1 stxa2.18 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH : NAGPUR SALES TAX APPEAL NO.2 OF 2018 M/s. Anshul Impex Private Ltd., having its office at House No.1367, Plot No.50/51, Ujjwal Housing Society, Bajiprabhu Nagar, Ram Nagar, Nagpur - 440 010, through its General Manager Shri [ENTITY]. Appellant - Versus - 1) [ENTITY], through the Additional Chief Secretary - Finance, 5th Floor, Secretaries Cabin, main Building, Mantralaya, Madam Kama Road, Hutatma Rajguru Chowk, Mumbai - 400 032. 2) The President, Maharashtra Sales Tax Tribunal, 7th Floor, Vikrikar Bhavan, Mazgaon, Mumbai-400 010. 3) The Commissioner of Sales Tax, 8th Floor, Vikrikar Bhavan, Mazgaon, Mumbai - 400 010. 4) The Joint Commissioner of Sales Tax (Administration), Vikrikar Bhavan, Civil Lines, Nagpur-440 001. 5) The Deputy Commissioner of Sales Tax, NAG-VAT-E-010, Vikrikar Bhavan, Civil Lines, Nagpur - 440 001. Respondents Uploaded on - 29/09/2018 Downloaded on - 30/09/2018 02:05:41 2 stxa2.18 Shri [ENTITY], Senior Advocate with Shri [ENTITY], Advocate for appellant. Shri [ENTITY], Government Pleader for respondents. Date of reserving the judgment : 07/09/2018 Date of pronouncing the judgment : 28/09/2018 CORAM : [ENTITY] AND MRS. [ENTITY], JJ. DATED : SEPTEMBER 28, 2018 JUDGMENT (PER [ENTITY], J.) :
Admit. Heard finally by consent of Shri [ENTITY], learned Senior Counsel for appellant, and Shri [ENTITY], learned Government Pleader for respondents.
2) Challenge in this appeal is to the order dated 22/2/2018 passed by the Maharashtra Sales Tax Tribunal, Nagpur (hereinafter referred to as "the Tribunal") thereby dismissing appeal filed by appellant for not depositing 10% of the disputed tax as required under the provisions of [SECTION] of the [ACT] (hereinafter referred to as "the Act of 2002"). The prayers in the appeal is to quash the order dated 22/2/2018 passed by the Tribunal dismissing appeal and to stay the recovery proceedings initiated by respondent Authorities. The appeal is accompanied by [CASE NUMBER] for interim reliefs.
3) Admittedly, appeal against order passed by the Tribunal can be filed before this Court by virtue of provisions of [SECTION] of the Act of 2002. The relevant provision of [SECTION] of the Act of 2002 is reproduced below :
"27. Appeal to High Court -
(1) An appeal shall lie to the High Court from every order passed by the Tribunal including a judgment by way of advance ruling, if the High Court is satisfied that the case involves a substantial question of law.
(3) (4) (5) (6) (7) (8) (9)
As such, we find that appeal can be filed before this Court only if it involves substantial question of law.
4) This Court vide order dated 12/4/2018, on hearing learned Counsel for the parties, formulated following substantial questions of law and directed the parties to maintain status quo :
4 stxa2.18 "(1) Whether the Tribunal has committed an error in dismissing the appeal as not maintainable for want of deposit of 10% of the amount assessed, so as to give retrospective effect to the amendment introduced on 15.04.2017 to [SECTION] of the [ACT] ? (2) Whether in the facts and circumstances of the case the respondent was competent to initiate action of coercive recovery under [SECTION] of the Act even before expiry of the period prescribed to prefer an appeal ?"
