2007 (6) TMI 220 - HC - Customs

Precedent - Recovery of dues - Held that - As per Board s Circular No.788/21/2004 Cx dated 25-5-2004 coercive measures should not be initiated during the period prescribed in the said circular. It is observed that some officers are enforcing the Bank Guarantees within the appeal period.

Summary

Issues:
Violation of law laid down by the High Court regarding encashment of bank guarantee during the appeal period.

Analysis:
The petitioner filed a petition under Article 226 of the Constitution of India, highlighting the Assistant Commissioner of Customs (Import) encashing a bank guarantee before the appeal period expiry, contrary to the law laid down by the High Court in previous judgments. The Court directed the respondents to deposit the amount and show cause why contempt of court action should not be initiated for wilful disobedience. The legal position emphasizing the binding nature of High Court judgments on authorities and tribunals was reiterated, stating that such disobedience undermines the dignity of the court and impairs its constitutional authority.

The Court referred to various Supreme Court and High Court judgments emphasizing the obligation of authorities to follow the law laid down by the High Court, whether in initiating proceedings or deciding on rights involved. Disobedience to previous decisions of the High Court was deemed to create confusion in the administration of law, undermine respect for the court's decisions, and impair its constitutional authority. The Court highlighted that such conduct falls within the purview of contempt of court.

The respondents deposited the amount and tendered an unconditional apology, along with a standing order emphasizing compliance with the High Court's directions. The Court, considering the apology, assurance of future compliance, and withdrawal of the deposited amount by the petitioner, discharged the show cause notice issued to the Assistant Commissioner of Customs (Import). As the cause of action for the petition ceased to exist, it was disposed of with no order as to costs.

In conclusion, the judgment addressed the violation of the law laid down by the High Court regarding the encashment of a bank guarantee during the appeal period. It emphasized the binding nature of High Court judgments on authorities and tribunals, highlighting the importance of compliance to avoid undermining the court's authority and creating confusion in the administration of law.