ABDUL JABBAR, vs. THE COMMISSIONER OF INCOME TAX(APPEALS),
What did the High Court hold?
The High Court held that the petitioner's request to furnish immovable property security in compliance with the 40% deposit condition was untenable and could not be directed. The Court also noted that while the 40% condition was not entirely incorrect, it was not a norm, with 20% of the demand being more common pending appeal. The Court, while not substituting its discretion for that of the appellate authority, modified the condition to 30% of the demand. The first installment was to be paid by July 15, 2019, and the second by August 15, 2019. Subject to compliance, the stay granted by the appellate authority would remain in effect. The Court clarified that any default in installments would lead to the vacation of the stay without further reference to the court. The Court did not explicitly leave any issue undecided.
What were the facts?
The petitioner, Abdul Jabbar, challenged an order of stay granted by the Commissioner of Income Tax (Appeals) (1st respondent). The impugned order imposed a condition of depositing 40% of the tax demand in two equal installments. The petitioner argued that this condition was arbitrary and illegal, as he had good chances of success in his appeal and was willing to furnish immovable property as security. The Income Tax Officer (2nd respondent) opposed the writ petition, stating that the 1st respondent had exercised discretion in granting the stay with a 40% deposit condition and installments, and that the department does not accept movable property security in lieu of deposit. The petitioner sought to set aside the condition and for expeditious disposal of his appeal.
What were the issues?
1. Whether the condition imposed by the Commissioner of Income Tax (Appeals) to deposit 40% of the demand in two equal installments, as a condition for stay pending appeal, is arbitrary and illegal, contrary to the discretionary powers conferred on the authority? (Question of law and fact, turning on the exercise of discretion under the Income Tax Act, 1961). Assessee's contentions: The condition of depositing 40% of the demand is arbitrary and illegal. The petitioner has fair chances of success in the appeal and is prepared to furnish immovable property security for the tax demanded. The petitioner seeks setting aside of the condition and expeditious disposal of the appeal. Revenue's contentions: The Commissioner of Income Tax (Appeals) exercised discretion and granted stay pending appeal. The condition to deposit 40% is not excessive, and installments have been granted. The department does not accept movable property security in lieu of depositing 40% of the demand. The revenue prays for dismissal of the writ petition.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT Heard Sri.P.B.Sahasranaman, the learned counsel for the petitioner and Sri.Jose Joseph, the learned Standing Counsel.
Petitioner challenges Ext.P4 order of stay granted by the 1st respondent. The counsel for the petitioner contends that in the peculiar circumstances of this case imposing condition of depositing 40 % of the demand in two equal instalments amounts to arbitrary and illegal exercise of jurisdiction and contrary to the discretion conferred on the 1st respondent. According to him the petitioner has, fairly good chances to succeed in the appeal and therefore to prove the bonafides the petitioner is prepared to give immovable property security for the tax demanded by the 2nd respondent. He prays for setting aside the condition and seeks direction for expeditious disposal of appeal.
Sri.Jose Joseph, opposes the writ prayer by contending that the 1st respondent exercised the discretion and granted stay pending appeal. The condition to deposit 40% firstly is not on the higher side and secondly instalments are also granted. According to him, the department doest not accept movable property security in lieu of -3- depositing 40% imposed through Ext.P4 order. He prays for dismissing the writ petition.
The submissions made by the counsel are noted and prima facie this Court is of the view that the request of the petitioner to furnish immovable property in compliance with the depositing 40% is untenable and therefore cannot be considered much less a direction could be issued to respondents to receive immovable property security towards compliance with 40% condition imposed in the conditional stay order. The other objection that the 40% condition is also onerous is not fully correct. The appellate authority to the extent required, as it appears from Ext.P4 examined the case and exercised of the discretion. In normal circumstances this Court in exercise of its jurisdiction under Article 226 may not interdict the orders passed by exercising discretion and power of the authority, unless the admissible legal grounds are made out in this behalf. However, in the case on hand, no special reason is assigned for 40% deposit and instead of 20% of demand which is a norm mostly looked at pending appeal. Though this Court shall not be understood as substituting its discretion for the power already exercised in the 1st respondent, to meet the ends of justice and in the circumstances of -4- this case condition of 40% imposed by Ext.P4 is modified as 30%, first instalment payable on or before 15.07.2019 and 2nd instalment payable on or before 15.08.2019. Subject to complying with the condition the petitioner is entitled to enjoy the stay of order under appeal before 1st respondent. The petitioner if commits default of any instalment, it is made clear without reference to court the stay granted by this order and Ext.P4 shall stand vacated. S.V.BHATTI JUDGE Ac -5-
Appendix — schedule of exhibits
Recent GST High Court judgments
Search GST case law →- Biswanath Rana vs. The Commissioner, CT And GST, Odisha, CuttackOrissa · 28 Oct 2026
- Sushama Mishra vs. The Commissioner Of CT And GST, Odisha, KatakOrissa · 28 Oct 2026
- Saudamini Samantray vs. Assistant Commissioner Of State Tax, CT And GST, Bhubaneswar IiOrissa · 28 Oct 2026
- M/S. Keshav Rice Mill, Ganjam vs. Chief Commissioner, CT And GST, Odisha, KatakaOrissa · 28 Oct 2026
- M/S. Nanda Contruction PVT. LTD., Angul vs. Additional Commissioner, GST And Central Excise Commissionerate, SundergarhOrissa · 28 Oct 2026
