TMI Blog1994 (2) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... pal administrative officer of the Court, that officer to file a suit against the bank for the amount due upon the bank guarantee. The amount of the disputed tax or duty that is secured by a bank guarantee cannot, therefore, be held to be paid to the Revenue. There is no question of its refund, and Section 11B is not attracted. The bank guarantees given by the appellants were not properly the subject matter of the writ petition before the High Court and the High Court was in error in directing the appellants to renew the same. We reiterate our direction to the 1st and 2nd respondents forthwith to re-pay to the State Bank of Patiala, Overseas Branch, Millar Ganj, Ludhiana, the amount of ₹ 1,18,00,000/- collected upon the bank guarant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees deposited from time to time under Supreme Court of India's interim order during the pendency of the above-referred appeals." Since, in their view, the refund application was not being dealt with, the appellants filed a writ petition on 27th August, 1993 before the High Court of Punjab and Haryana seeking its expeditious disposal. On 18th October, 1993 the High Court issued a direction to the excise authorities to dispose of the claim of the appellants for "refund/release of bank guarantees" within one month. The High Court directed the appellants to have the bank guarantees extended till the final disposal of the claim for refund. Against this order of the High Court the special leave petition afore-mentioned was filed, on which leave t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such form as may be prescribed and the application shall be accompanied by such documentary or other evidence as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from or paid by him and the incidence of such duty had not been passed on by him to any other person." 6. Mr. A.K. Ganguli, learned counsel for respondents 1 and 2, submitted that the provisions of Section 11B were attracted to the bank guarantees in question; that the bank quarantees, furnished under the interim orders of this Court as a condition of stay of recovery of excise duty from the appellants, should be deemed to be equivalent to money deposited in Court; that, therefore, it was for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were attracted and the assessee was not entitled to take advantage of the order by which the deposit had been made unless it succeeded in showing to the statutory authorities that it had not passed on the whole or any part of the duty in question to others. This Court said that if the contentions advanced by counsel for the assessee were accepted it would defeat the amended provisions of the Act. It would then be open to assessees to obtain orders from the courts, as had happened in the case before it, and, instead of paying the assessed amount of duty to the authorities, deposit it in court and raise the plea that what it had deposited in court was not duty and the assessee was entitled to get a refund, either directly from the court or, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity. In the event that the Revenue fails in the proceedings before the Court the question of payment of the tax or duty, the amount of which is covered by the bank guarantee, does not arise and, ordinarily, the Court, at the conclusion of its order, directs that the bank guarantee shall stand discharged. Where the Revenue succeeds the amount of the tax or duty becomes payable by the assessee to the Revenue and it is open to the Revenue to invoke the bank guarantee and demand payment thereon. The bank guarantee is security for the Revenue, that in the event the Revenue succeeds its dues will be recoverable, being backed by the guarantee of a bank. In the event, however, unlikely, of the bank refusing to honour its guarantee it would be nece ..... X X X X Extracts X X X X X X X X Extracts X X X X
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