O.DINESH KUMAR, vs. INCOME TAX OFFICER

PDF · subscribers
WP(C)/11066/2019HC KeralaKLHC01027661201912 April 2019Author: HONOURABLE MR.JUSTICE S.V.BHATTI5 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court, while not finding outright illegality in the exercise of discretion by the Commissioner of Income Tax (Appeals) warranting judicial review, was persuaded by the circumstances presented to modify the condition for stay. The Court substituted the 20% deposit requirement with a 10% deposit, to be paid within 45 days from the date of the order. The petitioner would enjoy the benefit of the stay order subject to compliance with this modified condition. Failure to comply would result in the presumption that the stay order is not in operation. Additionally, the Court directed the 2nd respondent to consider and dispose of the appeal within four months from the date of the order. The writ petition was disposed of accordingly.

What were the facts?

The petitioner, O. Dinesh Kumar, an ex-managing partner of a dissolved firm M/s. Anashwara Silks and Sarees, filed a writ petition challenging an order (Ext.P7) passed by the Commissioner of Income Tax (Appeals) (2nd respondent). The appeal concerned assessment year 2015-2016. The Commissioner had granted a stay on the demand, but subject to the condition of the petitioner paying or depositing 20% of the total tax demanded. The petitioner argued this condition was onerous and the order failed to consider the grounds of appeal. The Income Tax Officer (1st respondent) and the Principal Commissioner of Income Tax (3rd respondent) were also respondents. The petitioner sought to set aside Ext.P7 and obtain a stay without any condition.

What were the issues?

1. Whether the condition imposed by the Commissioner of Income Tax (Appeals) to deposit 20% of the total tax demanded for assessment year 2015-2016 as a condition for stay is illegal or warrants judicial review. Assessee's Contentions: The petitioner argued that the 20% condition imposed by the 2nd respondent was onerous and that the order failed to consider the grounds raised in the appeal. The petitioner prayed for the setting aside of Ext.P7 and for a stay to be granted without any condition. Revenue's Contentions: The revenue contended that the 2nd respondent exercised jurisdiction correctly and that the condition of depositing 20% of the tax demanded was justifiable. The revenue relied on the reasoning provided by the 2nd respondent in paragraph 4 of Ext.P7. Alternatively, the revenue suggested that the appeal be disposed of expeditiously with a reasonable condition in lieu of the 20% deposit.

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 APRIL 2019 / 22ND CHAITHRA, 1941 WP(C).No. 11066 of 2019 PETITIONER/S: O.DINESH KUMAR,EX-MANAGING PARTNER M/S. ANASHWARA SILKS AND SAREES (DISSOLVED FIRM) G MALL, CALTEX KANNUR 670 001 BY ADVS. SRI.S.ARUN RAJ SMT.C.T.SUJA RESPONDENT/S: 1 INCOME TAX OFFICER,WARD-1 AND TPS KANNUR RANGE, AAYAKAR BHAVAN, KANNUR 670 006 2 THE COMMISSIONER OF INCOME TAX (APPEALS) OFFICE OF THE COMMISSIONER OF INCOME TAX (APPEALS,) AAYAKAR BHAVAN NORTH BLOCK, MANANCHIRA, KOZHIKODE 673 001 3 THE PRINCIPAL COMMISSIONER OF INCOME TAX AAYAKAR BHAVAN, NORTH BLOCK, MANANCHIRA KOZHIKODE 673 001 SC SRI. CHRISTOPHER ABRAHAM., SC,SRI.JOS WINSON THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.04.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 11066 of 2019 2

JUDGMENT Heard the learned counsel for the petitioner and the learned counsel for the respondents.

2.

The Writ Petition is filed challenging Ext.P7 order passed by the 2nd respondent. The petitioner filed Ext.P6 stay petition before the 2nd respondent. The subject matter of appeal is the assessment year 2015-2016. The 2nd respondent allowed the application for granting stay. However, subject to the condition of the petitioner paying or depositing 20% of the total tax demanded for the assessment year in question, the petitioner challenges Ext.P7 on the condition of 20% as onerous and the Ext.P7 order fails to take note of the grounds urged by the appellant.

3.

The learned counsel for the petitioner, by referring to various grounds, raised against the order under appeal tries to persuade this Court that this is a fit case for granting stay without imposing any condition. He prays for setting aside Ext.P7 and allowing the Writ Petition.

4.

Mr.Abraham, learned counsel appearing for the respondents, sustains the order by contending that the 2nd respondent exercised the jurisdiction in the right perspective and no exception can be taken to the condition of directing the petitioner to deposit 20% of the tax demanded for the year 2015-2016. The counsel strongly relies on the reasoning given by the 2nd respondent in paragraph 4 of Ext.P7 and prays for dismissing the writ petition. He alternatively contends that the appeal could be directed to be disposed of expeditiously and the petitioner can be put to some reasonable condition in the place of 20%.

5.

Controversy centers round the condition imposed by the 2nd respondent in Ext.P7. This Court, prima facie, does not see illegality in the exercise of discretion warranting judicial review in the present writ petition. The circumstances which are stated in the writ affidavit as well as before the 2nd respondent however persuade this Court to substitute 20% condition imposed by the 2nd respondent with 10% payable within 45 days from today. The petitioner enjoys the benefit of stay order subject to complying with this condition within the time stipulated by this Court. In default of complying with the condition without reference to the Court, it shall be presumed that the stay order is not in operation. Further the 2nd respondent considers and disposes of the appeal within four months from today. The Writ Petition is disposed of accordingly. Sd/-S

S.V.BHATTI, JUDGE To Judge

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE DISSOLUTION DEED DATED 21-06-2017 DISSOLVING THE FIRM M/S. ANASHWARA SILKS AND SAREES. EXHIBIT P2 TRUE COPY OF THE PENALTY ORDER DATED 24-05-2018 ISSUED UNDER SECTION 271(1) OF THE ACT BY THE 1ST RESPONDENT FOR THE AY 2015-16 EXHIBIT P3 COPY OF THE STATUTORY FIRST APPEAL FILED BY THE PETITIONER FOR THE ASSESSEE M/S. ANASHWARA SILKS AND SAREES BEFORE THE SECOND RESPONDENT FOR THE AY 2014-15 EXHIBIT P4 TRUE COPY OF THE LETTER DATED 23-10-2018 ISSUED BY THE 1ST RESPONDENT EXHIBIT P5 TRUE COPY OF THE STAY PETITION FILED BEFORE THE 3RD RESPONDENT EXHIBIT P6 TRUE COPY OF THE STAY PETITION FILED BEFORE THE 2ND RESPONDENT FOR THE AY 2015-16 EXHIBIT P7 TRUE COPY OF THE ORDER DATED 11-3-2019 PASSED BY THE 2ND RESPONDENT DISPOSING EXHIBIT P-6 STAY PETITION FOR THE AY 2015-16 EXHIBIT P8 TRUE COPY OF THE ORDER DATED 25-3-2019 PASSED BY THE 3RD RESPONDENT ON EXHIBIT P-5 STAY PETITION. sd

Recent GST High Court judgments

Search GST case law →