5) Shri [ENTITY], learned Senior Counsel for appellant, submitted that assessment order involved in the present appeal, is of the financial year 2010-11, passed on 30/10/2014, of which review was filed on 13/4/2017, which is reviewed by respondent no.4 under the provisions of [SECTION] of the Act of 2002 vide its order dated 27/7/2017 and demand of Rs.25,55,07,626/- inclusive of tax, interest and penalty was raised. The said review order was challenged before the Tribunal by filing appeal on 25/9/2017. The limitation for filing appeal was of 60 days and during that period, no action for recovery of dues could be initiated for recovery of dues. It is the case of appellant that in spite of filing first appeal, no hearing was granted on admission nor on application for stay and on lapse of 60 days' period, as there was no stay by the Tribunal, respondent no.5 initiated recovery proceedings by attaching the bank accounts and issuing notices to debtors, other Government Departments and Banks. It is submitted that thereafter since there was no
5 stxa2.18 hearing held for about three months' period and since recovery proceedings as aforesaid had already commenced, appellant had pressed for grant of hearing on the stay application, but neither appeal nor application for stay was considered. In the circumstances, appellant was constrained to file [CASE NUMBER] praying for quashing of review order passed by respondent no.4, which petition is submitted to have been disposed of without observing anything on merits and leaving all the contentions open for consideration for the Tribunal in appeal, observing that the said order is appealable before the Tribunal under [SECTION] of the Act of 2002 and such recourse is available to appellant. It is further contended that the review order passed by respondent no.4 was challenged before the Tribunal by initiating proceedings on 13/4/2017. The amended provisions of [SECTION] of the Act of 2002 came into effect from 15/4/2017 having prospective effect. However, the Tribunal by holding said provision to be retrospective, dismissed the appeal. Hence, this appeal.
In support of his submissions, learned Senior Counsel has relied upon the judgments in the case of [PRECEDENT], [PRECEDENT] and [PRECEDENT] and prayed that appeal be allowed.
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6) On the question of recovery proceedings initiated by respondent no.5 pending appeal, it is submitted that such action is directly in violation of settled legal principles as has been laid down in the case of [PRECEDENT]. It is, therefore, submitted that such action of recovery proceedings initiated against appellant is illegal and needs to be stayed.
7) Shri [ENTITY], learned Government Pleader for respondents, by referring to the affidavit-in-reply of respondent no.4, has submitted that as per amended provision of [SECTION] of the Act of 2002, which has come into effect from 15/4/2017, it was obligatory on the part of appellant to deposit amount to the extent of 10% of the disputed tax before filing appeal before Tribunal, more particularly when the amendment came into effect before passing of review order on 27/7/2017. Learned Government Pleader in support of his submissions, relied upon judgment of the Hon'ble Apex Court in the case of [PRECEDENT], which has upheld the mandatory provision of [SECTION] of the [ACT], which prescribed that 7.5% or 10% of the duty demanded or penalty levied is to be deposited in case appeal is preferred before the Commissioner (Appeals) or the Tribunal. It is submitted that provisions of [SECTION] of the Act of 2002 are pari materia with the provisions of [SECTION] of the [ACT] 7 stxa2.18 and thus submitted that in view of ratio laid down in the cited judgment, appeal is liable to be dismissed.
8) On the second question framed, it is the case of respondents that the recovery proceedings were rightly initiated after expiry of 60 days' period as admittedly there was no stay to such proceedings by the learned Tribunal. It is contended that as mandatory provisions of [SECTION] of the Act of 2002 of depositing amount to the extent of 10% of disputed tax along with appeal before appellate Authority has not been complied with by appellant, action of recovery initiated cannot be said to be illegal.
9) In fact, it is submitted for respondents that since appellant had not fulfilled the statutory obligation, the application for stay was rightly not considered by the Tribunal and thus, as appellant could not produce any stay order before respondent no.5, recovery proceedings were rightly initiated to realize the revenue due to the State. However, it is contended that on appellant's submitting [SECTION] to respondent nos.4 and 5 on 22/3/2018 and 23/3/2018 respectively, no coercive action is initiated against appellant, but recovery proceedings since were already initiated, could not be called back in the absence of any valid stay order from appellate Authority.
10) Thus, the facts which emerge from the submissions advanced 8 stxa2.18 as aforesaid are that assessment order concerning appellant for the financial year 2010-11 was passed on 30/10/2014, of which review proceedings were initiated on 13/4/2017, upon which review order was passed on 27/7/2017, which was challenged by way of appeal before Tribunal on 25/9/2017, which appeal came to be dismissed by the impugned order dated 22/2/2018 and before order of review was passed on 27/7/2017, [SECTION] of the Act of 2002 came to be inserted by amendment with effect from 15/4/2017.
11) The impugned order reveals that appeal came to be dismissed by the Tribunal observing that first appellate order was passed on 27/7/2017 and before that date, amended provisions came into effect from 15/4/2017, which required appellant to deposit 10% of the disputed tax along with appeal as a pre-condition of admission of appeal, however, appellant has not complied with said mandatory provisions of [SECTION] of the Act of 2002 and since said amount was not deposited, appeal came to be dismissed.
