THE NATTIKA SERVICE CO-OPERATIVE BANK LTD vs. THE COMMISSIONER OF INCOME TAX (APPEALS),

PDF · subscribers
WP(C)/7920/2020HC KeralaKLHC01020664202013 March 2020Author: HONOURABLE MR.JUSTICE V.G.ARUN5 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court of Kerala, in light of a Division Bench decision in W.A.No. 1529 of 2019 and connected cases, which considered the peculiar aspects and a Full Bench decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287], held that the insistence for payment of 20% of the tax assessed while the appeal is pending is unsustainable. The demand for remittance of 20% of the tax assessed pending consideration of the appeals was deemed illegal. Consequently, the Court directed the first respondent (Commissioner of Income Tax (Appeals)) to consider the petitioner's appeals expeditiously. Further, all recovery proceedings based on the assessment orders, including the demand for 20% of the tax, were ordered to be kept in abeyance until the appeals are decided.

What were the facts?

The petitioner, The Nattika Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society. It is aggrieved by assessment orders for assessment years 2012-2013 and 2017-2018. The petitioner filed appeals and stay petitions before the Commissioner of Income Tax (Appeals). However, notices were issued demanding remittance of 20% of the disputed tax due. The writ petition seeks expeditious consideration of the appeals and stay petitions, and a stay on recovery proceedings, including the insistence to pay 20% of the disputed tax.

What were the issues?

1. Whether the insistence on remittance of 20% of the tax due, while an appeal against the assessment order is pending, is legally sustainable? Assessee's Contention: The petitioner argued that the demand for 20% of the disputed tax, pending the appeal and stay petition, is an impediment to the expeditious disposal of their grievances. They sought a stay on recovery proceedings and the 20% demand. Revenue's Contention: The revenue, represented by the Standing Counsel, was heard. The judgment does not explicitly detail the revenue's specific arguments regarding the 20% demand, but their presence indicates they were part of the proceedings.

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 V.G.ARUN FRIDAY, THE 13TH DAY OF MARCH 2020 / 23RD PHALGUNA, 1941 WP(C).No.7920 OF 2020(L) PETITIONER/S: THE NATTIKA SERVICE CO-OPERATIVE BANK LTD NATTIKA.P.O., THRISSUR-680 566, REPRESENTED BY ITS SECRETARY BY ADV. SRI.P.C.SASIDHARAN RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX (APPEALS), AAYAKAR BHAVAN, S.T.NAGAR, THRISSUR-680 001 2 THE INCOME TAX OFFICER, WARD 2,GURUVAYOOR, THRISSUR, OFFICE OF THE INCOME TAX OFFICER, WEST NADA, GURUVAYOOR, THRISSUR-680 101 OTHER PRESENT: SC JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.7920 of 2020 2 Dated this the 13th day of March, 2020

JUDGMENT The petitioner, a Primary Agricultural Credit Society, is aggrieved by Exts.P1 and P7 assessment orders for the years 2012-2013 and 2017-2018 respectively. The petitioner preferred Exts.P4 and P9 appeals along with Exts.P6 and P11 stay petitions. Exts.P5 and P10 notices demanding remittance of 20% of the tax due, which is in dispute before the respondents. The prayer in the writ petition is for expeditious consideration of either the appeals or the stay petitions and to stay the recovery proceedings including the insistence to pay 20% of the amount as demanded under Exts.P5 and P10. 2. The issue regarding imposition of the condition of remittance of 20% of the tax demanded was considered and decided by the Division Bench of this Court and as per the judgment in W.A.No. 1529 of 2019 and connected cases. After taking note of the peculiar aspects involved and the decision of the Full Bench in Mavilayi Service Co- operative Bank Ltd. v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287], the Division Bench held the insistence for payment of 20% of the tax assessed, while the appeal against the assessment order is pending, to be bad.

3.

Heard the learned Standing Counsel for the Income Tax Department also. In the light of the Division Bench decision, the demand for remittance of 20% of the tax assessed pending consideration of the appeals, is illegal. The writ petition is therefore disposed of, directing the first respondent to consider Exts.P4 and P9 appeals filed by the petitioner, as expeditiously as possible. In the meanwhile, further proceedings for recovery based on Exts.P1 and P7 assessment orders, including the demand under Exts.P5 and P10, shall be kept in abeyance. V.G.ARUN JUDGE Scl/13.03.2020

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 5.11.2019 EXHIBIT P2 TRUE COPY OF THE COMPUTER SHEET EXHIBIT P3 TRUE COPY OF THE DEMAND NOTICE DATED 5.11.2019 EXHIBIT P4 TRUE COPY OF THE APPEAL DATED 9.12.2019 EXHIBIT P5 TRUE COPY OF THE ORDER DATED 17.1.2020 EXHIBIT P6 TRUE COPY OF THE STAY PETITION DATED 24.1.2020 EXHIBIT P7 TRUE COPY OF THE ASSESSMENT ORDER DATED 7.11.2019 EXHIBIT P8 TRUE COPY OF THE DEMAND NOTICE DATED 7.11.2019 EXHIBIT P9 TRUE COPY OF THE APPEAL DATED 22.11.2019 EXHIBIT P10 TRUE COPY OF THE ORDER DATED 17.1.2020 EXHIBIT P11 TRUE COPY OF THE STAY PETITION DATED 24.1.2020 EXHIBIT P12 TRUE COPY OF THE JUDGMENT DATED 1.7.2019 IN W.A.NO.1536 OF 2019

Recent GST High Court judgments

Search GST case law →