SHAMEEM THARI vs. INCOME TAX OFFICER, CENTRAL CIRCLE 1, KOZHIKODE

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WA/1872/2023HC KeralaKLHC01080191202331 October 2023Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR,HONOURABLE DR. JUSTICE KAUSER EDAPPAGATH4 pages
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What did the High Court hold?

The High Court modified the judgment of the learned Single Judge. While upholding the direction to consider the stay petitions, the High Court clarified that pending the disposal of the stay petitions or the appeals (whichever is earlier) by the appellate authority, the recovery proceedings against the appellant for the amounts confirmed by the assessment orders (Ext.P1 series) shall be kept in abeyance. The Court reasoned that since the learned Single Judge had relegated the appellant to the alternate remedy before the statutory authority, it was incumbent upon the Judge to protect the appellant from recovery proceedings during the pendency of those petitions. The rest of the directions in the impugned judgment were not interfered with. The ratio is that when an assessee is pursuing statutory remedies like appeals and stay petitions, and recovery is imminent, the High Court can grant a stay on recovery pending the disposal of those remedies to protect the assessee's interests.

What were the facts?

The appellant, Shameem Thari, filed a writ petition challenging assessment orders (Ext.P1 series) and facing recovery steps. He had filed appeals and stay petitions (Ext.P2 and Ext.P3 series) for assessment years 2018-2019 to 2021-2022 before the National Faceless Appeal Centre (NFAC). The appellant apprehended that recovery proceedings would be initiated before his stay petitions were considered. The learned Single Judge directed the respondents to consider the stay petitions but did not grant a stay on recovery proceedings. The appellant is before the High Court in appeal against this judgment.

What were the issues?

1. Whether the High Court, in its writ jurisdiction, should grant a stay of recovery proceedings when the assessee has filed appeals and stay petitions before the statutory appellate authority? (Question of law and fact, concerning the powers of the High Court under Article 226 of the Constitution of India and the principles of alternative remedy). Assessee's Contention: The appellant argued that recovery steps were being initiated before the consideration of his stay petitions, and he sought protection from such proceedings pending the disposal of his appeals and stay petitions. The appellant relied on the principle that a party should not be prejudiced by the delay in the disposal of their statutory remedies. Revenue's Contention: The judgment does not record any specific arguments made by the revenue before the High Court. However, the Single Judge's order, which the revenue likely supported, directed consideration of stay petitions but not an outright stay of recovery.

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 DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE DR. JUSTICE KAUSER EDAPPAGATH TUESDAY, THE 31ST DAY OF OCTOBER 2023 / 9TH KARTHIKA, 1945 WA NO. 1872 OF 2023 AGAINST THE JUDGMENT DATED 18.10.2023 IN WP(C) 34385/2023 OF HIGH COURT OF KERALA APPELLANT/WRIT PETITIONER: SHAMEEM THARI AGED 41 YEARS S/O ABDUL KAREEM THARI, THARI HOUSE CHENDAPURAYA, ABDU RAHIMAN NAGAR P O, ABDU RAHIMAN NAGAR, MALAPPURAM, KERALA, PIN – 676305 BY ADVS. M.P.SHAMEEM AHAMED AKHIL PHILIP MANITHOTTIYIL DANIYA RASHEED PALLIYALIL NAEEM M.M MUHAMMED FIRDOUZ A.V. RESPONDENTS: 1 INCOME TAX OFFICER, CENTRAL CIRCLE 1, KOZHIKODE AAYAKAR BHAVAN, NORTH BLOCK, NEW ANNEXE BUILDING, MANANCHIRA, KOZHIKODE, KERALA, PIN – 673001 2 THE NATIONAL FACELESS APPEAL CENTRE (NFAC) INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, C-BLOCK, 4TH FLOOR, S.P.M. CIVIC CENTER, NEW DELHI, PIN - 110001 BY SRI.JOSE JOSEPH,SC THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 31.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: :2: W.A.No.1872 of 2023

JUDGMENT Dr. A.K.Jayasankaran Nambiar, J. The petitioner in WP(C).No.34385 of 2023 is the appellant herein aggrieved by the judgment dated 18.10.2023 in the Writ Petition. The brief facts necessary for disposal of this Writ Appeal are as follows:

2.

The appellant had impugned Ext.P1 series of assessment orders before this Court in the Writ Petition when confronted with recovery steps for recovery of the amounts confirmed against him by the assessment orders. It was the case of the appellant that against Ext.P1 series of assessment orders he has preferred Ext.P2 series of appeals and Ext.P3 series of stay petitions for the assessment years 2018-2019 to 2021-2022 under the Income Tax Act. The apprehension of the appellant was that even before consideration of the stay petitions there would be recovery steps initiated by the respondents for recovery of the amounts confirmed against the appellant by Ext.P1 series of assessment orders.

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3.

The learned Single Judge who considered the matter directed the respondents to consider and pass orders on the stay petitions if it was not possible to finally hear the appeals expeditiously. The learned Single Judge, however, did not grant a stay of recovery proceedings pending disposal of the stay petitions by the respondents. It is for this limited relief that the appellant is before us through the present appeal.

4.

We have heard Sri.M.P.Shameem Ahamed, the learned counsel for the appellant and Sri.Jose Joseph, the learned Standing counsel for the Income Tax Department.

5.

In our view, since the learned Single Judge had relegated the appellant to the alternate remedy before the statutory authority it was incumbent upon the learned Judge to protect the appellant from recovery proceedings pending disposal of the petitions by the respondent appellate authority. Accordingly, we modify the impugned judgment of the learned Single Judge to the limited extent of clarifying that pending disposal of the stay petitions or appeals whichever is earlier by the appellate authority, the recovery proceedings against the appellant for recovery of the amounts confirmed against him by Ext.P1 series of assessment orders shall be kept in abeyance. Save for this limited modification, the rest of the directions in the impugned

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judgment are not interfered with. DR. A.K.JAYASANKARAN NAMBIAR JUDGE DR. KAUSER EDAPPAGATH JUDGE mns

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