Adjudicating Authority shall not take any coercive action where matter was already moved in the Appellate Authority.

Case Details:

Issue- In the above case, petitioner was seeking quashing of order, whereby Deputy Commissioner, Central Goods and Service Tax, Pathankot, with respect to demand (service tax) confirmed by Assessment Order, in exercise of power conferred by section 87(c) of the Finance Act, 1994 has attached current account of the petitioner. The contention of the petitioner was that as per para 4.2 of the Customs Circular No. 984/08/2014-CX, dated 16-9-2014 issued by Central Board of Excise & Customs no coercive step can be initiated if appeal is filed along with pre-deposit of 7.5%, thus, recovery proceedings initiated by respondent are bad and contrary to Board Circular which was binding upon the Respondent.

Held- It was held that the contention of the respondent that petitioner must file appeal before Appellate Authority seems to be highly technical, petitioner has already filed an appeal against the assessment order whereby demand was created, and tax liability intended to be recovered stands stayed in view of Board Circular and judgment of Hon’ble Bombay High Court. As the liability to be recovered stands stayed, there seems no logic to file appeal against the recovery proceedings. The respondent-Department should have restrained itself from coercive recovery as soon as came to know of appeal with mandatory pre-deposit. Thus, contention of the respondent is not sustainable and accordingly rejected. therefore, present petition deserves to be allowed and accordingly allowed and the impugned order dated 23-3-2021 was set aside and the respondents were directed to permit the petitioner to operate its bank account.