BELGIUM GLASS AND CERAMICS PVT. LTD. vs. DEPUTY COMMISSIONER OF INCOME TAX
What did the High Court hold?
The High Court disposed of the Special Civil Applications by directing the petitioner to deposit a total sum of Rs. 1 Crore. It was noted that the petitioner had already deposited this amount, which approximately constituted 10% of the total demand raised by the Income Tax Department. Upon this deposit, the assessee would not be treated as in default with respect to the demand raised by the Assessing Officer during the pendency of the appeals before the Commissioner of Income Tax (Appeals). The Court expressed hope that the CESTAT and the Commissioner of Income Tax (Appeals) would dispose of their respective appeals at the earliest, preferably within six months. The Court directed the Registry to send a writ of this order to the CESTAT and the Commissioner of Income Tax (Appeals) to decide the appeals in accordance with law and on their merits within the stipulated time. No issue was expressly left undecided, as the matter was disposed of based on the ad-interim relief granted and the submissions made.
What were the facts?
The assessee, Belgium Glass and Ceramics Pvt. Ltd., filed multiple Special Civil Applications challenging orders from the Assessing Officer, Additional Commissioner of Income Tax, and Commissioner of Income Tax. These orders pertained to a total demand of approximately Rs. 9.76 Crores, including interest, for Assessment Years 2005-06 to 2010-11. The assessee had applied for a stay of this demand pending appeals before the Commissioner of Income Tax (Appeals). The Assessing Officer initially directed payment within five days. The Additional Commissioner rejected the stay application, demanding payment within seven days. Subsequently, the Commissioner of Income Tax directed the deposit of 50% of the total demand in two installments by March 20, 2014, staying the balance until the first appeal or June 15, 2014, whichever was earlier. A Division Bench of the High Court had previously directed the petitioner to deposit Rs. 1 Crore as an ad-interim measure.
What were the issues?
1. Whether the High Court, in its writ jurisdiction under Article 226 of the Constitution of India, should grant relief to the assessee regarding the demand raised by the Income Tax Department, considering a similar transaction and demand by the Excise Department was stayed by a Division Bench upon deposit of approximately 10% of the demand. Assessee's contention: The assessee argued that since a similar demand by the Excise Department for the very same transaction was stayed by a Division Bench of the High Court upon deposit of 10% of the demand, the present Income Tax demand should also be stayed on similar terms pending the appeal before the Commissioner of Income Tax (Appeals). The assessee also attempted to make submissions on merits. Revenue's contention: The revenue, through its learned advocate, requested the Court to pass an order on the same lines as the order passed in the Excise Department's case, without inviting further reasoned arguments.
Which sections of the Income-tax Act were involved?
Article 226
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH)
As common question of law and facts arise in these group of petitions and are with respect to the same assessee but with respect to different Assessment Years, with the consent of the learned advocates appearing on behalf of the respective parties, all these petitions are finally disposed of by this common order.
The Assessing Officer has raised the demand of Income Tax with interest of approximately Rs.9.76 Crores for the Assessment Years 2005-06 to 2010-11 against the assessee. Pending the appeals before the Commissioner of Income Tax (Appeals), the common petitioner submitted applications before the Assessing Officer not to treat the assessee in default with respect to the demand of Income Tax with interest raised by the Assessing Officer. By order dated 06/08/2013 the Assessing Officer directed the petitioner to make the payment of demand within a period of five days failing which the assessee shall be treated to be in default. It appears that thereafter the petitioner approached the Additional Commissioner of Income Tax for stay of the demand and by order dated 18/10/2013 the Additional Commissioner of Income Tax rejected the applications submitted by the assessee for stay of the demand and the assessee was requested to pay the demand within seven days of receipt of the said letter and failing to do so directed that the petitioner will be treated as an assessee in default and recovery proceedings will be initiated as per the Income Tax Act, 1961. It appears that thereafter the petitioner approached the Commissioner of Income Tax and by order dated 28/01/2014 the petitioner was directed to deposit 50% of the payment of the total demand by 20/03/2014 in two equal instalments, first on or before 15/02/2014 and second on or before 20/03/2014 and the balance demand is stayed till the deposit of the first appeal or 15/06/2014, whichever is earlier.
Being aggrieved and dissatisfied with the impugned orders passed by the respective authorities i.e. the Assessing Officer, Additional Commissioner of Income Tax and the Commissioner of Income, the petitioner has preferred the present Special Civil Applications under Article 226 of the Constitution of India.
