ANNA ALUMINIUM COMPANY (P) LIMITED vs. THE DEPUTY COMMISSIONER OF INCOME TAX

PDF · subscribers
WP(C)/16654/2020HC KeralaKLHC01041878202013 August 2020Author: HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN5 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court allowed the writ petition and set aside Ext.P5. The Court held that the order was issued without proper application of mind, particularly the condition for stay related to the 'disputed demand till the decision of the appeal'. The primary reason for setting aside the order was the admitted fact that it was passed without affording the petitioner an opportunity of being heard. The Court explicitly stated that it was not entering into the merits of the contentions of the parties, leaving them open for reconsideration. The 2nd respondent (Commissioner of Income Tax (Appeals)) was directed to take up the petitioner's application for stay and issue orders thereon after providing the petitioner an opportunity of being heard, as expeditiously as possible. Until the stay application was considered, all further recovery actions were deferred. The Court also clarified that the hearing could be physical or through video conferencing due to COVID-19 restrictions.

What were the facts?

The petitioner, M/s. Anna Aluminium Company (P) Limited, filed a writ petition challenging an order, Ext.P5, issued by the Deputy Commissioner of Income Tax (respondent 1) and considered by the Commissioner of Income Tax (Appeals) (respondent 2). The primary grievance was that the order was passed without providing the petitioner an opportunity to be heard. The revenue's counsel admitted that the order was indeed issued without affording the petitioner a hearing. The High Court noted that Ext.P5 appeared to have been issued without proper application of mind, as it stated a stay was granted on the condition of paying the 'disputed demand till the decision of the appeal'. The Court found this to be an appropriate case to vacate the order and direct reconsideration.

What were the issues?

1. Whether Ext.P5 order, issued by the Commissioner of Income Tax (Appeals), is liable to be set aside for having been passed without affording the petitioner an opportunity of being heard, as mandated by principles of natural justice? Assessee's contention: The petitioner argued that Ext.P5 was passed without providing them with a proper hearing, violating fundamental principles of natural justice. They sought the quashing of this order. Revenue's contention: The Standing Counsel for the respondents admitted that Ext.P5 was issued without offering an opportunity of hearing to the petitioner. He submitted that if the Court was inclined, the 2nd respondent would reconsider the matter after providing such an opportunity.

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.16654 OF 2020(F) PETITIONER: M/S.ANNA ALUMINIUM COMPANY (P) LIMITED., KP 111 847, KIZHAKKAMBALAM, ALUVA, ERNAKULAM 683562, REPRESENTED BY ITS MANAGING DIRECTOR, SRI. BOBY M. JACOB. BY ADV. SRI.N.MURALEEDHARAN NAIR RESPONDENTS: 1 THE DEPUTY COMMISSIONER OF INCOME TAX CORPORATE CIRCLE, 1(1), 4TH FLOOR, CENTRAL REVENUE BUILDING, I.S PRESS ROAD, KOCHI 682 018 2 THE COMMISSIONER OF INCOME TAX (APPEALS)-I, INCOME TAX DEPARTMENT, G-51 PARAPILLY LANE, MANORAMA JUNCTION, GIRINAGAR, PANAMPILLY NAGAR, KOCHI 682 036 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.16654 OF 2020 2

JUDGMENT The petitioner impugns Ext.P5 order on various grounds, but primarily that no opportunity of being heard had been offered to them before the same had been issued.

2.

Shri.Jose Joseph, learned Standing Counsel for the respondents, admitted that Ext.P5 has been issued without offering opportunity of being heard to the petitioner; and therefore, submitted that if this Court is so inclined, the 2nd respondent will reconsider the matter, after such opportunity is given to them.

3.

When I go through Ext.P5, it is clear that the said order has been issued without proper application of mind, because what is stated therein is that a stay has been granted on condition of payment of 'disputed demand till the decision of the appeal'. Obviously, therefore, this is an eminently fit case where this Court also feels that WP(C).No.16654 OF 2020 3 Ext.P5 order should be vacated and the Authority be directed to reconsider the stay petition in terms of law. In the afore circumstances, I allow this writ petition and set aside Ext.P5, without entering into the merits of the contentions of the parties and leaving all of them open; with a consequential direction to the 2nd respondent to take up the application for stay preferred by the petitioner and issue orders thereon, after affording them an opportunity of being heard, as expeditiously as is possible. Needless to say, until such time as the application for stay is considered by the 2nd respondent, all further action to recover amounts as per the demand will stand deferred. It is further clarified, at the request of the learned Standing Counsel for the respondents, that the hearing offered to the WP(C).No.16654 OF 2020 4 petitioner can either be physical or through video conferencing, on account of the COVID- 19 pandemic restrictions. This writ petition is thus ordered. DEVAN RAMACHANDRAN JUDGE MC/19.8.2020

WP(C).No.16654 OF 2020 5

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER PASSED BY 1ST RESPONDENT FOR THE YEAR 2017-18 DATED 23-12-2019 EXHIBIT P2 TRUE COPY OF THE DEMAND NOTICE DATED 23-12- 2019 ISSUED BY 1ST RESPONDENT EXHIBIT P3 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 14-01-2020 EXHIBIT P4 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 17-02-2020 EXHIBIT P5 TRUE COPY OF THE STAY ORDER PASSED BY THE 2ND RESPONDENT DATED 04-08-2020 RESPONDENT'S/S EXHIBITS: NIL MC (TRUE COPY) PA TO JUDGE

Recent GST High Court judgments

Search GST case law →