JACOB THOMAS vs. ASSISTANT COMMISSIONER OF INCOME TAX
What did the High Court hold?
The High Court held that the Commissioner of Income Tax (Appeals) had not assigned independent reasons for the conditional stay granted in the impugned order (Ext.P5). While the Commissioner acknowledged the High Court's previous direction, the order simply followed a CBDT Circular regarding the deposit of 20% of the demand for an automatic stay. The Court found that this approach did not constitute an adjudication of the stay application and undermined the process. Consequently, the High Court allowed the writ petition, set aside the impugned order dated 22.11.2023, and remanded the matter back to the Commissioner of Income Tax (Appeals) to pass fresh orders in accordance with the law, ensuring that reasons are assigned in support of the decision on the stay petition after affording the petitioner an opportunity of hearing. No issue was expressly left undecided.
What were the facts?
The petitioner, Jacob Thomas, an assessee, filed a writ petition (WP(C) No. 40326/2023) before the High Court of Kerala. This was the second round of litigation. In the first round, WP(C) No. 23096/2023, the High Court directed the Commissioner of Income Tax (Appeals), National Faceless Assessment Centre (NFAC), New Delhi, to dispose of the assessee's appeal and stay petition against an assessment order within three months, affording an opportunity of hearing and assigning reasons if a conditional stay was proposed. The current petition challenges the order dated 22.11.2023 (Ext.P5) passed by the Commissioner of Income Tax (Appeals) in compliance with the previous High Court order.
What were the issues?
1. Whether the Commissioner of Income Tax (Appeals) adequately complied with the High Court's previous order dated 19.07.2023 by assigning sufficient reasons for the conditional stay granted, as required by law? Assessee's Contentions: The assessee argued that the impugned order (Ext.P5) failed to assign independent reasons for granting a conditional stay of 80% of the demand upon deposit of 20%. The Commissioner merely followed a CBDT Circular, which, according to the assessee, does not constitute adjudication of the stay application and defeats the purpose of the adjudicatory process for interim stay applications. The assessee contended that the order lacked independent reasoning beyond the circular. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT This is the second round of litigation before this Court by the petitioner/assessee. Earlier, the assessee had approached this Court by filing W.P.(C.) No. 23096/2023 for a direction to the Commissioner of Income Tax (Appeals), National Faceless Assessment Centre (NFAC), New Delhi to consider and dispose of appeal and stay petition instituted against the assessment order. This Court disposed of the said writ petition vide judgment dated 19.07.2023 with a direction to the Commissioner of Income Tax (Appeals) to consider and dispose of Ext.P3 stay petition, in accordance with law and as expeditiously as possible, at any rate, within a period of three months from the date of receipt of a copy of that judgment, after affording an opportunity of being heard to the assessee. It was further stated that if the Commissioner of Income Tax (Appeals) proposed to pass conditional order of stay, he should assign reasons for the same.
In compliance of the said judgment dated 19.07.2023, the petitioner's stay application has been decided vide Ext.P5 impugned order. Though the Commissioner of Income Tax (Appeals), (NFAC) has taken note of the direction issued by this Court in its judgment dated 19.07.2023, however, in the impugned order no reason has been assigned for conditional stay of 80% of the demand, in case the petitioner deposits 20% of the demand. In fact the Commissioner of Income Tax (Appeals), NFAC has just followed the Circular in this respect issued by the Central Board of Direct Tax. The Commissioner of Income Tax (Appeals) has not assigned any independent reason for not granting the interim protection to the petitioner. In fact, he has not driven beyond the Circular issued in this respect. If an assessee, during the pendency of the appeal, deposits 20% of the demand, there is an automatic stay and if the Appellate Authority just following the Circular, there is no adjudication on the stay application. Such a course will defeat the adjudicatory process of the interim stay applications.
In view thereof, I allow this writ petition and set aside Ext.P5 order dated 22.11.2023 passed by the second respondent and remand the matter back to the second respondent to pass fresh orders, in accordance with law, after assigning reasons in support of the order passed by them. Needless to say, the petitioner should be afforded an opportunity of hearing before the order is passed on the stay petition. The writ petition is disposed of as above. DINESH KUMAR SINGH
JUDGE DCS/07.12.2023
Appendix — schedule of exhibits
Recent GST High Court judgments
Search GST case law →- Manoj Kumar Prop M K Steel Traders vs. Additional Commissioner, Central Goods And Services Tax & Anr.Delhi · 28 Oct 2026
- M/S. Rohit Medical Systems vs. Commissioner Of Delhi Goods And Services Tax And Anr.Delhi · 28 Oct 2026
- Manoj Kumar Prop M K Steel Traders vs. Additional Commissioner, Central Goods And Services Tax & Anr.Delhi · 28 Oct 2026
- Shivam Kumar vs. The State Of BiharPatna · 28 Oct 2026
- M/S Rajkalpana Travels PVT. LTD. vs. Commissioner CGST, Delhi North CommissionerateDelhi · 28 Oct 2026
