Coercive recovery cannot begin while stay applications remain pending for reasons not attributable to the assessee.

A Rajasthan HC ruling on Circular No. 967/01/2013-CX limited recovery action where assessees had filed appeals with stay applications and the applications remained pending for reasons not attributable to them. The Court applied its earlier binding view that the circular was non est to that extent, and that coercive recovery should not be initiated before disposal of the stay request. It also indicated that the appellate and interim applications should be heard expeditiously. The challenge therefore succeeded insofar as the circular authorised recovery in such pending-stay cases, and enforcement against those assessees was barred.

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Issues: Whether Circular No. 967/01/2013-CX dated 01.01.2013, insofar as it required initiation of recovery proceedings where appeals with stay applications had been filed but the stay applications remained pending for reasons not attributable to the assessees, could be sustained.

Analysis: The Court followed its earlier binding view that the impugned circular was non est to the extent it mandated recovery in cases where no stay had been granted and the delay in disposal of the stay applications was not attributable to the assessees. It was noted that, in such situations, coercive recovery ought not to be initiated and the appellate and interim applications should be taken up expeditiously.

Conclusion: The challenge to the circular succeeded to the extent indicated, and recovery action under the circular could not be enforced against such assessees.

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