CBEC Draconian Circular: Recovery of Demands when Stay plea is pending - No automatic vacation of Stay after 180 days: HC
ALMOST every High Court is striking at the root of the Board's draconian New Year Circular on recovery of demands. CBEC might not have realised a single rupee from the Circular, but the Board has generated tremendous amounts of wealth - for the lawyers, including the Government Counsels. Even, lawyers who have never appeared in a High Court, are filing writ petitions and getting Stay and hefty fees - just for the asking. Lawyers should be ever grateful to the benign Board for this New Year windfall.
Recently, the Punjab and Haryana High Court came down heavily against the circular. It not only held the very basis of the Circular as untenable, misconceived, wholly illegal and arbitrary, but also set aside the condition of recovery, if no stay is granted within 30 days, as illegal, arbitrary, unjustified and read down the condition that a stay granted gets automatically vacated after 180 days. After 180 days, the Court wants the Department to move an application before the Tribunal for vacation of Stay.
Some gems of judicial wisdom from the exhaustive judgement replete with erudition supported by huge precedence:
1. The assessee in no way can insure that the Commissioner (Appeals) shall decide his application for dispensation of the duty demanded and penalty levied within a period of 30 days.
2. The Revenue cannot take a right which has been conferred by statute only for the reason that the application for waiver of pre-deposit could not be disposed of within 30 days.
3. It would be a farce, if without considering the application for pre-deposit, the recovery proceedings are initiated for no fault of the assessee.
4. The statutory right of appeal or of consideration of an application for pre- deposit cannot be frustrated administratively.
5. Till such time, the application for waiver of pre-deposit is decided in an appeal filed in terms of the Statute, the Revenue shall not proceed to recover the same provided that the assessee does not delay the hearing of the appeal directly or indirectly.
6. Where the assessee has no control over the functioning of the Tribunal, then the provision of vacation of stay cannot be sustained.
7. Condition of automatic vacation of stay on the expiry of 180 days, has to be read down to mean that after 180 days the Revenue has a right to bring to the notice of the Tribunal the conduct of the assessee in delay or avoiding the decision of appeal, so as to warrant an order of vacation of stay.
It is Simple; if the Tribunal created by the State cannot decide my Stay application, the State cannot punish me - only the Board does not understand this or they do but refuses to admit that. On 1st April 2013, they can inform the FM that Revenue targets could not be reached because of the mischief caused by the High Courts!
The P&H High Court judgement is a classic analysis of the provisions of appeal, stay and recovery and every revenue officer should read it.
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