KERALA STATE BEVERAGES (MANUFACTURING AND MARKETING) CORPORATION LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX,

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WP(C)/37083/2018HC KeralaKLHC01085931201826 February 2019Author: HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition by directing the revenue authorities to defer coercive steps until the Income Tax Appellate Tribunal considers the petitioner's stay petition. The Court noted that the Tribunal should consider the stay petition expeditiously. The High Court did not decide the merits of the tax dispute or the petitioner's appeal before the Tribunal. The operative direction is to defer recovery actions pending the Tribunal's decision on the stay petition.

What were the facts?

The petitioner, Kerala State Beverages (Manufacturing and Marketing) Corporation Ltd., filed a writ petition challenging coercive steps taken for tax recovery. An earlier order had granted an absolute stay on recovery until the petitioner's statutory appeal was disposed of. Subsequently, the petitioner's bank account was frozen, prompting this writ petition, as the petitioner claimed no order was communicated. The petitioner has now brought on record the order in appeal and its further challenge before the Income Tax Appellate Tribunal (ITAT). The petitioner seeks to continue the stay granted earlier until the ITAT considers its stay petition in the second appeal.

What were the issues?

1. Whether the High Court should continue the stay granted earlier in the writ petition until the Income Tax Appellate Tribunal considers the petitioner's stay petition in its second appeal. The petitioner argues that coercive steps are being initiated despite the pendency of its appeal before the Tribunal and the fact that the Tribunal has not yet considered its stay petition. The revenue's contentions are not recorded in the judgment. The issue turns on the court's power to grant interim relief pending adjudication by a statutory tribunal.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU TUESDAY ,THE 26TH DAY OF FEBRUARY 2019 / 7TH PHALGUNA, 1940 WP(C).No. 37083 of 2018 PETITIONER: KERALA STATE BEVERAGES (MANUFACTURING AND MARKETING) CORPORATION LTD. PALAYAM, VIKAS BHAVAN P.O., THIRUVANANTHAPURAM 695003,REPRESENTED BY ITS GENERAL MANAGER-FINANCE, SUNIL KUMAR S. BY ADVS. SRI.ANIL D. NAIR SMT. ARYA ANIL SMT. NILOOFAR O. NIZAM SRI.R.SREEJITH RESPONDENTS: 1 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1 (1), THIRUVANANTHAPURAM- 695 001. 2 3 COMMISSIONER OF INCOME TAX (APPEALS), THIRUVANANTHAPURAM-695001. INCOME TAX APPELLATE TRIBUNAL, KOCHI OTHER PRESENT: SC SRI. CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.37083 of 2018 2

JUDGMENT Against the Ext.P1 assessment order, the petitioner filed a statutory appeal and the stay petition. Through the Ext.P2 judgment a Division Bench of this Court granted absolute stay till that appeal was disposed of. Later, when the petitioner's bank account was frozen, it filed this writ petition contending that the authorities had not communicated the order to it; yet they initiated coercive steps to recover the tax.

2.

Given the later developments, now, the petitioner has brought on record not only the copy of the order in appeal but also the petitioner's further challenge against that appeal before the Tribunal. Now the petitioner wants this Court to continue the stay granted earlier in this writ petition until the Appellate Tribunal considers the petitioner's stay petition in that second appeal.

3.

To issue such a direction as sought by the petitioner, I reckon, the Statutory Tribunal ought to be a party on record. So I suo motu add the Income Tax Appellate Tribunal, Kochi, as the third respondent. The Registry will ensure that the additional respondent is suo motu impleaded.

4.

Heard Sri Anil D.Nair, the learned counsel for the petitioner and WPC No.37083 of 2018 3 Sri Christopher Abraham, the learned Standing Counsel appearing for the respondents. Under these circumstances, I dispose of this Writ Petition holding that the authorities will defer the coercive steps until the third respondent Tribunal considers the petitioner's stay petition— Ext.P8. The Tribunal may consider the stay petition expeditiously. DAMA SESHADRI NAIDU JUDGE Css/

WPC No.37083 of 2018 4

Appendix — schedule of exhibits
APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 TRUE COPY OF ORDER DATED 28.12.2017 SERVED ON THE PETITIONER BY THE FIRST RESPONDENT EXHIBIT P2 TRUE COPY OF JUDGMENT DATED 26.6.2018 IN WRIT PETITION NO.1007/2018 EXHIBIT P3 TRUE COPY OF THE ARGUMENT NOTE FILED BY THE PETITIONER BEFORE THE SECOND RESPONDENT EXHIBIT P4 TRUE COPY OF LETTER DATED 8.11.2018 SERVED BY THE FIRST RESPONDENT TO THE PETITIONER EXHIBIT P5 TRUE COPY OF LETTER DATED 12.11.2018 PRODUCED BY THE PETITIONER TO THE 1ST RESPONDENT EXHIBIT P6 TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), THIRUVANANTHAPURAM FOR THE RETURN PERIOD 2015-16. EXHIBIT P7 TRUE COPY OF THE APPEAL MEMORANDUM FILED BY PETITIONER BEFORE THE INCOME TAX APPELLATE TRIBUNAL FOR THE RETURN PERIOD 2015-16. EXHIBIT P8 TRUE COPY OF THE STAY PETITION FILED BEFORE THE INCOME TAX APPELLATE TRIBUNAL FOR THE RETURN PERIOD 2015-16

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