HLL BIOTECH LTD. vs. INCOME TAX OFFICER

WP(C)/218/2019HC KeralaKLHC01000596201904 January 2019Author: HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU5 pages

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What did the High Court hold?

The High Court acknowledged that the petitioner had filed second appeals and stay petitions before the ITAT in a timely manner. The Court held that procedural fairness requires tax authorities to wait before taking further coercive steps until the appellate authority (ITAT) has decided on the pending stay petitions. Consequently, the Court directed the respondent authorities to defer coercive steps until the ITAT considers the stay petitions. The Court also expressed hope that the ITAT would dispose of the stay petitions expeditiously. No specific issue regarding the merits of the assessment or the stay petitions was decided.

What were the facts?

The petitioner, HLL Biotech Ltd., is an assessee under the Income Tax Act, 1961. The assessee challenged assessment orders (Exts.P1 and P3) before the Commissioner of Income Tax (Appeals), which resulted in orders Exts.P9 and P10. Subsequently, the assessee filed second appeals before the Income Tax Appellate Tribunal (ITAT), the fourth respondent, along with stay petitions. The petitioner filed the present writ petition alleging that tax authorities were taking coercive steps before the ITAT could decide on the stay petitions.

What were the issues?

1. Whether the tax authorities can take coercive steps against the assessee while stay petitions are pending before the Income Tax Appellate Tribunal? (Question of procedure and fairness) The assessee contended that they have exercised their statutory remedy by filing second appeals and stay petitions before the ITAT. They argued that procedural fairness dictates that coercive steps should be deferred until the ITAT decides on the stay petitions. The revenue's contentions are not recorded in the judgment.

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 FRIDAY ,THE 04TH DAY OF JANUARY 2019 / 14TH POUSHA, 1940 WP(C).No. 218 of 2019 PETITIONER/S: HLL BIOTECH LTD. HLL BHAVAN, POOJAPPURA P.O., THIRUVANANTHAPURAM -695012, REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER. BY ADVS. SRI.V.KRISHNA MENON SMT.J.SURYA SMT.P.VIJAYAMMA SRI.E.K.MADHAVAN SRI.PRINSUN PHILIP RESPONDENT/S: 1 INCOME TAX OFFICER WARD 1(1), OFFICE OF THE JOINT COMMISSIONER OF INCOME TAX, RANGE-I, KOWDIYAR, THIRUVANANTHAPURAM-695003. 2 COMMISSIONER OF INCOME TAX(APPEALS), AAYAKKAR BHAWAN, KOWDIYAR, THIRUVANANTHAPURAM-695 003. 3 PRINCIPAL COMMISSIONER OF INCOME TAX, AAYAKAR BHAWAN, KOWDIAR, THIRUVANANTHAPURAM-695 003. 4 INCOME TAX APPELLATE TRIBUNAL-COCHIN BENCH, 1ST FLOOR WING C1 AND C2, KENDRIYA BHAVAN, OPP. TO CSEZ, KAKKANAD, KOCHI-682037, REPRESENTED BY ITS ASSISTANT REGISTRAR. W.P.(C) No. 218/2019 -2- OTHER PRESENT: SRI CHRISTOPHER ABRAHAM, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.01.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

J U D G M E N T The petitioner, an assessee under the Income Tax Act, 1961, questioned the Exts.P1 and P3 assessment orders before the Commissioner of Income Tax (Appeals). It resulted in the Exts.P9 and P10 orders.

The petitioner again challenged the Exts.P9 and P10 orders in the second appeal, before the Appellate Tribunal, the fourth respondent. The petitioner, in the appeals, filed stay petitions, too. Ventilating its grievance that the authorities are taking coercive steps before the appellate authority could consider the stay petitions in the appeals, the petitioner has filed this writ petition.

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Heard the learned counsel for the petitioner and the learned Standing Counsel.

I reckon the petitioner has exercised on time its statutory remedy of filing second appeals. True, before the Tribunal, stay petitions are pending. Procedural fairness demands that the authorities wait, before taking further steps, until the appellate authority decides on the stay petitions. Therefore, I dispose of the writ petition, directing the respondent authority to defer coercive steps until the fourth respondent considers the stay petitions. I also hope that the fourth respondent will dispose of the stay petitions expeditiously. DAMA SESHADRI NAIDU JUDGE jjj -4-

Appendix — schedule of exhibits

APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 28.6.2018. EXHIBIT P2 TRUE COPY OF THE NOTICE OF DEMAND IN FORM-7 UNDER SECTION 156 OF THE INCOME TAX ACT. EXHIBIT P3 TRUE COPY OF THE ORDER DATED 19.12.2017. EXHIBIT P4 TRUE COPY OF THE NOTICE OF DEMAND DATED 19.12.2017. EXHIBIT P5 TRUE COPY OF THE MEMORANDUM OF APPEAL FOR THE ASSESSMENT YEAR 2013-14. EXHIBIT P6 TRUE COPY OF THE MEMORANDUM OF APPEAL FOR THE ASSESSMENT YEAR 2015-16. EXHIBIT P7 TRUE COPY OF THE JUDGMENT DATED 30.1.2018 IN W.P. (C) NO.2396/2018. EXHIBIT P8 TRUE COPY OF THE LETTER DATED 14.6.2018. EXHIBIT P9 TRUE COPY OF THE ORDER DATED 30.11.2018 FOR THE ASST. YEAR 2013-14. EXHIBIT P10 TRUE COPY OF THE ORDER DATED 30.11.2018 FOR THE ASST. YEAR 2015-16. EXHIBIT P11 TRUE COPY OF THE MEMORANDUM OF APPEAL FOR THE ASSESSMENT YEAR 2013-14 BEFORE THE INCOME TAX APPELLATE TRIBUNAL, KOCHI. EXHIBIT P12 TRUE COPY OF THE MEMORANDUM OF APPEAL FOR THE ASSESSMENT YEAR 2015-16 BEFORE THE INCOME TAX APPELLATE TRIBUNAL, KOCHI. EXHIBIT P13 TRUE COPY OF THE STAY PETITION. W.P.(C) No. 218/2019 -5- EXHIBIT P14 TRUE COPY OF THE STAY PETITION. EXHIBIT P15 TRUE COPY OF THE LETTER DATED 19.12.2019.

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