12) In view of facts involved in the appeal and submissions advanced as aforesaid, amended provisions of [SECTION] of the Act of 2002 when perused, read as under :
"No appeal shall be filed before the Tribunal against an order, which is passed on or after the commencement of the Maharashtra Tax Laws (Levy, Amendment and Validation) Act,
9 stxa2.18 2017 (Mah. XXXI of 2017), unless it is accompanied by the proof of payment of an aggregate of following amounts, as applicable -
a) in case of an appeal against an order, in which claim against declaration of certificate has been disallowed on the grounds of non-production of such declarations or as the case may be, certificates then amount of tax, as provided in the proviso to sub-section (6).
b) in case of an appeal against an order, which involves disallowance of claims as stated in [SECTION] above and also tax liability on other grounds, then, an amount equal to 10 per cent of the balance amount of disputed tax, so far as such tax liability pertains to tax on grounds, other than those mentioned in [SECTION],
c) in case of an appeal against an order, other than an order described in clauses (a) and (b) above, an amount equal to 10 per cent of the balance amount of disputed tax,
d) in case of an appeal against any other order, an amount as directed by the Tribunal.
Provided that the amount required to be deposited under clause (b) or, as the case may be, clause (c) shall not exceed rupees fifteen crores."
So far as present appeal is concerned, provisions of [SECTION] are found attracted, which refer to deposit of an amount equal to 10% of balance amount of disputed tax along with appeal presented before Tribunal. It is not disputed that the said amended provision came into 10 stxa2.18 effect from 15/4/2017. It is also not disputed that review order passed by respondent no.4 was challenged by initiating proceedings on 13/4/2017 itself and that the amended provision has no retrospective effect.
13) Facts in the case of Messers Hoosein Kasam Dada (India) Ltd., referred supra and relied by appellant, are identical as would reveal that during continuation of the assessment proceedings, there was an amendment to [SECTION] of the [ACT]. Being aggrieved by the order of assessment, the assessee on 10/5/1950 preferred an appeal to the [ENTITY], under [SECTION], [ACT] (hereinafter referred to as "the Act"). The appeal not having been accompanied by any proof of the payment of the tax in respect of which the appeal had been preferred, the authorities, after giving the assessee several adjournments, declined to admit the appeal. The assessee moved the Board of Revenue, Madhya Pradesh by a revision application against the order of the Sales Tax Commissioner contending that his appeal was not governed by the proviso to [SECTION] of the Act as amended on 25/11/1949 by the [ACT], but was governed by the proviso to [SECTION] of the Act as it stood when the assessment proceedings were started, i.e. before the said amendment. The Board of Revenue took the view that as the order of assessment was made after the amendment of the [SECTION] and the appeal was filed thereafter, such appeal must be governed by the provisions of law as it existed at the time the appeal was actually filed and that the law as it existed before the filing of the appeal could not apply to the case.
The assessee thereupon moved the High Court of Madhya Pradesh under [SECTION] and [SECTION] of the [ACT] praying, amongst other things, for a writ of mandamus or an appropriate order directing the Sales Tax Commissioner to admit and hear the appeal without demanding payment of the amount of Sales Tax assessed by the Assistant Commissioner of Sales Tax. The High Court dismissed the application on 2/8/1951. The assessee applied to the High Court for leave to appeal to this Court, which was also dismissed by the High Court on 14/3/1952. The assessee thereupon applied to Supreme Court for special leave to appeal on 12/5/1952. The Supreme Court granted special leave to appeal, but such leave was limited to the question of the effect of the amendment to [SECTION] of the Act on the petitioner's appeal to the [ENTITY] and took the view that the other questions sought to be raised by the assessee would have to be decided by the Sales Tax Commissioner in case the appeal succeeded, as the Hon'ble Supreme Court in that appeal was concerned only with the limited question of effect of the amendment to [SECTION] of the Act.
[SECTION] of the Act was originally expressed in the 12 stxa2.18 following terms :
"22(1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order :
Provided that no appeal against an order of assessment, with or without penalty, shall be entertained by the said authority unless it is satisfied that such amount of tax or penalty or both as the appellant may admit to be due from him, has been paid."
The relevant portion of [SECTION] as amendment runs as follows :
"[SECTION] - Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order :
Provided that no appeal against an order of assessment, with or without penalty shall be admitted by the said authority unless such appeal is accompanied by a satisfactory proof of the payment of the tax, with penalty, if any, in respect of which the appeal has been preferred."
