VICHUS CONSTRUCTIONS AND HOTELS PRIVATE LIMITED vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/17777/2019HC KeralaKLHC01045542201901 July 2019Bench: HONOURABLE MR.JUSTICE S.V.BHATTI4 pages

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What did the High Court hold?

The High Court, perusing the assessment order, appeals, and stay petitions, found a prima facie case for issuing necessary directions to the appellate authority to dispose of the stay petitions. The Court acknowledged the limited prayer and the grounds presented by the petitioner. Consequently, the Court directed the appellate authority (2nd respondent) to consider and dispose of the stay applications (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 order. No issue was expressly left undecided.

What were the facts?

The petitioner, Vichus Constructions and Hotels Private Limited, filed appeals against assessment orders under Section 25(1) of the KVAT Act. Aggrieved by the delay in the disposal of their stay petitions (Ext.P3) by the appellate authority (2nd respondent), the petitioner filed a writ petition seeking directions for expeditious consideration. The petitioner argued that the delay in deciding stay petitions allows the assessing officer to initiate recovery proceedings, potentially rendering the statutory appeal ineffective. They contended that the law mandates prompt disposal of stay applications to protect the appellant's interests pending appeal. The petitioner sought directions for the appellate authority to dispose of the stay petitions and for a temporary stay on coercive recovery steps.

What were the issues?

1. Whether the appellate authority should be directed to expeditiously consider and dispose of the stay petitions filed by the petitioner pending their appeals? Assessee's Contention: The petitioner argued that the mere filing or pendency of an appeal does not automatically grant a stay. They contended that significant delays in disposing of stay petitions by the appellate authority allow the assessing officer to take recovery steps, which could render the statutory appeal academic or ineffective. The petitioner emphasized that the law provides for the protection of an appellant's interest pending appeal, necessitating prompt disposal of stay orders. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the delay in disposing of stay petitions or the merits of the stay sought.

Which sections of the Income-tax Act were involved?

25(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI MONDAY, THE 01ST DAY OF JULY 2019 / 10TH ASHADHA, 1941 WP(C).No.17777 of 2019 PETITIONER/S: VICHUS CONSTRUCTIONS AND HOTELS PRIVATE LIMITED FLAT NO.2A, 2ND FLOOR, GOLDEN METRO APTS, NEAR PETTAH BRIDGE, TRIPUNITHURA - 682 301. REPRESENTED BY ITS MANAGING DIRECTOR SHRI K. V. JOSE BY ADV. SRI.K.S.HARIHARAN NAIR RESPONDENT/S: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX CORPORATE CIRCLE - 2(1), KOCHI, CENTRAL REVENUE BUILDINGS, I. S. PRESS ROAD, ERNAKULAM - 682 018 2 THE COMMISSIONER OF INCOME TAX (APPEALS) PARAPILLY LANE, MANORAMA JUNCTION, GIRI NAGAR, PANAMPILLY NAGAR, KOCHI, KERALA - 682 036 SRI JOSE JOSEPH, STANDING COUNSEL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01.07.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.17777 of 2019 2 JUDGMENT The petitioner filed appeals in Ext.P2 aggrieved by the orders of assessment in Exts.P1 made under Section 25(1) of the KVAT Act. The petitioner prays for appropriate direction to the appellate authority to consider and dispose of Exts.P3 stay petition expeditiously. 2. 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 assessing authority. The delay in considering and disposing of Exts. P3 stay petition results in the assessing officer taking steps for recovering the tax amount which is under challenge in Ext.P2 appeal. 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 orders on stay petition is passed expeditiously. Hence the writ petition. 3. Perused Ext.P1 assessment order, Exts.P2 appeal

WP(C).No.17777 of 2019 3 and Exts.P3 stay petition. 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 stay petition. 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 stay applications 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. Sd/- S.V.BHATTI ajt JUDGE

WP(C).No.17777 of 2019 4 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ORDER DATED 27.12.2018 ISSUED BY THE 1ST RESPONDENT FOR THE ASSESSMENT YEAR 2013-14. EXHIBIT P2 COPY OF APPEAL MEMORANDUM DATED 31.1.2019 AGAINST EXT.P1. EXHIBIT P3 COPY OF THE STAY PETITION FILED BY THE PETITIONER FOR THE ASSESSMENT YEAR 2013-14 BEFORE THE 2ND RESPONDENT DATED 26.6.2019.

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