hire lawyers and approach the High Court.
In one particular case, even while the stay petition was pending, Revenue attached the bank accounts of an assesse.
The Bombay High Court last week held that, "The law laid by the Court on the interpretation of the circular of the Central Board of Central Excise and Customs would bind all authorities who are subject to the jurisdiction of this Court."
The High Court found that there was absolutely no reason or justification on the part of the appellate authority to keep the stay application pending and take recourse to coercive remedies under the law.
The High Court directed that henceforth the controlling authority shall issue a circular to all the authorities within his jurisdiction that the directions contained in the judgment of this Court in Larsen & Toubro Limited shall be duly observed.
However the High Court declined to order return of the money attached from bank by Revenue.