It is clear from the language used in the proviso to [SECTION] as it stood prior to the amendment that an aggrieved assessee had only to pay such amount of tax as he might admit to be due from him, whereas under the proviso to [SECTION] as amended the appeal has to be accompanied by satisfactory proof of payment of the tax in respect of which the appeal had been preferred. The contentions of the assessee was that as the amendment has not been made retrospective, its right of appeal under the original [SECTION] remains unaffected and that 13 stxa2.18 accordingly as it does not admit anything to be due it was not liable to deposit any sum along with its appeal and the Commissioner was bound to admit its appeal and had no jurisdiction or power to reject it on the ground that it had not been accompanied by any proof of payment of the tax assessed against the appellant as required under the amended proviso and the Board of Revenue and the High Court were in error in not directing the Commissioner to admit the appeal.
14) In the background of above facts, Hon'ble Apex Court, after considering various judgments, took a view that pre-existing right of appeal is not destroyed by the amendment, if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turns, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre-existing right of appeal, that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right. It is further observed that the finding of the appellate Authority that it has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to [SECTION] of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre-existing 14 stxa2.18 right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the Authority has to be exercised under the old law, which so continues to exist. The Hon'ble Apex Court also observed that -
"whenever there is a proposition by one party and an opposition to that proposition by another, a `lis' arises. It may be conceded, though not deciding it, that when the assessee files his return a `lis' may not immediately arise, for under [SECTION], the Authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State. The circumstance that the authority who raises the dispute is himself the judge can make no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State. It will appear from the dates given above that in this case the `lis' in the sense explained above arose before the date of amendment of the Section. Further, even if the `lis' is to be taken as arising only on the date of assessment, there was a possibility of such a `lis' arising as soon as proceedings started with the filing of the return or at any rate, when the authority called for evidence and started the hearing and the right of appeal must be taken to have been in existence even at those dates. For the purposes of the accrual of the right of appeal, the critical and relevant date is the date of initiation of the proceedings and not the decision itself."
The Hon'ble Apex Court in the above-said set of circumstances thus observed that for the purpose of accrual of right of appeal, the relevant date is of initiation of proceedings and not the decision.
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15) In the appeal in hand, admittedly review proceedings in respect of assessment order passed on 30/10/2014 for the financial year 2010-11 were initiated on 13/4/2017, which came to be decided on 27/7/2017 while the amended provisions of [SECTION] of the Act of 2002 came into force with effect from 15/4/2017. In that view of the matter and on relying on the law laid down as above, we find that relevant date to hold applicability of amended provisions or otherwise shall be the date on which proceedings were initiated and not the date of decision.
16) In the case of [PRECEDENT], once again issue of right of appeal came to be considered by the Hon'ble Apex Court wherein apart from the case of Messrs Hoosein Kasam Dada (India) Ltd., cited supra, various other judgments are considered and following principles are laid down :
(i) The legal pursuit of a remedy, suit, appeal and second appeal are really, but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding.
(ii) The right of appeal is not a mere matter of procedure, but is a substantive right.
(iii) The institution of the suit carries with it the implication that all rights of appeal, then in force are preserved, to the parties thereto till the rest of the career of the suit.
(iv) The right of appeal is a vested right and such a right to enter
16 stxa2.18 the superior Court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of filing of the appeal.
(v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise."
In view of above stated legal pronouncements and as appellant has admittedly filed his return sometime in the year 2011, he is having right of appeal, which does not speak of pre-deposit of 10% of the disputed tax.
17) Similar issue is once again considered by the Apex Court in the case of [PRECEDENT] wherein on considering effect of amendment on right to appeal, it is held in para 2 of its judgment that the amendment made by the State of Karnataka shall be prospective in nature from the date of its coming into force.
18) As against this, having considered submissions made for respondents and the law laid down in the case of [PRECEDENT] (supra) decided along with bunch of petitions, facts therein are distinguishable as against the facts involved in the appeal in hand, as challenge in that case was to [SECTION] of the [ACT], which is reproduced 17 stxa2.18 below for the purpose of convenience as it stood prior to amendment, i.e. prior to 6/8/2014 :
"35F Deposit, pending appeal, of duty demanded or penalty levied :
Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with adjudicating authority the duty demanded or the penalty levied :
Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue.
Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filing.
Explanation : For the purposes of this Section, duty demanded shall include :
(i) amount determined under [SECTION];
(ii) amount of erroneous Cenvat credit taken;
(iii) amount payable under [SECTION] of [ACT];
(iv) amount payable under [SECTION] of [ACT] or [ACT] or [ACT];
(v) interest payable under the provisions of this Act or the Rules made thereunder."
After amendment, [SECTION], which came into effect is as under :
18 stxa2.18 "35F Deposit of certain percentage of duty demanded or penalty imposed before filing appeal :
The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal :
(i) under [SECTION], unless the appellant has deposited seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an Officer of Central Excise lower in rank than the Principal Commissioner of Central Excise or Commissioner of Central Excise;
(ii) against the decision or order referred to in [SECTION] of [SECTION]B, unless the appellant has deposited seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against;
(iii) against the decision or order referred to in clause (b) of [SECTION]B, unless the appellant has deposited ten per cent of the duty in case where duty or duty and penalty are in dispute or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against;
Provided that the amount required to be deposited under this Section shall not exceed rupees ten crores.
Provided further that the provisions of this Section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the [ACT].
Explanation - For the purposes of this Section "duty demanded" shall include :
(i) amount determined under [SECTION];
(ii) amount of erroneous Cenvat credit taken;
(iii) amount payable under [SECTION] of the [ACT] or the [ACT] or the [ACT]."
19 stxa2.18 Thus, it is found that before [SECTION] of the [ACT] was amended, power was vested with the Authority to dispense with or waive the deposit subject to conditions as may be deemed fit to impose so as to safeguard the interest of revenue. However, after amendment to [SECTION], no Authority or Tribunal has a power to waive or dispense with such deposit. As such, we find this to be material difference in the cases relied by appellant than the law relied by the respondents.
19) The amended provisions of [SECTION] of the Act of 2002, which require consideration in the present appeal, are already reproduced above. [SECTION] of the Act of 2002 refers to appeals. Sub-section 1(c) thereof contemplates that appeal from every order, not being an order mentioned in sub-section (2) of this Section and [SECTION] passed under this Act or rules or notifications, shall lie, if the order is made by a Joint Commissioner or Additional Commissioner, Advance Ruling Authority or the Commissioner, to the Tribunal. As such, under [SECTION] the appellate Authority or the Tribunal, as the case may be, may, while admitting the appeal, pending the disposal of the appeal, stay the order appealed against in full or part, subject to such conditions or restrictions as it may deem necessary including a direction for depositing of a part or whole of the disputed amount by the appellant. Thus, for filing appeal, there was no requirement to deposit any amount under sub-
20 stxa2.18 section (6) of [SECTION] as it then stood and for grant of stay to disputed amount, orders were required to be passed by the Tribunal, while according to amended provisions of [SECTION], no appeal shall be filed before the Tribunal against an order, which is passed on or after the commencement of the [ACT], unless it is accompanied by the proof of payment of an aggregate of following amounts as applicable -
(c) in case of an appeal against an order, other than an order, described in clauses (a) and (b) above, an amount equal to 10 per cent of the balance amount of disputed tax.
As such, we find that before amendment, there was no requirement to deposit any amount at the time of filing appeal, but it is only if stay was to be granted, some amount was to be deposited as per orders of the appellate Authority or as the case may be. Thus, to answer the first question formulated as aforesaid, we are required to consider if the amended provisions of [SECTION] of the Act of 2002 directing deposit of 10% of the disputed tax as a pre-condition for filing of appeal before Tribunal are applicable to appellant.
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20) Perused of impugned judgment reveals that the order which was challenged before the Tribunal is dated 27/7/2017, i.e. after amended provision came into effect on 15/4/2017, thus the Tribunal held that appellant was statutorily bound to deposit an amount equal to 10 per cent of the balance amount of disputed tax as a pre-condition for admission of appeal. However, the Tribunal has failed to consider the fact of initiation of review proceedings on 13/4/2017 as stated above when admittedly amended provisions were not in force. Having considered the facts and for the reasons aforesaid, it is clear that amended [SECTION] of the Act of 2002 requiring appellant to deposit 10% of the disputed tax is not applicable to appellant since lis started in the year 2011 while effect of amendment is prospective with effect from 15/4/2017. Accordingly, question no.1 framed as aforesaid is replied holding that the Tribunal has committed an error in dismissing the appeal as not maintainable for non payment of amount aforesaid, i.e. 10% of the amount assessed.
