VILAPPIL SERVICE CO-OPERATIVE BANK LTD. vs. THE INCOME TAX OFFICER

WP(C)/852/2020HC KeralaKLHC01002441202014 January 2020Author: HONOURABLE MR. JUSTICE ALEXANDER THOMAS4 pages

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What did the High Court hold?

The High Court of Kerala directed the 2nd respondent-appellate authority to consider the stay petition (Ext.P5) within two months from the date of production of a certified copy of the judgment. Until orders are passed on the stay petition, further coercive proceedings for the recovery of the disputed amounts in the impugned assessment order shall be kept in abeyance. The Court did not decide on the merits of the appeal or the validity of the assessment order itself, focusing solely on the procedural aspect of recovery pending the decision on the stay application. The ratio decidendi is that coercive recovery should be deferred until a stay application is adjudicated by the appellate authority.

What were the facts?

The petitioner, Vilappil Service Co-operative Bank Ltd., is challenging an assessment order (Ext.P2). The petitioner has filed an appeal (Ext.P4) and a stay petition (Ext.P5) before the appellate authority, the Commissioner of Income Tax (Appeals). The petitioner's primary grievance is that coercive recovery proceedings have been initiated before the appellate authority could decide on the stay application. The petitioner contends that it is unjust to proceed with recovery when the stay application remains undecided. The writ petition was filed before the High Court of Kerala.

What were the issues?

1. Whether coercive recovery proceedings can be initiated against the assessee when an appeal and a stay petition are pending before the appellate authority? (Question of law and fact, concerning the procedural fairness of tax recovery). Assessee's Contentions: - It is unjust to enforce recovery through coercive proceedings when the stay application is still undisposed of. Revenue's Contentions: - The judgment records no specific contentions from the revenue regarding the initiation of recovery proceedings while the stay petition is pending.

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Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS TUESDAY, THE 14TH DAY OF JANUARY 2020 / 24TH POUSHA, 1941 WP(C).No.852 OF 2020(F) PETITIONER/S: VILAPPIL SERVICE CO-OPERATIVE BANK LTD. NO. 2522, HEAD OFFICE, PEYYAD, THIRUVANANTHAPURAM, REPRESENTED BY ITS SECRETARY S. RICHARDSON, S/O. S. STEPHENSON, AGED 55 YEARS, RESIDING AT TRIPTHI, MALAYAM P.O. THIRUVANANTHAPURAM DISTRICT. BY ADV. SRI.BABU S. NAIR RESPONDENT/S: 1 THE INCOME TAX OFFICER WARD 2 (4),OFFICE OF THE JOINT COMMISSIONER OF INCOME TAX, RANGE 2, AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM 695 003. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM 695 003. OTHER PRESENT: SRI.CHRISTOPHER ABRAHA, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.01.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ALEXANDER THOMAS, J. ================== W.P.(C).No. 852 of 2020 ================== Dated this the 14th day of January, 2020

J U D G M E N T Against Ext.P2 assessment order, the petitioner has filed Ext.P4 appeal along with Ext.P-5 stay petition. The petitioner's grievance in this writ petition is that, before the appellate authority could consider the interim stay application, coercive recovery proceedings have been initiated. The petitioner submits that it is unjust to enforce recovery through coercive proceedings, when the stay application is still undisposed of.

Heard Sri.Babu.S.Nair, learned counsel appearing for the petitioner and Sri.Christopher Abraham, 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 that the 2nd respondent- appellate authority shall consider Ext.P5 stay petition within two months from the date of production of a certified copy of this judgment. Till orders are passed on Ext.P-5 stay petition further coercive proceedings for recovery of the disputed amounts in the impugned order shall be kept in abeyance.

- : 3 :- With these observations and directions, the Writ Petition (Civil) stands finally disposed of. sdk+ ALEXANDER THOMAS, JUDGE - : 4 :-

Appendix — schedule of exhibits

APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE RETURNS FILED BY THE PETITIONER FOR THE ASSESSMENT YEAR 2017-18. EXHIBIT P2 TRUE COPY OF THE ASSESSMENT ORDER ISSUED BY THE FIRST RESPONDENT DATED 16.12.2019. EXHIBIT P3 TRUE COPY OF THE NOTICE OF DEMAND ISSUED TO THE PETITIONER BY THE FIRST RESPONDENT DATED 16.12.2019. EXHIBIT P4 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 2.1.2020 ALONG WITH THE ACKNOWLEDGEMENT OF RECEIPT. EXHIBIT P5 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER IN EXHIBIT P4 APPEAL DATED 6.1.2020.

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