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K.V.N. Prasad and ors. Vs. the Central Board of Excise and Customs and ors. - Court Judgment

LegalCrystal Citation
SubjectExcise;Civil
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petition No. 279 of 1974
Judge
Reported in1978(2)ELT697(AP)
ActsCentral Excise Act, 1944 - Sections 35; ;Revenue Recovery Act - Sections 8; Income Tax Act, 1961 - Sections 254; Code of Civil Procedure (CPC) - Order 41, Rule 5; Tribunal Rules, 1963 - Rule 5
AppellantK.V.N. Prasad and ors.
RespondentThe Central Board of Excise and Customs and ors.
DispositionPetition dismissed
Excerpt:
- - since section 35 of the act, does not say like order 41, rule 5, c. 13. in the counter affidavit filed by the excise authorities, it is not clearly stated that the appellate authority has dismissed the stay petition and communicated its order to the petitioners. it is not in dispute that even if the petitioners have failed to pay the duty still the appeal should be disposed of on merits by the appellate authority under section 35 of the act......any difference with regard to the powers of the appellate authority under section 35 of the act to grant stay; for power to grant stay is incidental or ancillary to the power to decide an appeal. therefore, even though section 35 of the act, does not expressly confer the power to grant stay, it does not mean that the appellate authority has no power either to grant or refuse to grant stay. in this connection the decision of the supreme court in income-tax officer v. mohammed kunhi (1) 71 income tax reports-815 referred to by the learned counsel for the respondents, is relevant. in that case the question for consideration before the supreme court was whether under section 254 of the income tax act, 1961 the appellate tribunal had power to grant stay of recovery proceedings pending the.....
Judgment:

Gangadhara Rao J.

1. In this Writ petition a contention is raised that when an appeal is filed under Section 35 of the Central Excise and Salt Act, 1944 (hereinafter called the Act) against an order levying duty, there is no need to file a stay petition and the presentation and entertainment of the appeal itself operates stay of collection of duty. The question arises this way. Shri K.V.N. Prasad the first petitioner, is the Managing partner of the firm, M/S. Andhra Leaf Tobacco Development Company at Anantavaram, the second petitioner herein. The second petitioner firm was trading in tobacco from 1968 till the year 1972. The Collector of Central Excise, Guntur levied a duty of Rs. 1,17,476/- by his order dated 2-11-1972 on the tobacco goads of the second petitioner-firm. Aggrieved by the said order, the petitioners preferred an appeal to the Central Board of Excise and Customs, New Delhi. under Section 35 of the Act. They have also filed a petition to stay the order of the Collector of Central Excise, Ountur and also to restrain him from taking any coercive steps for realisation of the duty levied. The petitioners say that no order on the stay petition communicated to them. Thereafter. the Collector, Central Excise seems to have asked the District Collector, Ongole, to recover the duty by taking steps under the Revenue Recovery Act.-The Tehsildar, Addanki, served the distraint notice dated 24-11-1973 under Section 8 of the Revenue Recovery Act, upon the first petitioner. The questioning the validity for that notice the petitioner have filed this writ petition.

2. Sri A. Banumantha Rao, the learned counsel for the petitioners, has argued that when once an appeal is filed under Section 35 of the Act. it also operates as stay and there is no need to file a separate stay petition. To substantiate his contention he relies upon the difference in the wording of Section 35 of the Act and order 41 Rule 5 of the Code of Civil Procedure.

3. Order 41, Rule 5, C.P.C., says that an appeal shall not operate as a stay of proceeding under a decree or order appealed from, except so far as the appellate court may order, nor shall execution of a decree be stayed by reason of an appeal having been preferred from the decree; but the Appellate Court may for sufficient cause order stay of execution of such decree. Section 35 of the Act, says that any person deeming himself aggrieved by any decision or order passed by a Central Excise Officer under this Act or the rules made thereunder may, within three months from the date of such decision or order, appeal therefrom to the Central Board of Revenue, or in such cases as the Central Govt. directs, to any Central Excise Officer not inferior in rank to an Assistant Collector of Central Excise and empowered in that behalf by Central Government. Such authority or officer may thereupon make such further enquiry and pass such order as he thinks fit, confirming, altering or annulling the decision or order appealed against.

