THE SB COLLEGE STAFF CO-OPERATIVE SOCIETY LIMITED, NO. K 356, vs. THE COMMISSIONER OF INCOME TAX (APPEALS)
What did the High Court hold?
The High Court modified the judgment of the learned Single Judge. While the Single Judge had directed the expeditious disposal of the appeal by the appellate authority but did not grant a stay of recovery, the Division Bench found it incumbent upon the Single Judge to protect the appellant from recovery proceedings pending the appeal's disposal. Therefore, the High Court clarified that pending the disposal of the appeal by the appellate authority, the recovery proceedings against the appellant for the amounts confirmed by Ext.P1 assessment order shall be kept in abeyance. The rest of the directions in the impugned judgment were not interfered with. The ratio decidendi is that when an assessee approaches the High Court under Article 226 against an assessment order and has filed a statutory appeal and stay petition, the High Court should, at a minimum, protect the assessee from coercive recovery actions pending the disposal of the statutory appeal, if there is an apprehension of such action.
What were the facts?
The appellant, The SB College Staff Co-operative Society Limited, challenged an assessment order (Ext.P1) before the High Court of Kerala through a writ petition. The society had filed an appeal and a stay petition for the assessment year 2021-2022 against this order. The primary concern was the initiation of recovery steps by the respondents for the amounts confirmed by the assessment order, even before the appeal was considered. The learned Single Judge directed the respondents to dispose of the appeal expeditiously but did not grant a stay of recovery proceedings. The appellant is now before the High Court in a writ appeal seeking this limited relief.
What were the issues?
1. Whether the High Court, in its writ jurisdiction, should have granted a stay of recovery proceedings pending the disposal of the appeal by the statutory appellate authority, when the assessee had filed an appeal and a stay petition before that authority? (Question of law and fact, concerning the powers of the High Court under Article 226 of the Constitution of India and the principles of natural justice). Assessee's Contention: The appellant argued that recovery steps should be kept in abeyance pending the disposal of its appeal and stay petition before the appellate authority, as there was a genuine apprehension of coercive recovery measures before the appeal was heard. The appellant sought a stay of recovery proceedings as a limited relief. Revenue's Contention: The judgment does not record any specific arguments made by the revenue's standing counsel regarding the stay of recovery proceedings. The revenue was represented by Sri. Jose Joseph, SC.
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Cause title — parties, addresses and appearances
J U D G M E N T Dr. A.K.Jayasankaran Nambiar, J.
The petitioner in WP(C).No. 40809 of 2023 is the appellant herein aggrieved by the judgment dated 7.12.2023 in the Writ Petition. The brief facts necessary for disposal of this Writ Appeal are as follows:
The appellant had impugned Ext.P1 assessment order before this Court in the Writ Petition when confronted with recovery steps for recovery of the amounts confirmed against it by the assessment order. It was the case of the appellant that against Ext.P1 assessment order it has preferred Ext.P3 appeal and Ext.P4 stay petition for the assessment year 2021-2022 under the Income Tax Act. The apprehension of the appellant was that even before consideration of the appeal there would be recovery steps initiated by the respondents for recovery of the amounts confirmed against the appellant by Ext.P1assessment order.
The learned Single Judge who considered the matter directed the respondents to finally hear and dispose of the appeal as expeditiously as possible, preferably within a period of six months. The learned Single Judge, however, did not grant a stay of recovery proceedings pending disposal of the appeal by the respondents. It is for this limited relief that the appellant
W.A.No.2200/2023 is before us through the present appeal.
We have heard Sri. O.D. Sivadas, the learned counsel for the appellant and Sri.Jose Joseph, the learned Standing counsel for the Income Tax Department. In our view, since the learned Single Judge had relegated the appellant to the alternative remedy before the statutory authority it was incumbent upon the learned Judge to protect the appellant from recovery proceedings pending disposal of the petition by the respondent appellate authority. Accordingly, we modify the impugned judgment of the learned Single Judge to the limited extent of clarifying that pending disposal of the appeal by the appellate authority, the recovery proceedings against the appellant for recovery of the amounts confirmed against it by Ext.P1assessment order shall be kept in abeyance. Save for this limited modification, the rest of the directions in the impugned judgment are not interfered with. DR. A.K.JAYASANKARAN NAMBIAR JUDGE DR. KAUSER EDAPPAGATH JUDGE kp
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