Recovery of Demands when Stay petitions pending - Draconian Circular Quashed - Almost

By Vijay Kumar

THE High Court of Rajasthan at Jaipur recently held the CBEC New Year Circular non est .

The High Court held that the assessee ought not to be penalised either for the failure of the Commissioner (Appeals) or the Tribunal, as the case may be, to entertain and dispose of either the appeal or the interim request for dispensing with the deposit of duty demanded or penalty levied.

The High Court observed that

The impugned circular is conspicuously dissentient thereto qua the eventualities where appeals with applications for interim relief by way of dispensation of deposit of duty demanded or penalty levied are filed but pending without any decision whatsoever sans any default on the part of the assessee and for that matter, the appellants.

Any view to the contrary would be repugnant to the statutory comprehensions and the underlying intendment of the Act providing the statutory remedies against the orders demanding duty and penalty as contemplated therein.

The right of appeal being statutory in nature, the incidental provision for exemption, in deserving cases, by way of interim relief, from making the otherwise mandatory deposit of duty demanded or penalty levied, can by no means be trivialized or annihilated by any administrative ukase.

Such a conferment can permissibly be circumscribed only by and to the extent ordained by the statute. The extinction of such a statutorily conferred right by any administrative fiat without the sanction of the enactment endowing the same is impermissible.

The remedy by way of appeal and interim absolution from the requirement of deposit of duty demanded or penalty levied being a legislative prescript, denial thereof by the ipse dixit of an authority even statutory dehors legal ratification would be unsustainable.

In absence of any enabling power therefor, express or implicit, by no means, can such an authority sans any valid empowerment vide instructions of administrative nature supplant statutory provisions of obverse overtones and thus, render the same otiose.

The Court held, "The impugned circular dated 1.1.2013 obligating the concerned authorities to initiate recovery proceedings on the expiry of period as mentioned therein so far as it relates to the situations where appeals with stay applications have been filed, but no stay had been granted and the stay applications had been kept pending for reasons not attributable in any manner whatsoever to the petitioners/ assessees and resultantly, no interim relief had been granted, is non est."

The High Court order is in classic English with a liberal sprinkle of legal maxims and phrases, some of which perhaps need explanation:

Please see 2013-TIOL-185-HC-RAJ-CX