THE MANALUR SERVICE CO-OPERATIVE BANK LTD.NO. 31 vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

WP(C)/16560/2020HC KeralaKLHC01041570202013 August 2020Author: HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN5 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court directed the first respondent, the Commissioner of Income Tax (Appeals), to take up and dispose of the appeals (Exts.P3 and P6) filed by the petitioner. The disposal is to be done after affording the petitioner an opportunity of being heard, either in person or through video conferencing, subject to COVID-19 pandemic restrictions. The appeals are to be disposed of expeditiously, but not later than four months from the date of receipt of a copy of the judgment. Crucially, the Court ordered that all recovery actions pursuant to the demand notices (Exts.P2 and P5) shall stand deferred until the appeals are finally disposed of. The Court found it unnecessary to enter into the merits of the writ petition given the pending statutory appeals. The ratio is that statutory appeals should be given due and expeditious consideration, and recovery should be stayed pending their disposal, especially when the appellate authority can dispose of them within a reasonable period.

What were the facts?

The petitioner, Manalur Service Co-operative Bank Ltd., a Primary Agricultural Credit Society, filed a writ petition challenging assessment orders (Exts.P1 and P4) and demand notices (Exts.P2 and P5). The petitioner acknowledged filing appeals (Exts.P3 and P6) before the Commissioner of Income Tax (Appeals), the first respondent. The petitioner sought a direction for the Commissioner to decide these appeals within a timeframe and for a stay on recovery proceedings until then. The Income Tax Officer, Ward 2(3), Thrissur, is the second respondent. The Standing Counsel for the respondents indicated that the appeals could be disposed of within four months but requested a partial deposit of the demand.

What were the issues?

1. Whether the High Court should direct the Commissioner of Income Tax (Appeals) to dispose of the pending appeals within a specified time frame, and if so, what should that time frame be? (Question of procedure and administrative efficiency). The petitioner argued for a direction to expedite the disposal of their appeals and to stay recovery proceedings. The revenue, through its Standing Counsel, agreed to dispose of the appeals within four months but sought a direction for the petitioner to deposit a part of the demand. The revenue did not explicitly argue against the direction for expeditious disposal but sought a condition for it.

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 DEVAN RAMACHANDRAN THURSDAY, THE 13TH DAY OF AUGUST 2020 / 22ND SRAVANA, 1942 WP(C).No.16560 OF 2020 PETITIONER: THE MANALUR SERVICE CO-OPERATIVE BANK LTD.NO. 31 MANALUR, THRISSUR-680 617, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.P.C.SASIDHARAN RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX (APPEALS) AAYAKAR BHAVAN, S.T.NAGAR, THRISSUR-680 001. 2 THE INCOME TAX OFFICER WARD 2(3), THRISSUR, SHAKTHANTHAMPURAM NAGAR, THRISSUR-680 001. OTHER PRESENT: JOSE JOSEPH S.C FOR I.T THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.08.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.16560 OF 2020 2

JUDGMENT The Manalur Service Co-operative Bank Ltd., which is a Primary Agricultural Credit Society registered under the provisions of the Kerala Co-Operative Societies Act and Rules, has filed this writ petition impugning Exts.P1 and P4 Assessment Orders and Exts.P2 and P5 Demand Notices, on various grounds. They, however, concede that they have preferred Exts.P3 and P6 appeals before the 1st respondent-Commissioner; and they thus alternatively pray that the said Authority be directed to consider the same within a time frame to be fixed by this Court, further praying that until such time, recovery as per the impugned orders and Demand Notices be stayed.

Shri.Jose Joseph, learned Standing Counsel appearing for the respondents, submits that the appeals can be disposed of within a period of four months, but prays that the petitioner be directed to deposit a WP(C).No.16560 OF 2020 3 part of the demand made through Exts.P2 and P5 Demand Notices.

When I hear Shri.Jose Joseph as afore, it is obvious that it may not be necessary for this Court to enter into the merits of the allegations and averments in this writ petition, since the statutory appeals are still pending, which the 1st respondent submits can be disposed of within a period of four months.

I am, therefore, certainly of the view that this Court will be justified in directing the 1st respondent to do so, however, without allowing any recovery in the meanwhile, since this Court has already granted orders against recovery in similar matters. In the afore circumstances, this writ petition is ordered, directing the 1st respondent to take up Exts.P3 and P6 appeals and to dispose of the same, after affording

WP(C).No.16560 OF 2020 4 necessary opportunities of being heard to the petitioner, either personally or through video conferencing subject to the COVID-19 pandemic restrictions, as expeditiously as is possible, but not later than four months from the date of receipt of a copy of the judgment. Needless to say, until such time as the appeals are finally disposed of, all action for recovery of the amounts pursuant to Exts.P2 and P5 notices shall stand deferred and will be subject to the decision to be taken by the Appellate Authority. DEVAN RAMACHANDRAN JUDGE MC/17.8.2020

WP(C).No.16560 OF 2020 5

Appendix — schedule of exhibits

APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 5.12.2016 (2009-2010) EXHIBIT P2 TRUE COPY OF THE DEMAND NOTICE DATED 5.12.2016 TO THE MANALUR SERVICE CO.OP.BANK. EXHIBIT P3 TRUE COPY OF THE APPEAL DATED 21.1.2017 TO THE COMMISSIONER OF INCOME TAX. EXHIBIT P4 TRUE COPY OF THE ASSESSMENT ORDER DATED 23.12.2019 (2017-2018). EXHIBIT P5 TRUE COPY OF THE DEMAND NOTICE DATED 23.12.2019 TO THE MANALUR SCB. EXHIBIT P6 TRUE COPY OF THE APPEAL DATED 15.2.2020 TO THE COMMISSIONER OF INCOME TAX. EXHIBIT P7 TRUE COPY OF THE JUDGMENT DATED 1.7.2019 IN W.A.NO.1536 OF 2019. MC (TRUE COPY) PA TO JUDGE

Recent GST High Court judgments

Search GST case law →