THE SREEKRISHNAPURAM SERVICE CO-OPERATIVE BANK LTD. NO.F1213, vs. THE ASSISTANT COMMISSIONER OF INCOME TAX,

WP(C)/19115/2019HC KeralaKLHC01048795201912 July 2019Author: HONOURABLE MR.JUSTICE S.V.BHATTI4 pages

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What did the High Court hold?

The High Court of Kerala, while perusing the relevant documents (Exts. P1, P2, and P3), was prima facie satisfied that a case was made out for issuing necessary directions to the 2nd respondent (the appellate authority). The Court acknowledged the limited prayer made by the petitioner. Consequently, the Court directed the appellate authority (2nd respondent) to consider and dispose of the stay application (Ext.P3) as early as possible, preferably within two months from the date of receipt of a copy of the judgment. Additionally, the respondents were directed not to take coercive steps or recover the amounts determined in the orders under appeal for ten weeks from the date of the judgment. The Court did not decide on the merits of the appeal or the stay petition itself, but rather on the procedural aspect of expeditious disposal.

What were the facts?

The petitioner, The Sreekrishnapuram Service Co-operative Bank Ltd., filed an appeal (Ext.P2) against assessment orders (Ext.P1) passed under Section 25(1) of the KVAT Act. Along with the appeal, a stay petition (Ext.P3) was filed. The petitioner contended that the mere filing or pendency of an appeal does not automatically grant a stay. They argued that delays in deciding the stay petition by the appellate authority (2nd respondent) could lead to the assessing officer initiating recovery proceedings, rendering the statutory appeal ineffective. The petitioner sought a direction for the appellate authority to expeditiously consider and dispose of the stay petition.

What were the issues?

1. Whether the mere filing or pendency of an appeal against an assessment order amounts to a stay of the demand, thereby preventing recovery proceedings by the assessing officer? (Question of law and fact, concerning the interpretation of appeal and stay provisions). Assessee's Contentions: - The filing or pendency of an appeal does not automatically grant a stay. - Delay in disposing of the stay petition by the appellate authority can lead to coercive recovery steps by the assessing officer. - Such recovery actions can render the statutory appeal academic or ineffective. - The law mandates expeditious passing of orders on stay petitions to protect the appellant's interest pending appeal. Revenue's Contentions: - The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 25(1)

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 S.V.BHATTI FRIDAY, THE 12TH DAY OF JULY 2019 / 21ST ASHADHA, 1941 WP(C).No.19115 of 2019 PETITIONER/S: THE SREEKRISHNAPURAM SERVICE CO-OPERATIVE BANK LTD. NO.F1213, SREEKRISHNAPURAM P.O., PALAKKAD-679 513, REPRESENTED BY ITS SECRETARY, ULLAS KUMAR C., AGED 38, S/O. JANARDHANAN NAIR. BY ADVS. SRI.HARISANKAR V. MENON SMT.K.KRISHNA SMT.MEERA V.MENON RESPONDENT/S: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-I, PALAKKAD-678014. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), SAKTHAN NAGAR, THRISSUR-680001. 3 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-I, AAYKAR BHAVAN, PALAKKAD-678014. SC JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.07.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: -2- WP(C).No.19115 of 2019

JUDGMENT The petitioner filed appeal in Ext.P2 aggrieved by the orders of assessment in Ext.P1 made under Section 25(1) of the KVAT Act. The petitioner has filed the appeal with a stay petition in Ext.P3. The petitioner prays for appropriate direction to the appellate authority to consider and dispose of Ext.P3 expeditiously.

The case of petitioner is that either the mere filing of appeal or mere pendency of appeal does not amount to granting stay by the appellate authority. The delay in considering and disposing of Ext.P3 results in the assessing officer taking steps for recovering the tax amount which is under challenge in Ext.P2. The assessing officer, if is successful in his effort the statutory appeal would become either academic or ineffective. It is further contended by the petitioner that in the manner the law provides for protecting the interest of appellant pending appeal, the order on stay petition is passed expeditiously. Hence the writ petition.

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Perused Exts. P1, P2 and P3. Prima facie I am satisfied that a case is made out for issuing necessary directions to 2nd respondent to dispose of the stay petition in Ext.P3. Having regard to the limited prayer and the grounds referred to above, this Court is satisfied that the writ petition can be disposed of by this order: (a) The appellate authority/ 2nd respondent considers and disposes of Ext.P3 application as early as possible, preferably within two months from the date of receipt of copy of this judgment. (b) The respondents are directed not to take coercive steps or recover the amounts determined in the orders under appeal for ten weeks from today. S.V.BHATTI JUDGE JS

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Appendix — schedule of exhibits

APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2015-16 DATED 27/12/2017. EXHIBIT P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2015-16 DATED 22/01/2018. EXHIBIT P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2015-16 DATED 10/07/2019. EXHIBIT P4 COPY OF COMMUNICATION ISSUED BY THE 3RD RESPONDENT FOR THE YEAR 2015-16 DATED 09/05/2016.

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