1991 (1) TMI 154 - HC - Central Excise

Summary

Issues:
1. Challenge of excise duty demand by the petitioner.
2. Stay of recovery proceedings pending the hearing of the case by the High Court under Section 35K.
3. Interpretation of Section 35N of the Central Excises & Salt Act, 1944 regarding the payment of sums due to the Government.
4. Jurisdiction of the Courts under Section 35G of the Central Excises & Salt Act, 1944.
5. Application for stay of recovery proceedings before the Tribunal.
6. Prematurity of the application for stay of recovery proceedings.
7. Liberty granted to the petitioner to approach the Tribunal for stay of recovery proceedings.
8. Directions for the petitioner to raise all points before the Tribunal in the stay application.
9. Disposal of the writ application due to prematurity.
10. Recording that the allegations in the writ petition are not admitted by the respondents.

Detailed Analysis:
1. The petitioner challenged a demand for excise duty by the respondent No. 1, which was upheld by the Collector and the Customs, Excise & Gold (Control) Appellate Tribunal. The petitioner then filed a reference application under Section 35G of the Central Excises & Salt Act, 1944 before the High Court, questioning the liability to pay excise duty on goods manufactured. The questions framed in the reference relate to the excise duty liability.

2. The petitioner sought a stay of recovery proceedings amounting to Rs. 1,03,715.82 pending the hearing of the case by the High Court under Section 35K. However, the Excise authorities were seeking to recover the dues despite the reference made to the High Court.

3. Section 35N of the Central Excises & Salt Act, 1944 states that sums due to the Government as a result of an order of an Appellate Tribunal shall be payable, even if a reference has been made to the High Court. The section is compared to Section 265 of the Income Tax Act, 1961, indicating that general principles governing the grant of stay of recovery proceedings should be similar.

4. Courts exercising jurisdiction under Section 35G of the Central Excises & Salt Act, 1944 have an advisory role, similar to references under the Income Tax Act. By directing the Tribunal to state a case, the matter remains pending before the Tribunal.

5. The Supreme Court precedent establishes that the appellate jurisdiction is retained by the Tribunal until the High Court answers the questions referred. The power to grant stay of recovery proceedings is incidental to the appellate jurisdiction and can be exercised by the Tribunal pending the reference before the High Court.

6. The petitioner did not approach the Tribunal for a stay of the recovery proceedings, making the current application premature.

7. The Court deemed the application premature and granted the petitioner liberty to approach the Tribunal for a stay of the recovery proceedings.

8. The petitioner was directed to raise all points from the writ petition before the Tribunal in the stay application, which the Tribunal would hear and decide in accordance with the law.

9. The writ application was disposed of due to prematurity, with a record that the respondents did not admit the allegations in the writ petition.

10. All parties were instructed to act on a signed copy of the operative part of the judgment with the usual undertaking.