VAIKOM CENTRAL HOUSING CO-OPERATIVE SOCIETY LTD.NO.669, vs. THE COMMISSIONER OF INCOME TAX (APPEALS)
What did the High Court hold?
The High Court, following its own Division Bench judgment in W.A.No. 1529/2019 and the Full Bench decision in Mavilayi Service Co-operative Service Bank Ltd., v. Commissioner of Income Tax, Calicut, held that the insistence on payment of a portion of the demanded amount as a condition for stay need not be enforced in such cases. The Court directed the Commissioner of Income Tax (Appeals) to dispose of the petitioner's appeal expeditiously after providing a reasonable opportunity of being heard. Crucially, the Court ordered that all coercive steps for the enforcement of the assessment order impugned in the appeal shall be kept in abeyance until the final disposal of the appeal. The ratio is that pending statutory appeals, coercive recovery actions should be stayed to ensure the appellate authority can decide on merits without prejudice, especially when supported by High Court precedents.
What were the facts?
The petitioner, Vaikom Central Housing Co-operative Society Ltd., represented by its Secretary, filed a Writ Petition (Civil) before the High Court of Kerala. The main prayer was to direct the Commissioner of Income Tax (Appeals) to consider their appeal on merits and to restrain the respondents from initiating coercive proceedings until the appeal was decided. The petitioner is challenging an order or action by the Income Tax Officer, Ward No. 5, Kottayam. The assessment year(s) are not explicitly stated. The procedural history involves an appeal filed by the petitioner before the Commissioner of Income Tax (Appeals), which is pending.
What were the issues?
1. Whether the appellate authority should be directed to consider the appeal on its merits, and whether coercive proceedings should be stayed pending the appeal's disposal? (Question of law and fact, concerning the powers of the appellate authority and the principles of natural justice). Assessee's Contention: The petitioner argued that the appeal should be considered on its merits and that coercive steps should be withheld until a decision is rendered. They relied on a Division Bench judgment of the High Court in W.A.No. 1529/2019 and a Full Bench decision in Mavilayi Service Co-operative Service Bank Ltd., v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287]. Revenue's Contention: The judgment records no specific arguments from the revenue's side regarding the issues raised by the petitioner.
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Cause title — parties, addresses and appearances
JUDGMENT The main prayer in the above Writ Petition (Civil) is as follows: “1) Issue a writ of mandamus or other appropriate writ, order or direction to the 1st respondent to consider Ext.P2 appeal on merit and also restraining the respondents from initiating coercive proceedings against the petitioner society till orders are passed in Ext.P2 appeal on merit.”
Heard Sri. O.D. Sivadas, learned counsel appearing for the petitioner and Sri. Jose Joseph, learned Standing Counsel for the Income Tax Department appearing for the respondents.
In similar circumstances, a Division Bench of this Court in the judgment dated 1.7.2019 in W.A.No. 1529/2019 has taken the view that the insistence for payment of a portion of the amount demanded, as a condition for grant of stay, need not be insisted in cases as in the instant one and that the Division Bench, for reasons stated therein, has ordered that it is for the appellate authority to take a decision on the statutory appeal at the earliest and that until the final decision is rendered by the appellate authority in the statutory appeal, coercive steps for recovery and collection of the impugned tax shall be kept in abeyance in the light of the dictum laid down by the Full Bench of this Court in Mavilayi Service Co- operative Service Bank Ltd., v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287]. The Division Bench in the abovesaid judgment dated 1.7.2019 in W.A.No. 1529/2019 has also dealt with the reasons for taking such a view for making such an interim arrangement pending disposal of the main appeal by the statutory appellate authority concerned. The said decision of the Division Bench of this Court in W.A.No. 1529/2019 has been followed by this Court in a series of other cases as in the judgment dated 10.1.2020 in W.P.(C).No.523/2020. Accordingly, following the line of directions and orders already passed by the Division Bench of this Court in the judgment dated 1.7.2019 in W.A.No. 1529/2019 as well as various other judgments rendered by this Court, following the said directions and orders of the Division Bench in the matter of the interim arrangement till the disposal of the main statutory appeal, etc., following orders and directions are issued: It is ordered that the 1st appellate authority shall ensure final disposal of Ext.P-2 appeal after affording reasonable opportunity of being heard to the petitioner without much delay and within a reasonable time limit that may be fixed appropriately by the said appellate authority. However, in the interest of justice it is ordered that until final orders are passed disposing of Ext.P-2 appeal, all coercive steps for the enforcement of the assessment order impugned in the abovesaid appeal shall be kept in abeyance. With these observations and directions, the Writ Petition (Civil) stands finally disposed of. ALEXANDER THOMAS, JUDGE. acd
Appendix — schedule of exhibits
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