M/S KERALA STATE CO-OPERATIVE AGRICULTURAL/RURAL DEVELOPMENT BANK LTD vs. INCOME TAX OFFICER,
What did the High Court hold?
The High Court dismissed the writ petition. It held that the challenge to the demand notices (Exts.P1 and P2) was intrinsically linked to and dependent upon the challenge to the substantive assessment orders. Since the SLPs against the assessment orders were pending before the Supreme Court, any relief concerning the demand notices should be sought from the Supreme Court itself. The Court reasoned that entertaining the prayer for a stay of the demand notices would amount to the High Court dealing with recovery proceedings when the challenge to the assessment order had, as of that date, been unsuccessful. The petitioner was advised to seek necessary orders of stay from the Supreme Court where the matter was pending. Therefore, the Court was not persuaded to grant the limited prayer for a stay.
What were the facts?
The petitioner, M/s Kerala State Co-operative Agricultural & Rural Development Bank Ltd (KASCARD), filed a writ petition challenging demand notices (Exts.P1 and P2) issued by the Income Tax Officer and Deputy Commissioner of Income Tax. These notices pertain to assessment years 2012-2013 and 2014-2015. The petitioner had previously challenged the assessment orders, which were confirmed by the High Court. These confirmations led to Special Leave Petitions (SLPs) being filed by the petitioner, which are currently pending before the Supreme Court. The petitioner sought an interim stay of the demand notices until June 8, 2019.
What were the issues?
1. Whether the High Court, in its writ jurisdiction under Article 226 of the Constitution, can grant an interim stay of demand notices (Exts.P1 and P2) when the substantive challenge to the assessment orders is pending before the Supreme Court in SLPs? Assessee's Arguments: The petitioner contended that the circumstances were singular, compelling them to invoke the High Court's writ jurisdiction for interim relief. They argued that the High Court, under Article 226, could grant interim relief, subject to the final adjudication of the pending SLPs before the Supreme Court. They specifically prayed for a stay of Exts.P1 and P2 until June 8, 2019. Revenue's Arguments: The revenue argued that the invocation of the High Court's writ jurisdiction was misconceived. They contended that the petitioner was pursuing remedies under the Income Tax Act, and all ancillary prayers, including interim relief, should be sought within those proceedings. The revenue further argued that the High Court, even under Article 226, should not grant relief against demand notices that are dependent on the outcome of the substantive challenge to the assessment orders.
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
JUDGMENT Heard Sri. Jose Jacob, the learned counsel for the petitioner and Sri.Christopher Abraham, the learned Standing Counsel for the respondents.
The petitioner challenges Exts.P1 and P2 demand notices issued by 2nd respondent. The subject Matter of Exts.P1 and P2 is the demand for the assessment years 2012-2013 and 2014-2015. It is not in dispute that the challenge laid by the petitioner against the respective assessment orders is confirmed by this Court. The disposal of tax appeals lead to filing Special Leave Petitions and are pending in the Supreme court.
Sri.Jose Jacob, contends that the circumstances in the case on hand are singular and that the petitioner therefore is compelled to invoke the jurisdiction of this Court under Article 226 of the Constitution for interim relief. He elaborates his submission by arguing that this Court in exercise of its jurisdiction under Article 226 can certainly grant interim relief to the petitioner however the relief granted by this Court to the petitioner vis-a-vis Exts.P1 and P2 is subject to final adjudication of SLPs. Therefore he prays for stay of WP(C).No. 8161 of 2019 3 Exts.P1 and P2 for at least till Monday i.e, 08.06.2019. 4. Sri.Christopher Abraham, the learned Standing Counsel opposes the writ prayer and contends that the invocation of jurisdiction of this Court under Article 226 is completely misconceived the petitioner is working out the remedies of appeal under Income Tax Act, all the prayers ancillary and incidental to the substantive challenge should be obtained from the very proceeding in which the substantive issue is in challenge. He further contends that this Court even in exercise of its jurisdiction under Article 226 of the Constitution of India ought not to consider extending any relief against Exts.P1 and P2 because they are always dependent on the orders that may be passed in the substantive prayers made against the order of assessment. He prays for dismissing the writ petition. The rival submissions made at the Bar, are carefully considered by this Court. The circumstances are not in dispute and also that the SLP filed by the petitioner against the subject assessment year is pending before the Supreme Court. This Court is of the considered view that the challenge to Exts.P1 and P2 is always dependent on the challenge to substantive order of assessment and the reliefs that could be granted by either this Court when the tax appeal is entertained or WP(C).No. 8161 of 2019 4 by the Apex Court in the SLP filed against ITA. The prayer of the petitioner if is considered by this Court, I am afraid the same amounts to this Court entertaining Exts.P1 and P2 which are in the nature of recovery proceeding when the challenge for assessment order as on today is unsuccessful. The petitioner is better advised to move and also seek necessary orders of stay from the Supreme Court where the issue is pending. For the above reasons this court is not persuaded to the limited prayer of the petitioner but for the compelling reason referred to above. The writ petition fails and dismissed. S.V.BHATTI JUDGE Ac
WP(C).No. 8161 of 2019 5
Appendix — schedule of exhibits
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