High Court demands independent findings, orders refund with interest, remands case for fresh hearing.

The High Court set aside the Collector's order and directed a refund with interest, emphasizing the Tribunal's need to form independent findings rather than relying solely on previous judgments. The Court remanded the matter for fresh hearing within three weeks, keeping all points open for further adjudication before the Tribunal and instructing it not to consider the case of B. Vijay Kumar & Co. in future proceedings. The issue of transferring the cross objection became irrelevant as the Special Bench had already decided it, with no stay order in place.

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Issues:
1. Setting aside the order of the Collector and directing refund with interest.
2. Transferring the cross objection to be decided by the Special Bench of the Tribunal.

Analysis:
1. The High Court considered whether the Tribunal was correct in law in setting aside the Collector's order dated 31st October, 1986, and directing a refund with interest. The Court noted that the only reason for setting aside the penalty imposed by the Collector was a judgment of the Supreme Court in the case of B. Vijay Kumar & Co. The Tribunal had relied on this judgment, which the High Court found to be legally flawed. The High Court held that the Tribunal should have arrived at its own findings without solely relying on the Supreme Court's decision, which was not intended to be a binding precedent. Therefore, the High Court set aside the judgment and order, remanding the matter for fresh hearing within three weeks.

2. The second issue raised was whether the Tribunal was right in transferring the cross objection to be decided by the Special Bench of the Tribunal. However, during the proceedings, it was revealed that the Special Bench had already decided the cross objection and a separate appeal filed by the department. As there was no stay order from the Court, the issue of transferring the cross objection became infructuous. Consequently, the High Court determined that no decision was required on this point. The High Court kept all points open for both parties to be adjudicated before the Tribunal and directed that the Tribunal should not consider the case of B. Vijay Kumar & Co. in its future proceedings.

In conclusion, the High Court's judgment addressed the issues of setting aside the Collector's order and transferring the cross objection. The Court emphasized the importance of the Tribunal forming its own findings rather than relying solely on previous judgments. The matter was remanded for fresh hearing, and all points were kept open for further adjudication before the Tribunal.

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