21) The second question of law as formulated above is whether recovery proceedings initiated by respondent no.5 during the pendency of appeal are legal or otherwise more particularly in view of pronouncement in the case of [PRECEDENT]. Learned Senior Counsel for appellant by referring to the guidelines issued in the above-said judgment submitted 22 stxa2.18 that initiation of recovery proceedings during pendency of appeal is directly in violation of guidelines as aforesaid. In the cited judgment, it is observed that -
"administrative directions for fulfilling recovery targets for the collection of revenue should not be at the expense of foreclosing remedies, which are available to assessees for challenging the correctness of a demand. The sanctity of the rule of law must be preserved. The remedies which are legitimately open in law to an assessee to challenge a demand cannot be allowed to be foreclosed by a hasty recourse to coercive powers.
These are, we may say so with respect, sage observations, which must be borne in mind by the assessing authorities. Consistent with the parameters which were laid down by the Division Bench in KEC International and the observations in the judgment in Coca Cola India, we direct that the following guidelines should be borne in mind for effecting recovery :
1) No recovery of tax should be made pending -
a) Expiry of time limit for filing an appeal.
b) Disposal of a stay application, if any, moved by the assessee and for a reasonable period thereafter to enable the assessee to move a higher forum, if so advised. Coercive steps may, however, be adopted where the authority has reason to believe that the assessee may defeat the demand, in which case brief reasons may be indicated.
2) The stay application, if any, moved by the assessee should be disposed of after hearing the assessee and bearing in mind the guidelines of KEC International.
3) If the assessing Officer has taken a view contrary to what has been held in the preceding years without there being a material
23 stxa2.18 change in facts or law, that is a relevant consideration in deciding the application for stay;
4) When a bank account has been attached, before withdrawing the amount, reasonable prior notice should be furnished to the assessee to enable the assessee to make a representation or seek recourse to a remedy in law.
5) In exercising the powers of stay, the Income Tax Officer should not act as a mere tax gatherer, but as a quasi judicial authority vested with the public duty of protecting the interest of Revenue while at the same time, balancing the need to mitigate hardship to the assessee. Though the assessing Officer has made an assessment, he must objectively decide the application for stay considering that an appeal lies against his order, the matter must be considered from all its facets, balancing the interest of the assessee with the protection of the Revenue."
22) In view of submissions of learned Senior Counsel for appellant as referred above and the guidelines, it was mandatory for the respondents not to take coercive steps till the time prescribed for filing appeal is over, which, according to the provisions of [SECTION] of the Act of 2002, is 180 days from the date on which the order appealed against is received by the assessee. It is not a disputed fact that the order passed by the Tribunal on 22/2/2018 was received by appellant on 17/3/2018 and, therefore, in view of guidelines as aforesaid, respondents should take steps for withdrawal of coercive steps initiated by issuing notice to appellant for attachment of Bank accounts, etc. pending appeal as even according to [SECTION] of the Act of 2002, no action can be taken against assessee till the date prescribed for filing of appeal, if he has intimated to the Commissioner by filing [SECTION] that he is preferring an appeal against the order. In the case in hand, though appellant has submitted [SECTION] along with his application for withdrawal of recovery proceedings before respondent nos.4 and 5, no steps are taken to act upon his request. On the contrary, it is the case of appellant that he is orally informed that no steps for withdrawal of recovery proceedings shall be taken. In view of facts as aforesaid, we reply second question also in favour of appellant, thereby holding that before expiry of period prescribed to prefer an appeal, respondent nos.4 and 5 were not competent to initiate recovery proceedings against appellant or for enforcing notice issued to the appellant pending appeal.
23) In view of above stated facts and for the reasons stated above, appeal is liable to be allowed as per following order :
(i) The appeal is allowed in terms of prayer clause (A) thereof.
(ii) The impugned order dated 22/2/2018 passed by the Tribunal is set aside.
(iii) The case is remanded back to the Tribunal. The learned Tribunal shall hear the appeal against the order passed by respondent no.4 afresh by affording opportunity of hearing to parties, who shall raise all relevant questions of law and facts before Tribunal. The learned Tribunal to decide the appeal expeditiously.
25 stxa2.18 No order as to costs.
[CASE NUMBER] stands disposed of accordingly.
JUDGE JUDGE khj