SM SILKS AND SAREES vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/2553/2020HC KeralaKLHC01007345202030 January 2020Author: HONOURABLE MR. JUSTICE ALEXANDER THOMAS5 pages

AI SummaryRemanded

What did the High Court hold?

The High Court, after hearing both sides, ordered that the Commissioner of Income Tax (Appeals) shall take up the stay application (Ext.P4) filed in the appeal (Ext.P3). The court directed that orders on the stay application should be passed without undue delay, preferably within two months from the date of production of a certified copy of the judgment. Crucially, the court ordered that until orders are passed on the stay application, further coercive steps pursuant to the demand notice (Ext.P2) for the enforcement of the impugned order (Ext.P1) will be kept in abeyance. The principle established is that coercive recovery actions should be deferred pending a decision on a stay petition, promoting procedural fairness.

What were the facts?

The petitioner, SM Silks and Sarees, represented by its designate partner, filed a writ petition before the High Court of Kerala. The petitioner's grievance stemmed from an Ext.P1 order, against which they had filed an appeal (Ext.P3) and a stay petition (Ext.P4). While the stay petition was pending, the assessing authority issued an Ext.P2 demand notice for the recovery of disputed amounts, seeking to enforce the impugned Ext.P1 order. The petitioner sought intervention from the High Court to address this situation.

What were the issues?

1. Whether the issuance of a demand notice (Ext.P2) for the enforcement of an order (Ext.P1) is permissible during the pendency of a stay petition (Ext.P4) filed against that order. The petitioner argued that the demand notice was premature and coercive, issued while their application for stay was still under consideration. They contended that the respondents should have awaited the decision on the stay petition before initiating recovery proceedings. The revenue, represented by the Assistant Commissioner of Income Tax and the Commissioner of Income Tax (Appeals), did not record any specific arguments in the judgment regarding the propriety of the demand notice during the pendency of the stay petition. However, their action of issuing the demand notice implies a stance that such action was permissible.

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 ALEXANDER THOMAS THURSDAY, THE 30TH DAY OF JANUARY 2020 / 10TH MAGHA, 1941 WP(C).No.2553 OF 2020(T) PETITIONER: SM SILKS AND SAREES MARKET ROAD, CHANGANCHERRY KAVALA, CHANGANACHERRY, REPRESENTED BY ITS DESIGNATE PARTNER, SANTHOSH. BY ADVS. SRI.K.SRIKUMAR (SR.) SRI.K.MANOJ CHANDRAN RESPONDENTS: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE, ALAPPUZHA-688 010. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), KOTTAYAM-686001. SRI JOSE JOSEPH SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30.01.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C) No.2553 of 2020(T) 2 ALEXANDER THOMAS, J. =========================== W.P(C) No.2553 of 2020 =========================== Dated this the 30th day of January, 2020

JUDGMENT Against Ext.P1 order, the petitioner has filed Ext.P3 appeal and Ext.P4 stay petition. The petitioner's grievance is that during the pendency of the stay petition, Ext.P2 demand notice has been issued for enforcement of the impugned Ext.P1 order by the assessing authority for recovery of the disputed amounts.

Heard Sri.K.Srikumar, learned Senior Counsel instructed by Sri.K.Manoj Chandran, learned counsel appearing for the petitioner and Sri.Jose Joseph, learned standing counsel appearing for the respondents.

After hearing both sides and after taking note of the facts and circumstances of the case, it is ordered in the interest of justice that the 2 nd respondent shall take up the matters in Ext.P4 stay application filed in Ext.P3 appeal and after affording reasonable opportunity of being heard to the petitioner through their authorised representative/counsel, if any, shall pass orders on that application without much delay, preferably within a period of two months from the date of production of a certified copy of this judgment. Until orders are thus passed on the abovesaid Ext.P4 stay application, further coercive steps pursuant to Ext.P-2 demand notice for enforcement of the impugned Ext.P1 order will be kept in abeyance. With these observations and directions, the above Writ Petition (Civil) stands finally disposed of. ALEXANDER THOMAS JUDGE vgd

Appendix — schedule of exhibits

APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 27.12.2019. EXHIBIT P2 TRUE COPY OF THE NOTICE OF DEMAND DATED 27.12.2019. EXHIBIT P3 TRUE COPY OF THE APPEAL DATED 03.01.2020. EXHIBIT P3(A) TRUE COPY OF ADDITIONAL GROUNDS DATED 22.01.2020. EXHIBIT P4 TRUE COPY OF THE STAY PETITION EXHIBIT P5 TRUE COPY OF THE PETITION FOR URGENT HEARING.

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