Reasonable-time recovery and fresh excise registration cannot be denied to bona fide transferees absent a statutory bar.

Recovery of excise dues against subsequent purchasers was quashed because, even where no limitation period is prescribed, recovery powers must be exercised within a reasonable time; a delay of about 10 years was treated as unreasonable and hit by laches. Refusal to grant fresh central excise registration to a bona fide subsequent lessee was also set aside because registration is person-specific, and the mere subsistence of the earlier registrant's certificate, without surrender or cancellation, cannot by itself justify denial where no statutory embargo exists. The petition therefore succeeded on both challenges, with relief granted to the transferee and lessee.

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Issues: (i) Whether recovery proceedings against the subsequent purchasers for the excise dues of the erstwhile owner, initiated nearly 10 years after the auction purchase, could be sustained. (ii) Whether refusal to grant fresh central excise registration to the subsequent lessee merely because the earlier registrant had not surrendered or de-registered its registration was lawful.

Issue (i): Whether recovery proceedings against the subsequent purchasers for the excise dues of the erstwhile owner, initiated nearly 10 years after the auction purchase, could be sustained.

Analysis: Where a statute does not prescribe a period of limitation for exercise of recovery powers, such power must still be exercised within a reasonable time. The dues against the erstwhile owner had crystallised years before the impugned action, yet proceedings were initiated against the subsequent purchasers after an inordinate delay of about 10 years. The Court applied the principle that public authorities cannot sleep over their rights and later seek recovery from a third-party purchaser after equities have been created. The Court also followed the earlier view that delayed recovery against an auction purchaser is not permissible when the action is not taken within a reasonable period.

Conclusion: The recovery proceedings against the subsequent purchasers were quashed as barred by unreasonable delay and laches, and the relief was held in favour of the petitioners.

Issue (ii): Whether refusal to grant fresh central excise registration to the subsequent lessee merely because the earlier registrant had not surrendered or de-registered its registration was lawful.

Analysis: Registration under the excise law is person-centric, and the absence of surrender or cancellation of the earlier registrant's certificate cannot by itself defeat a bona fide transferee's request for registration in respect of the same premises. The Court accepted the principle that neither the registration provision nor the related rule or notification creates a power to refuse registration on the sole ground that an earlier registration subsists. The Court followed the line of authority holding that such refusal is unjustified where the applicant is a subsequent transferee or lessee and there is no statutory embargo.

Conclusion: The refusal to grant registration was quashed and the authority was directed to issue the registration certificate in favour of the petitioner.

Final Conclusion: The petition succeeded on both substantive challenges: the recovery action against the subsequent purchasers was set aside, and the denial of fresh excise registration was invalidated.

Ratio Decidendi: In the absence of a prescribed limitation, recovery powers must be exercised within a reasonable time, and the mere subsistence of an earlier excise registration cannot be used to deny a fresh registration to a bona fide subsequent transferee or lessee.

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