DURGA DISTRIBUTORS, vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/15130/2022HC KeralaKLHC01030395202204 May 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court, while acknowledging the pendency of appeals and stay applications, found merit in the petitioner's apprehension. The Court directed the second respondent (Commissioner of Income Tax (Appeals)) or the competent authority to consider the stay applications (Exts.P7 to P9) within a period of one month from the date of receipt of a copy of the judgment. This consideration was to be after affording an opportunity of hearing to the petitioner. Crucially, the Court ordered that no recovery steps shall be taken to recover the amounts due under the assessment orders (Exts.P1 to P3) until orders are passed on the stay applications. The principle established is that the appellate authority should consider stay applications expeditiously, and recovery should be deferred until such consideration, to prevent prejudice to the assessee.

What were the facts?

The petitioner, M/s. Durga Distributors, received assessment orders (Exts.P1 to P3) under the Income Tax Act. They filed appeals (Exts.P4 to P6) against these orders before the Commissioner of Income Tax (Appeals), the second respondent. Concurrently, stay applications (Exts.P7 to P9) were filed. The petitioner approached the High Court of Kerala apprehending that recovery steps would be initiated on the demands raised in the assessment orders before their stay applications could be considered and disposed of by the appellate authority. The assessment orders were passed by the Assistant Commissioner of Income Tax, Circle Central, Kottayam, the first respondent.

What were the issues?

1. Whether the High Court should entertain a writ petition to direct the appellate authority to consider pending stay applications and to restrain recovery proceedings until such applications are decided, when the primary appeals are also pending. (Question of mixed law and fact, concerning the scope of writ jurisdiction and procedural fairness). Assessee's Contention: The petitioner argued that they are apprehending recovery steps before their stay applications are considered, which would cause irreparable harm. They sought a direction for the expeditious disposal of stay applications and a stay on recovery until then. Revenue's Contention: The judgment records that the learned Standing Counsel for the respondents was heard. No specific arguments or reliance on authorities by the revenue are recorded in the judgment.

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 GOPINATH P. WEDNESDAY, THE 4TH DAY OF MAY 2022 / 14TH VAISAKHA, 1944 WP(C) NO. 15130 OF 2022 PETITIONER: M/S.DURGA DISTRIBUTORS, XXVII/225-10, KOICKAL BUILDINGS, MUTHOOR, THIRUVALLA-689 107, PATHANAMTHITTA DISTRICT, REPRESENTED BY ITS MANAGING PARTNER, ANIL KUMAR P. BY ADVS. HARISANKAR V. MENON MEERA V.MENON RESPONDENTS: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CENTRAL, KOTTAYAM-686 001. 2 COMMISSIONER OF INCOME TAX (APPEALS), PANAMPALLY NAGAR, ERNAKULAM, KOCHI-682 036. ADV.JOSE JOSEPH SMT.JASMIN M.M, GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.05.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 15130 OF 2022 2

JUDGMENT The petitioner suffered Exts.P1 to P3 assessment orders under the provisions of the Income Tax Act. The petitioner has preferred Exts.P4 to P6 appeals before the 2nd respondent challenging the same. Along with Exts.P4 to P6, the petitioner has also filed Exts.P7 to P9 stay applications, which are pending consideration before the 2nd respondent. The petitioner has approached this Court apprehending that before the stay applications are considered and orders passed thereon, recovery steps shall be initiated on the basis of the demands in Exts.P1 to P3. 2. Having heard the learned counsel for the petitioner and the learned Standing Counsel for the respondents, I am of the view that this writ petition can be ordered directing the 2nd respondent or the competent authority to consider Exts.P7 to P9 stay applications, after affording an opportunity of hearing to the petitioner, within a period of one month from the date of receipt of a copy of this judgment. Till such time as orders are passed

WP(C) NO. 15130 OF 2022 3 on Exts.P7 to P9 stay applications, no steps shall be taken to recover the amounts due under Exts.P1 to P3. This writ petition stands disposed of as above. GOPINATH P. JUDGE DK

WP(C) NO. 15130 OF 2022 4

Appendix — schedule of exhibits

APPENDIX OF WP(C) 15130/2022 PETITIONER EXHIBITS Exhibit P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2015-16 DATED 31.3.2022. Exhibit P2 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2016-17 DATED 31.3.2022. Exhibit P3 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2017-18 DATED 31.3.2022. Exhibit P4 COPY OF THE APPEAL FILED BY THE PETITIONER FOR THE YEAR 2015-16 BEFORE THE 2ND RESPONDENT DATED 21.4.2022. Exhibit P5 COPY OF THE APPEAL FILED BY THE PETITIONER FOR THE YEAR 2016-17 BEFORE THE 2ND RESPONDENT DATED 21.4.2022. Exhibit P6 COPY OF THE APPEAL FILED BY THE PETITIONER FOR THE YEAR 2017-18 BEFORE THE 2ND RESPONDENT DATED 21.4.2022. Exhibit P7 COPY OF STAY PETITION FILED BY THE PETITIONER FOR THE YEAR 2015-16 BEFORE THE 2ND RESPONDENT DATED 21.4.2022. Exhibit P8 COPY OF STAY PETITION FILED BY THE PETITIONER FOR THE YEAR 2016-17 BEFORE THE 2ND RESPONDENT DATED 21.4.2022. Exhibit P9 COPY OF STAY PETITION FILED BY THE PETITIONER FOR THE YEAR 2017-18 BEFORE THE 2ND RESPONDENT DATED 21.4.2022.

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