THE UZHAVOOR SERVICE CO-OPERATIVE BANK LTD. NO. 3810 vs. THE COMMISSIONER OF INCOME TAX (APPEALS)
What did the High Court hold?
The High Court of Kerala, following its own Division Bench judgment 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], held that the insistence for payment of a portion of the demanded amount as a condition for stay need not be insisted upon in such cases. The Court directed the 1st appellate authority (Commissioner of Income Tax (Appeals)) to ensure the final disposal of the petitioner's appeal (Ext.P2) without much delay, after affording a reasonable opportunity of being heard. Crucially, the Court ordered that until the final orders are passed disposing of the appeal, all coercive steps for the enforcement of the assessment order impugned in the appeal shall be kept in abeyance. The ratio is that statutory appeals should be disposed of expeditiously, and coercive recovery should be stayed pending such disposal, especially when relying on established High Court precedents.
What were the facts?
The petitioner, The Uzhavoor Service Co-operative Bank Ltd. No. 3810, represented by its Secretary, filed a writ petition before the High Court of Kerala. The petition sought a mandamus directing the Commissioner of Income Tax (Appeals) to consider its appeal (Ext.P2) on merits and to restrain the respondents from initiating coercive proceedings until a decision was passed on the appeal. The petitioner is challenging an order passed by the Assistant Commissioner of Income Tax, Circle and TPS, Kottayam. The assessment year(s) and the specific amount in dispute are not explicitly stated in the provided text. The procedural history involves the filing of a statutory appeal before the Commissioner of Income Tax (Appeals).
What were the issues?
1. Whether the 1st respondent (Commissioner of Income Tax (Appeals)) should be directed to consider the petitioner's appeal (Ext.P2) on its merits? (Question of law and fact, concerning the right to a fair hearing and statutory appeal provisions). 2. Whether coercive proceedings for recovery and collection of the impugned tax should be kept in abeyance until the final decision is rendered by the appellate authority? (Question of law, concerning interim relief pending appeal). Assessee's Contentions: The petitioner, through its counsel, sought a direction for the appellate authority to consider its appeal on merits and to stay coercive recovery proceedings. The petitioner relied on a Division Bench judgment of the High Court of Kerala 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 Contentions: The revenue, represented by Sri. Jose Joseph, learned Standing Counsel, did not explicitly record any arguments against the petitioner's prayers in the provided judgment excerpt. The judgment notes that the Standing Counsel was heard.
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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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