THE KOZHUVANAL SERVICE CO-OPERATIVE BANK LTD. NO.213 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 other similar cases, directed the 1st respondent (appellate authority) to ensure the final disposal of Ext.P2 appeal without undue delay, after affording the petitioner a reasonable opportunity of being heard. The Court further ordered that, in the interest of justice, all coercive steps for the enforcement of the assessment order impugned in the appeal shall be kept in abeyance until final orders are passed disposing of Ext.P2 appeal. The Court did not decide the merits of the appeal itself but provided interim relief pending its disposal. The principle is that in similar circumstances, insistence on payment of a portion of the demanded amount as a condition for stay may not be necessary, and coercive steps should be stayed pending the statutory appeal.
What were the facts?
The petitioner, The Kozhuvanal Service Co-operative Bank Ltd., filed a writ petition seeking a direction to the Commissioner of Income Tax (Appeals) to consider its appeal on merits and to restrain the respondents from initiating coercive proceedings until the appeal is decided. The petitioner is represented by its Secretary. The respondents are the Commissioner of Income Tax (Appeals) and the Income Tax Officer, Ward No.2, Kottayam. The writ petition was filed in the High Court of Kerala at Ernakulam.
What were the issues?
1. Whether the 1st respondent (Commissioner of Income Tax (Appeals)) should be directed to consider Ext.P2 appeal on its merits? 2. Whether the respondents should be restrained from initiating coercive proceedings against the petitioner society until orders are passed on Ext.P2 appeal? Assessee's Contention: The petitioner sought a direction for the appellate authority to decide the appeal on merits and to stay coercive recovery proceedings pending the appeal. 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 Contention: The judgment does not record any specific contentions made by the revenue. However, the context implies the revenue would be interested in recovery of tax.
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Cause title — parties, addresses and appearances
JUDGMENT The prayers in the above Writ Petition (Civil) are 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 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. (2) Grant such other reliefs which this Honourable court just and proper in the circumstance of the case.”
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
WP(C).No.3163 OF 2020(U) 3 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 respondent 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 SKS
WP(C).No.3163 OF 2020(U) 4
Appendix — schedule of exhibits
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