CA Sandeep Kanoi
Preface :- Recently Delhi High Court has held in the case of CIT Vs. s Maruti Suzuki (India) Limited (WP (Civil) no. 5003/2013 dated : 21.02.2014 that ITAT has no power to grant stay beyond 365 days in light of third proviso to Sec. 254(2A) inserted by Finance Act, 2008. High Court further held that Courts must respect “legislative mandate.
Contention of the Revenue :-
The contention of the petitioner/Revenue is that language of Section 254(2A) mandates that no stay order can exceed total period of 365 days and tribunal is foreclosed and barred from passing an order extending stay of demand beyond 365 days. The Statute is clear. The tribunal being a creation of the statute is bound by the said provision and cannot violate and negate the express letter of law. The violation has to be checked and the legislation respected.
Contention of the Assessee :-
On the other hand, learned counsel for the respondents submit that the said section is not clear and the Supreme Court had examined paramateria provisions i.e. Section 35C(2A) of the Central Excise Act, 1944 (CE Act, for short), introduced w.e.f. 11 th May, 2002 and had approved the ratio and view taken by the larger Bench of the tribunal constituted under the CE Act in IPCL vs. Commissioner of Central Excise, Vadodra 2004 (169) E.L.T. 267 (Tri. –LB). Stay orders can be extended if the delay is not attributable to the assessee and the assessee is not to be blamed.
Held by High Court
(i) In view of the third proviso to Section 254(2A) of the Act substituted by Finance Act, 2008 with effect from 1st October, 2008, tribunal cannot extend stay beyond the period of 365 days from the date of first order of stay.
(ii) In case default and delay is due to lapse on the part of the Revenue, the tribunal is at liberty to conclude hearing and decide the appeal, if there is likelihood that the third proviso to Section 254 (2A) would come into operation.
(iii) Third proviso to Section 254 (2A) does not bar or prohibit the Revenue or departmental representative from making a statement that they would not take coercive steps to recover the impugned demand and on such statement being made, it will be open to the tribunal to adjourn the matter at the request of the Revenue.
(iv) An assessee can file a writ petition in the High Court pleading and asking for stay and the High Court has power and jurisdiction to grant stay and issue directions to the tribunal as may be required. Section 254(2A) does not prohibit/bar the High Court from issuing appropriate directions, including granting stay of recovery.