POABS ENTERPRISES PRIVATE LIMITED vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

PDF · subscribers
WP(C)/18369/2020HC KeralaKLHC01045987202018 September 2020Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court acknowledged that while there might be some justification for the Commissioner of Income Tax (Appeals) to pass the order cancelling the stay (Ext.P11) without hearing the petitioner, the appeals themselves had been pending since 2018. Considering the delay, the Court decided not to delve into the legality of Ext.P11 or Ext.P10. Instead, the Court quashed Ext.P11 solely to facilitate the expeditious disposal of the pending appeals (Exts.P5 and P6). The Commissioner of Income Tax (Appeals) was directed to decide these appeals within three months of receiving the judgment, after hearing the petitioner. The interim stay granted by Ext.P10 was ordered to remain in effect until the appellate authority passed its final orders and communicated them to the petitioner.

What were the facts?

The petitioner, Poabs Enterprises Private Limited, filed a writ petition before the High Court of Kerala challenging an order (Ext.P11) passed by the Commissioner of Income Tax (Appeals) which cancelled a prior stay order (Ext.P10). The original stay order had halted the recovery of disputed amounts pending the disposal of the petitioner's appeal. The petitioner contended that Ext.P11 was passed without affording them a hearing, thus violating principles of natural justice. The Income Tax Department argued that the stay was granted based on a misrepresentation of facts by the petitioner's representative, justifying the cancellation without a hearing.

What were the issues?

1. Whether the order cancelling the stay (Ext.P11) is vitiated due to non-compliance with the rules of natural justice, as it was passed without hearing the petitioner? Assessee's Contention: The petitioner argued that Ext.P11, which cancelled the stay order, was passed without providing them an opportunity to be heard, thereby violating the principles of natural justice. Revenue's Contention: The respondent Income Tax Department contended that the earlier stay order (Ext.P10) was obtained based on a misrepresentation of facts by the petitioner's representative. Therefore, the non-compliance with natural justice principles in passing Ext.P11 could not be cited to invalidate the order.

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 A.K.JAYASANKARAN NAMBIAR FRIDAY, THE 18TH DAY OF SEPTEMBER 2020 / 27TH BHADRA, 1942 WP(C).No.18369 OF 2020(U) PETITIONER/S: POABS ENTERPRISES PRIVATE LIMITED KUTTOOR P.O, THIRUVALLA 689 106, PATHANAMTHITTA DISTRICT, REPRESENTED BY ITS MANAGING DIRECTOR SRI JOSEPH JACOB. BY ADV. SRI.N.JAMES KOSHY RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX (APPEALS) INCOME TAX DEPARTMENT, KOTTAYAM 686 001 2 THE ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX DEPARTMENT, CIRCLE 1, THIRUVALLA, VAISHNAVAM ARCADE, T.K ROAD, THIRUVALLA 689 101 R1-2 BY ADV. SRI.P.K.RAVINDRANATHA MENON (SR.) R1-2 BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.09.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.18369 of 2020 2

JUDGMENT The petitioner has approached this Court aggrieved by Ext.P11 order of the 1st respondent, which cancelled an earlier stay order (Ext.P10) that was passed staying the recovery of disputed amounts pending disposal of an appeal preferred by the petitioner. In the Writ Petition, it is the case of the petitioner that Ext.P11 order was passed by the 1st respondent without hearing him, and therefore, the said order is vitiated on account of a non-compliance of the rules of natural justice. Countering the said submission, it is the submission of the learned Senior counsel for the respondent Income Tax Department Sri.Raveendranadha Menon, that inasmuch as the finding in Ext.P11 order is that the earlier stay order was passed based on a mis- representation of facts by the representative of the petitioner assessee, the non-compliance with the rules of natural justice cannot be cited as an instance to vitiate the order passed. Taking note of the rival submission, I find that although there may be some justification in the 1st respondent passing Ext.P11 order without hearing the petitioner, the appeal in which Ext.P10 and P11 orders were passed has been pending since 2018 and, at this distance of time it may not be necessary to go into the legality of Ext.P11 order or Ext.P10 order as the case may be, I therefore quash Ext.P11 order for the limited purpose of enabling an expeditious disposal of the Exts.P5 and P6 appeals by the 1st respondent appellate authority. The 1st respondent is directed to consider and pass orders on Exts.P5 and P6 appeals within an outer time limit of three months from the date of receipt of a copy of this judgment, after hearing the petitioner. The interim stay granted by Ext.P10 order shall continue to remain in force till such time as the 1st respondent passes orders as directed in the appeal and communicates the same to the petitioner. The Writ Petition is disposed as above. A.K.JAYASANKARAN NAMBIAR

JUDGE mns/18.9.2020

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ORDER F.NO. PR.CIT/KTM/TECH/263(ACIT-TVLA) 2018-19 DATED 25-03- 2019 ISSUED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX, KOTTAYAM TO THE PETITIONER. EXHIBIT P2 TRUE COPY OF THE PENALTY ORDER DATED 28-06-2019 FOR THE ASSESSMENT YEAR 2015-16 ALONG WITH DEMAND NOTICE UNDER SECTION 156 OF INCOME TAX ACT ISSUED BY THE 2ND RESPONDENT TO PETITIONER. EXHIBIT P3 TRUE COPY OF THE ORDER F.NO. TVLA/C- 1/AAECP8969J/2015-16 DATED 04-09-2018 FOR ASSESSMENT YEAR 2015-16 ALONG WITH DEMAND OF NOTICE UNDER SECTION 156 OF THE INCOME TAX ACT ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P4 TRUE COPY OF NOTICE F.NO. AAECP8869J/C-1/TLA/2018-19 DATED 29-07-2017 ISSUED BY 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P5 TRUE COPY OF THE IT APPEAL NO. 983642451040818 DATED 04-08-2018 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT EXHIBIT P6 TRUE COPY OF THE IT APPEAL NO. 752817081020819 DATED 02-08-2019 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P7 TRUE COPY OF THE STAY PETITION IN IT APPEAL NO. 983642451040818 DATED 24-09-2019 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P7 A TRUE COPY OF THE STAY PETITION IN IT APPEAL NO. 752817081020819 DATED 24-09-2019 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P8 TRUE COPY OF THE JUDGMENT IN W.P(C) NO. 28369/2019 DATED 24-10-2019 OF THE HON'BLE HIGH COURT OF KERALA. EXHIBIT P9 TRUE COPY OF THE JUDGMENT IN W.P(C) NO. 28233/2019 DATED 24-10-2019 OF THE HON'BLE HIGH COURT OF WP(C).No.18369 of 2020 5 KERALA. EXHIBIT P10 TRUE COPY OF THE ORDER ON STAY PETITION ITA NO. CIT(A)/KTM/2019-20/983642451040818/300 DATED 04-12- 2019 OF THE 1ST RESPONDENT. EXHIBIT P11 TRUE COPY OF THE CANCELLATION ORDER ON STAY PETITION ITA NO. CIT(A)/KTM/2019-20/983642451040818/300 DATED 12-08-2020 OF THE 1ST RESPONDENT. EXHIBIT P12 TRUE COPY OF PETITION DATED 20-08-2020 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT IN ITA NO.9836424551040818. RESPONDENTS EXHIBITS:NIL //TRUE COPY// P.A TO JUDGE

Recent GST High Court judgments

Search GST case law →