Bank guarantee expiry did not justify vacating stay of recovery where the Department delayed action and lacked bona fides.

Where an appellant was bound by Tribunal and High Court directions to keep a bank guarantee alive pending appeal, a Departmental request to vacate the stay of recovery was rejected after the record showed the guarantee had expired earlier and no effective steps had been taken despite the alleged default. The application was treated as lacking bona fides, and the stay of recovery continued unchanged.

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Issues: Whether the Department's application to vacate the stay of recovery on the ground that the bank guarantee had expired deserved to be allowed.

Analysis: The appellant was under orders of both the Tribunal and the High Court to keep the bank guarantee alive till final disposal of the appeal. The record showed that the guarantee had expired long earlier, yet no effective action had been taken by the Department before the High Court despite the alleged default. In these circumstances, the application was found to lack bona fides.

Conclusion: The application was rejected and the stay of recovery remained undisturbed.

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