4. It is contended that under Section 35 of the Act, the Appellate Authority has no power to pass any order of stay and its power is only to pass final order. Since Section 35 of the Act, does not say like order 41, Rule 5, C.P.C., that an appeal shall not operate as a stav of decree appealed itself operates as stay of all proceedings.

5. I do not agree with this contention. The fact that Section 35 of the Act is not in terms similar as order 41, Rule 5, C.P.C., will not make any difference with regard to the powers of the Appellate Authority under Section 35 of the Act to grant stay; for power to grant stay is incidental or ancillary to the power to decide an appeal. Therefore, even though Section 35 of the Act, does not expressly confer the power to grant stay, it does not mean that the Appellate Authority has no power either to grant or refuse to grant stay. In this connection the decision of the Supreme Court in Income-Tax Officer v. Mohammed Kunhi (1) 71 Income Tax Reports-815 referred to by the learned counsel for the respondents, is relevant. In that case the question for consideration before the Supreme Court was whether under Section 254 of the Income Tax Act, 1961 the Appellate Tribunal had power to grant stay of recovery proceedings pending the appeal. Section 254 of the Income Tax Act, to the extent it is relevant reads as follows:-

'The Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.'

The Supreme Court held :

''There can be no manner of doubt that by the provisions of the Act or the income-Tax Appellate Tribunal Rules, 1963, powers have not been expressly conferred upon the Appellate Tribunal to stay proceedings relating to the recovery of penalty or tax due from an assessee.'

6. It is a firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective (Sutherlands Statutory Construction, third edition, articles 5401 to 5402). The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective. In Domat's Civil Law (Caushing's edition), Volume 1, at page 88, it has been stated.-

7. 'It is the duty of the Judges to apply the laws not only to what appears to be regulated by their express dispositions, but to all the cases where a just application of them may be made, and which appears to be comprehended either within the consequences that may be gathered from it.'

8. Maxwell on Interpretation of Statutes, eleventh edition, contains a statement at page 350 that 'where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution'.

9. In our opinion the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction.

10. In view of this authoritative pronouncement it has to be held that the Appellate Authority under Section 35 of the Act has also the implied power to grant stay. So, the contention that there is no need for the petitioners to file a stay petition and filing of the appeal itself operates as stay of all recovery proceedings, cannot be accepted.

11. Apart from that, even on a plain reading of Section 35 of the Act, I do not see how that argument is tenable. That section simply says that an appeal can be filed by the aggrieved party. It does not follow therefrom that all proceedings in execution are stayed. Deciding an appeal is one thing; granting stay is another. Power to decide an appeal may imply a power to grant stay, but it does not mean that all proceedings are stayed. Even assuming for the sake of argument that Section 35 does not grant a power to stay, then it only means there is no stay ; it does not mean there is stay. So, I do not agree with the contention of the learned counsel for the petitioners.

12. It is also submitted by the learned counsel for the petitioners that Appellate Authority have not communicated any order on the stay petition filed by the petitioners; instead they have chosen to take steps under the Revenue Recovery Act, to recover the duty.

13. In the counter affidavit filed by the excise authorities, it is not clearly stated that the Appellate Authority has dismissed the stay petition and communicated its order to the petitioners. In case, they have not disposed of the stay petition, they should do so immediately and communicate the order to the petitioners. If they have already disposed it of, they should communicate the order to the petitioners. It is not in dispute that even if the petitioners have failed to pay the duty still the appeal should be disposed of on merits by the Appellate Authority under Section 35 of the Act.

14. In the result, this writ petition fails and is dismissed with costs. Advocates' fees Rs. 100/-


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