At the outset, it is required to be noted that by order dated 03/03/2014 the Division Bench of this Court directed the petitioner to deposit a total sum of Rs.1 Crore with the Assessing Officer, out of the total tax demanded, and on that ad-interim relief has been granted. It is reported that the petitioner has deposited the aforesaid amount of Rs.1 Crore and has complied with the interim order passed by this Court. The order dated 03/03/2014 passed by the Division Bench reads as under; “Draft amendment is allowed. Petitioner has preferred appeal against an order of assessment on which the Assessing Officer has raised demand of income tax with interest of approximately Rs.
76 Crores for Assessment Years 200506 to 201011. Pending such appeal, the petitioner applied for stay – first before the Assessing Officer and thereafter before the higher authorities. Having failed in obtaining any stay, the petitioner has filed these petitions. One of the main grounds of challenge in the present petitions is that the Assessing Officer had relied entirely on a show cause notice issued by the Excise authorities for raising the tax demand. It is the case of the petitioner that without any independent material, the Income tax authorities could not have made additions on the basis of show cause notice issued by the Excise Department. In the present case, however, we notice that subsequently the Commissioner, Excise has completed adjudication proceedings and also confirmed the duty, interest and penalty demand, as indicated in the show cause notice. The petitioner, however, is in appeal before the Tribunal. Pending such appeal, the petitioner is to deposit approximately 10% of the confirmed demand by virtue of the orders passed by the Tribunal and this Court. Notice returnable on 1st April 2014 . By way of ad interim relief, the respondents are prevented from carrying out further coercive recovery of the tax demand on condition that the petitioner shall deposit a sum of Rs. 1 Crore before the returnable date with the Assessing Officer out of the total tax demand; of course without prejudice to its contentions in the appeal.”
Shri Soparkar, learned Counsel appearing on behalf of the petitioner has vehemently submitted that the Division Bench of this Court with respect to the demand raised by the Excise Department with respect to the very transaction has passed an order granting stay of the demand raised by the Excise Department on deposit of 10% of the demand raised. It is submitted that therefore in the present case also, if on deposit of 10% of the demand raised, the petitioner is treated as not in default, during pendency of the appeal/appeals before the Commissioner of Income Tax (Appeals), it will be in the fitness of things. Shri Soparkar, learned Counsel has also tried to make elaborate submissions on merits. However, considering the order passed by the Division Bench of this Court in Special Civil Application No.4635/2012 dated 02/07/2012 further clarified by order dated 08/08/2012, we propose to dispose of the present Special Civil Applications. We are not permitting Shri Soparkar, learned Counsel appearing on behalf of the petitioner to make elaborate submissions on merits, more particularly, when the appeals are pending before the Commissioner of Income Tax (Appeals) and, therefore, any observations at this stage may affect the case of either of the parties.
Having being faced with the order of the Division Bench of this Court passed in Special Civil Application No.4634/2012 with respect to the demand raised by the Excise Department with respect to the very transaction and by which the Division Bench has directed to stay the demand raised by the Excise Department during pendency of the appeal before the CESTAT on deposit of approximately 10% of the demand raised by the Excise Department, which comes to Rs.1,38,42,000/-, Shri K.M. Parikh, learned advocate appearing on behalf of the revenue has requested to pass an appropriate order on the same line. He has stated at the bar that he does not invite any further reasoned order.
Having heard the learned advocates appearing on behalf of the respective parties and considering the order passed by the Division Bench of this Court in Special Civil Application No.4634/2012 in the case of the very assessee and with respect to the demand raised by the Excise Department with respect to the very transaction by which the Division Bench has stayed the demand raised by the Excise Department during pendency of the appeal before the CESTAT on condition that the assessee shall deposit 10% of the total demand raised by the Excise Department, we deem it fit to direct the petitioner to deposit the total sum of Rs.1 Crore, which approximately comes to 10% of the total demand raised by the Income Tax Department and on such deposit the assessee shall not be treated as in default during pendency of the appeal. It is reported that the petitioner has already deposited the sum of Rs.1 Crore (being 10% of the demand raised by the Income Tax Department) and, therefore, the petitioner is not required to deposit any further amount.
In view of the above and for the reasons stated hereinabove, all these petitions are disposed of by directing that on deposit of the total sum of Rs.1 Crore (which is reported to be have been already deposited by the petitioner) the petitioner shall not be treated as in default with respect to the demand raised by the Assessing Officer, during pendency of the appeals before the Commissioner of Income Tax (Appeals). It is hoped that the CESTAT as well as the Commissioner of Income Tax (Appeals) shall dispose of the respective appeals at the earliest and preferably within a period of six months from the date of receipt of the present orders.
Registry is directed to send the writ of this order to the CESTAT as well as Commissioner of Income Tax (Appeals) to decide and dispose of the respective appeals in accordance with law and on its own merits at the earliest and within the stipulated time stated hereinabove.
With this, all the petitions are disposed of. (M.R. SHAH, J.) (K.J. THAKER, J.) Siji
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