Tata Teleservices (Maharashtra) Ltd
vs. Ministry of Finance (Bombay High Court)
Action to recover tax before expiry of statutory
period for filing appeal is high-handed & in defiance of
law
Though the assessee had a statutory period of three
months to file an appeal along with stay application before
the CESTAT, the Asst CST directed the assessee to pay the
demand within two days and threatened to take coercive
action to recover the dues. The assessee filed a Writ
Petition contending that the AO’s action was in breach
of
Circular dated 01.01.2013 issued by
CBEC, and the demand was premature because the assessee had
the right to file an appeal within 3 months. HELD by the
High Court allowing the Petition:
(i) The AO’s insistence that the assessee should
pay the amount is contrary to the provisions of the Finance
Act which provides for a period of 3 months to file an
appeal to the Tribunal. It is also contrary to the
circular dated 01.01.2013 issued by the
CBEC. The impugned communications, to say the least, is
high handed. The statute has advisedly provided a period of
three months to an assessee to file an appeal before the
appellate authority and also obtain a stay. This is with a
view to enable the assessee to seek proper advice and
considered opinion on the adjudication order before taking
a decision and then challenging the adjudication order in
appeal proceedings;
(ii) In case, the Revenue is allowed to adopt coercive
measures and/or if the assessee is required to pay tax
determined immediately, it would lead to injustice to an
assessee, as his opportunity to obtain a stay from the
appellate authority would stand foreclosed. Moreover, the
inherent right of an appellate authority to stay the order
being appealed against would be rendered futile. In fact,
this Court in
Mahindra & Mahindra Limited
(1959-ELT-505) had directed the Revenue to return the
amounts recovered by encashing the bank guarantee of the
assessee as it was done before the expiry of three months
to file an appeal;
(iii) The officers of the Revenue would do well to
realize that their job is much more than merely collecting
the tax. They are officers of the State, administering the
Finance Act, 1994 and fairness in approach to the tax
payers and acting in accordance with the Rule of Law is a
sine-qua-non in discharge of all its functions;
(iv) The impugned communications are not only in defiance
of the CBEC circular dated 01.01.2013 but also in breach of
the statutory provisions which gives a period of 3 months
to enable the aggrieved party to file an appeal before the
appellate authority.
Note: The same view has been taken in the context of
the Income-tax Act in
UTI Mutual Fund 345 ITR 71 (Bom) and
MHADA (Bom)