PRABIR CHANDRA GHOSE Vs. UNION OF INDIA

JUDGEMENT

(1.) This case arises out of a show cause notice dated 9/11/1979 requiring the petitioner M/s. Sadhana Ausadhalaya to show cause why a payment of Rs. 70,422.22 p. should not be paid by the petitioner under the Notification No. 71/78 dated 1/3/1978 as issued under the Central Excise Act. The petitioner replied to the show cause notice, The Assistant Collector of Central Excise, however, held by an order dated 2/6/1980 that the petitioner was liable to pay duty of Rs. 79,496.82 p. in terms of the aforesaid show cause notice. The petitioner preferred an appeal to the Appellate Collector who by an order dated 31/7/1981 held that:

(2.) In any event, the Supreme Court has not granted any stay. Mere filing of an appeal cannot operate as stay of the proceeding. Mr. Roy Choudhury on behalf of the Department has contended that so far as the assessees are concerned they have to apply for stay of the realisation of tax demanded from them before the Appellate Authority. But so far as the Government is concerned there is no provision for filing application for stay. The intention of the Legislature was that no refund should be granted until an appeal was disposed of finally by the highest court in the country,

(3.) I am unable to uphold this contention. It is well settled that an order does not cease to be operative merely because an appeal has been preferred against that order. Until the Appellate Court stays the operation of the order, the order must be implemented. Otherwise, the Government can nullify an order by merely preferring an appeal. In my view, as a proposition of law the contention of the respondents cannot be accepted. Moreover, the conduct of the respondents in this case is also deplorable. For five years they have not informed the petitioner as to the date of filing of the Special Leave Petition, nor have they informed about the date of making the application for stay for realisation of tax. The stand taken by the Department in this court is also self contradictory. On the one hand they have preferred an application for stay of realisation of tax before the Supreme Court which is pending for the last five years and on the other, they are contending that it is not necessary to obtain an order staying the operation of the orders till disposal of the appeal in the Supreme Court. I am of the view that there is no reason why general rule should not apply to a case so far as the appeal under the Central Excise Act. The operation of an order does not come to stop automatically by mere preferment of an appeal against that order.