Recovery of Demands - CBEC Withdraws Draconian Circular - After ‘Draconity' Diminished
ON 1.1.2013, as a new year gift to the unsuspecting assessees of indirect taxes, the CBEC unleashed a draconian circular. The Circular No. , dated, January 01, 2013 inter alia stipulated that:
1. If a stay application is filed before the Commissioner (Appeals) and CESTAT and if there is no stay within 30 days, recovery action has to be initiated.
2. In case of stay applications before High Courts and Supreme Court, even this 30 days time is not available. Recovery has to be initiated immediately after the orders if there is no stay.
3. If Commissioner (Appeals) confirms demand in the Order in original, recovery has to be initiated immediately
The Board then withdrew seven circulars on this subject issued from 1988 to 2004.
In DDT 2015 02 01 2013, I wrote,
The Circular issued by the Board lacks foresight, proper understanding of the real situation and shows utter lack of respect for established procedure and the judicial system in the country. This Circular will no doubt create lot of work for the High Courts, as many Writ Petitions will be filed against this atrocious Circular.
Certainly, this is not the way to treat the goose that lays golden eggs for the department.
Before causing damage to the industry and embarrassment to itself, the Board should immediately do proper introspection and withdraw this draconian Circular.
The Board has indeed withdrawn this draconian circular - after more than three years and unwanted litigation in several High Courts and the Supreme Court, where the department lost with consistent regularity.
In DDT 2027 18.01.2013, I asked, "Do we need all this drama to collect taxes? Are we dealing with thugs and thieves? - even they are treated with more respect"
22.01.2013, mentioned,