Whether it is justifiable to initiate recovery proceedings after 30 days of filing appeal and during pendency of stay applications?

PJ/Case Laws/2012-13/1418

Case: HINDUSTAN ZINC LTD V/S UNION OF INDIA & ORS

Citation: 2013-TIOL-67-HC-RAJ-CX

Brief Facts: - The petitioner, Hindustan Zinc Ltd. filed a writ petition before the High Court to consider the matter relating to stay of recovery of arrears during the pendency of stay applications. The petitioner referred to Circular No. 967/2013-Cx by saying that the recovery stays until the next date in this matter or until disposal of the stay application by the Appellate Authority, whichever is earlier, there shall be stay over recovery of the amount as involved in the appeals said to have been filed by the petitioner before the Appellate Authority. The High Court made it clear that pendency of this writ petition or passing of this order shall not be of any impediment in the Appellate Authority considering the stay application/s moved by the petitioner; and for that matter, the petitioner shall be under an obligation to attend the date of hearing, if at all fixed by the Appellate Authority for consideration of the stay application.

Appellant’s Contention: - The appellant submits that on the basic issues, the present petition is akin to CWP No.541 /2013 wherein notices have been ordered to be issued by this Court today with passing of limited stay order. However, he frankly submits that in the present case, they have filed separate appeals which are pending before the Commissioner (Appeals), Jaipur-II and has also filed other appeals against the appellate orders which remain pending before the Custom, Excise and Service Tax Appellate Tribunal (CESTAT'). It is submitted that essentially the grievance as arising out of predicament is that the Appellate Authority as also the Appellate Tribunal have not taken up the respective appeals and stay applications for hearing/consideration; and while the matters remain simply pending, the Central Board of Excise and Customs has issued the questioned circular bearing number 967/01/2013-CX dated 01.01.2013 which, in effect, requires recovery proceedings to be initiated after 30 days of the filing of the appeal in case no stay is granted. It is submitted that the stipulations contained in the said circular are likely to cause unnecessary prejudice to the petitioner whose appeals and the stay applications on one hand remain pending without the Appellate Authority/Tribunal taking up the same for consideration; and on the other hand, the disputed demands being sought to be recovered by adopting coercive methods.

He has also referred to an order dated 09.01.2013 said to have been passed by the Hon'ble Andhra Pradesh High Court in WP No. 734/2013. He submits that as per his instructions, there are only two posts of Commissioner (Appeals) at Jaipur, one of which is vacant since the month of October 2011 and several of such matters remain pending consideration.

Reasoning of Judgment: - The Hon’ble High Court held that as regards the appeals, said to have not been taken up by the Commissioner (Appeals) as per the interim order passed in CWP No. 541/2013: R.S W.M . Limited Vs. Union of India & Ors = (2013- TIOL - 61-HC-RAJ-CX) and maintaining parity, in their view, the petitioner is entitled to the similar order but so far the appeals pending before the CESTAT are concerned, this order would not be operative and in that regard, the petitioner would otherwise be free to take recourse to the appropriate remedies in accordance with law including making of a request before the CESTAT for early taking of the appeals and the stay applications. Subject to the observations, let notices be issued to the respondents to show cause as to why this petition be not admitted and finally disposed at this stage. Notices of the stay application be also issued. Notices are be made returnable on 06.02.2013 and be given ' Dasti ' to the petitioner, if so desired. In the meanwhile and until the next date in this matter or until disposal of the stay application by the Appellate Authority, whichever is earlier, there shall be stay over recovery of the amount as involved in the appeals said to have been filed by the petitioner before the Appellate Authority. It is made clear that pendency of this writ petition or passing of this order shall not be of any impediment in the Appellate Authority considering the stay application/s moved by the petitioner; and for that matter, the petitioner shall be under an obligation to attend the date of hearing, if at all fixed by the Appellate Authority for consideration of the stay application. It is further made clear that the petitioner shall be under an obligation to abide by the order that might finally be passed by the Appellate Authority on the prayer for interim relief in the appeal/s; and for that matter, pendency of this writ petition shall not be of any impediment in the Appellate Authority passing the appropriate order in accordance with law nor the petitioner shall be entitled to avoid its liability.

Decision: - The appeal was dismissed.

Comment:-This is one of the several writ petitions being filed in the High Courts after the issuance of the draconian circular 967 dated 1.1.2013 which has been the subject matter of litigation as its purpose is to harass the assessees by resorting to unjust coercive methods of recovery. This circular has increased the work load of High courts and added unnecessary cost to the appellants. Nevertheless, stay from recovery proceedings were granted in this case also till the disposal of stay applications filed by the assessee.

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PJ/Case Laws/2012-13/1418

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