N. SHEELA vs. THE ASSISTANT COMMISSIONER OF INCOME TAX
What did the High Court hold?
The High Court, in its writ jurisdiction, set aside the impugned order (Ext.P16) based on a judgment of a Division Bench of the same court in WA No.1536/19. The Court remitted the matter back to the first respondent (Assistant Commissioner of Income Tax) with a direction to decide the appeal on its merits within a period of three months. Crucially, the appellate authority was directed not to insist on the payment of 20% of the demanded amount for adjudicating the appeal. The petitioner and the revenue were to be afforded an opportunity of hearing, and the decision was to be a reasoned and speaking order. The Court explicitly stated that it was disposing of the writ petition without commenting on the merits of the underlying assessment.
What were the facts?
The petitioner, N. Sheela, proprietrix of Swathi Exports, an assessee under the Income Tax Act engaged in exporting cashew kernels, filed a writ petition under Article 226 of the Constitution. The petition challenged Ext.P16, an order requiring her to pay 20% of a demand raised in a revised assessment order (Ext.P9) for entertaining her appeal. The petitioner argued that the revised assessment was erroneous and illegal, and that her financial condition was pitiable. The Income Tax authorities, represented by Sri. Christopher Abraham, stated they would not object to deciding an interim application if one were made. The High Court considered the matter after hearing both sides.
What were the issues?
1. Whether the requirement to pay 20% of the demand amount as a pre-condition for entertaining an appeal against a revised assessment order is legally sustainable, particularly in light of the petitioner's alleged pitiable financial condition? (Question of law and fact, concerning the powers of the appellate authority under the Income Tax Act). Assessee's Contentions: The petitioner argued that the demand raised in the revised assessment order was erroneous and illegal. She further contended that she was in a pitiable financial condition, implying that the pre-deposit requirement was unduly burdensome. The petitioner relied on the extraordinary jurisdiction of the High Court under Article 226. Revenue's Contentions: The revenue did not contest the maintainability of the writ petition and indicated through their counsel that they would not oppose the decision on an interim application if the petitioner made such a prayer. No specific arguments were recorded regarding the merits of the 20% pre-deposit requirement itself.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT Petitioner in the instant case has invoked extra ordinary juri iction of this court under Article 226 of the Constitution of India challenging Ext.P16, whereby for entertaining the appeal preferred against the revised assessment, petitioner has been called upon to pay 20% of the demand amount. The facts which emanate from the pleadings are: Petitioner is engaged in exporting of cashew kennels and he is an assessee under the Income Tax Act. He filed Income Tax Return before the Authorities which was found to be under scrutiny resulting into the reassessment order Ext.P9. Learned Counsel for the petitioner submits that the demand raised in the revised assessment is erroneous and illegal.
Challenging the aforementioned assessment order petitioner preferred appeal before the 1st respondent along with a stay application.
Learned Counsel for the petitioner submits that petitioner vide impugned order Ext.P16, has been called
WP(C).No.10170 OF 2020(U) 3 upon to pay 20% of the assessed amount for the purpose of adjudication of the appeal on merits. It is also contended that the accounts of the petitioner is also attached and he is in a pitiable condition.
Issue notice before admission.
Sri.Christopher Abraham accepts notice on behalf of the income tax authorities. He submits that the income tax authorities would not be averse in deciding the interim application if any such prayer is made by the petitioner.
Having heard learned Counsel for the parties and appraised the paper book, without commenting on the merits of the matter, I dispose of the writ petition with the following directions: 1. the impugned order, in view of judgment of Division Bench of this court in WA No.1536/19 is set aside.
The matter is remitted back to the 1st respondent to decide the appeal on merits within a period of three months, without asking for 20% of the demanded amount, after affording an opportunity of WP(C).No.10170 OF 2020(U) 4 hearing to the petitioner, including revenue by passing a reasonable and speaking order. AMIT RAWAL JUDGE JM/
WP(C).No.10170 OF 2020(U) 5
Appendix — schedule of exhibits
Recent GST High Court judgments
Search GST case law →- Kniit Net Industries Private Limited, Khurda vs. Superintendent Of CGST And Central Excise, Bhubaneswar Ii CircleOrissa · 14 Oct 2026
- M/S Maa Swarnapai Chemicals (Opc) Private Limited, Cuttack vs. Sales Tax Officer, Cuttack IOrissa · 14 Oct 2026
- M/S. Middlex, Puri vs. Commnr. Of State Tax, Banijyakar Bhawan, CuttackOrissa · 14 Oct 2026
- M/S Maa Sunadei Indane Gramin Vitrak, Nayagarh vs. Commissioner Of CT And GST, Cuttack, OdishaOrissa · 14 Oct 2026
- Sunanda Raul vs. The Commissioner Of Commercial Taxes And Goods Nad Services Tax, OdishaOrissa · 14 Oct 2026
