THE AREACODE SCB NO.F 1571, vs. THE COMMISSIONER OF INCOME TAX (APPEALS),
What did the High Court hold?
The High Court, following a 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 enforced in such cases. The Court directed the first appellate authority to ensure the final disposal of the petitioner's appeal (Exhibit P5) without undue delay, after affording 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 issue of the specific amount to be paid as a pre-deposit for stay was implicitly decided against being insisted upon.
What were the facts?
The petitioner, The Area Code SCB No. F 1571, filed a writ petition before the High Court of Kerala seeking to quash certain orders (Exhibits P2 and P4) and to direct the respondents, the Commissioner of Income Tax (Appeals) and the Income Tax Officer, to consider its pending appeal (Exhibit P5) and stay petition (Exhibit P6). The petitioner also sought a direction to prevent recovery proceedings until the stay petition was considered. The petition was filed on February 6, 2020.
What were the issues?
1. Whether the insistence for payment of a portion of the demanded amount as a condition for granting a stay should be enforced in the present circumstances? (Question of law, turning on principles of natural justice and appellate procedures). Assessee's Contention: The petitioner implicitly argues that recovery proceedings should be stayed pending the disposal of their appeal and stay petition, and that the appellate authority should be directed to consider these expeditiously. They rely on the principle that coercive steps should be held in abeyance until the appeal is decided. Revenue's Contention: The judgment does not explicitly record any specific arguments made by the Revenue's Standing Counsel. However, the context implies that the Revenue would typically seek to enforce the assessment order and may have insisted on pre-deposit for stay.
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Cause title — parties, addresses and appearances
JUDGMENT The prayers in the above Writ Petition (Civil) are as follows: “(i) To issue a writ of certiorari quashing Exhibit P2, and P4; ii) To issue a writ of mandamus or other appropriate writ, order or direction commanding and compelling the respondents to consider the Ext.P5 appeal and Ext.P6 stay petition preferred by the petitioner within a time frame stipulated by this Hon'ble Court. iii) Issue a writ of mandamus or other appropriate writ order or direction commanding and compelling the respondents not to proceed with any recovery proceedings till the stay petitions are considered and appropriate orders are passed therein.”
Heard Sri. P.C.Sasidharan, 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-5 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-5 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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