KERALA STATE BEVERAGES (MANUFACTURING AND MARKETING) CORPORATION LTD. vs. PRINCIPAL COMMISSIONER OF INCOME TAX,

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WP(C)/8137/2019HC KeralaKLHC01020764201925 October 2019Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR13 pages
AI SummaryRemanded

What did the High Court hold?

The High Court directed the Appellate Tribunal and the Commissioner of Income Tax (Appeals) to pass final orders expeditiously in the pending appeals and miscellaneous applications. The Court acknowledged that for assessment years 2014-15 and 2015-16, the ITAT had heard the appeals and was taking them up for orders after allowing review petitions. For assessment year 2016-17, the appeal was pending before the First Appellate Authority. The Court ordered that the stay against recovery proceedings granted by the High Court would continue to operate in favour of the petitioner until final orders were passed by the appellate authorities and communicated to the petitioner. The operative direction was to expedite the disposal of pending appeals.

What were the facts?

The petitioner, Kerala State Beverages (Manufacturing and Marketing) Corporation Ltd., filed three writ petitions challenging revenue recovery actions initiated by the Income Tax Department for assessment years 2014-15, 2015-16, and 2016-17. For 2014-15 and 2015-16, appeals were pending before the Income Tax Appellate Tribunal (ITAT). For 2016-17, an appeal was pending before the Commissioner of Income Tax (Appeals), and a stay application had been rejected. The petitioner's grievance was that recovery proceedings were initiated while their appeals were pending. The High Court had initially granted a stay on recovery. Subsequently, the ITAT dismissed the appeals for 2014-15 and 2015-16, but review petitions were allowed, and the appeals were relisted for orders. Recoveries made were appropriated against the tax liability for 2016-17.

What were the issues?

1. Whether the revenue recovery action initiated by the respondents was justified when appeals against assessment orders were pending before appellate authorities, specifically the ITAT and the Commissioner of Income Tax (Appeals)? (Question of law and fact, concerning the procedural fairness and legality of recovery proceedings under the Income Tax Act). Assessee's contention: The revenue recovery action was premature and unjustified as appeals were pending before the statutory appellate authorities. The petitioner relied on the interim stay granted by the High Court. Revenue's contention: The judgment does not record specific contentions from the revenue regarding the justification of recovery proceedings. However, their participation in the proceedings implies a stance that recovery was permissible.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH-682030.

Heard together (3 matters)

WP(C).No.8137 OF 2019
WP(C).8138/2019
WP(C).8166/2019

Read from the judgment's own cause title. This page is filed under one of them.

DT.9.11.2018 ISSUED BY THE RESPONDENT EXHIBIT P11OF THE REPLY ISSUED BY THE RESPONDENT DATED 29.3.2019 EXHIBIT P12OF LETTER DATED 12.4.2019 SUBMITTED BY THE PETITIONER :11: APPENDIX OF WP(C) 8138/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1OF ORDER DATED 28.12.2017 SERVED ON THE PETITIONER BY THE FIRST RESPONDENT. EXHIBIT P2OF THE JUDGMENT DATED 26.6.2018 IN WRIT APPEAL NO.1007 OF 2018. EXHIBIT P3OF THE FIRST APPELLATE ORDER DATED 5.11.2018. EXHIBIT P4OF THE JUDGMENT DATED 26.2.2019 IN WRIT PETITION NO.37083 OF 2018. EXHIBIT P5OF NOTICE UNDER SECTION 226(3) DATED 15.3.2019 ISSUED TO 4TH RESPONDENT. EXHIBIT P6OF NOTICE UNDER SECTION 226(3) DATED 15.3.2019 ISSUED TO 5TH RESPONDENT. EXHIBIT P7OF NOTICE UNDER SECTION 226(3) DATED 15.3.2019 ISSUED TO 6TH RESPONDENT. EXHIBIT P8OF NOTICE UNDER SECTION 226(3) DATED 15.3.2019 ISSUED TO 7TH RESPONDENT. EXHIBIT P9OF NOTICE UNDER SECTION 226(3) DATED 15.3.2019 ISSUED TO 8TH RESPONDENT. EXHIBIT P10OF THE RECONCILIATION OF AMOUNTS RECOVERED UNDER SECTION 226(3). EXHIBIT P11OF THE RECTIFICATION PETITION ALONG WITH STAY PETITION BEFORE THE TRIBUNAL :12: APPENDIX OF WP(C) 8166/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1OF THE ASSESSMENT ORDER FOR TYE ASSESSMENT YEAR 2016-17 DATED 28.12.2018 PASSED BY THE FIRST RESPONDENT EXHIBIT P2OF THE JUDGMENT DATED 28.01.2019 IN W.P.(C)NO. 2532 OF 2019 EXHIBIT P3OF THE ORDER ON STAY PETITION DATED 08.03.2019 EXHIBIT P4OF THE NOTICE UNDER SECTION 223(3) DATED 15.03.20119 ISSUED TO 3RD RESPONDENT EXHIBIT P5OF THE NOTICE UNDER SECTION 226(3) DATED 15.03.2019 ISSUED TO 4TH RESPONDENT EXHIBIT P6OF THE NOTICE UNDER SECTION 226(3) DATED 15.03.2019 ISSUED TO 5TH RESPONDENT EXHIBIT P7OF THE NOTICE UNDER SECTION 226(3) DATED 15.03.2019 ISSUED TO 6TH RESPONDENT EXHIBIT P8OF THE NOTICE UNDER SECTION 226(3) DATED 15.03.2019 ISSUED TO 7TH RESPONDENT EXHIBIT P9OF THE RECONCILIATION OF AMOUNTS RECOVERED UNDER SECTION 226(3)

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