THE MANJOOR SERVICE CO-OPERATIVE BANK LTD. NO. K 73, 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 subsequent similar cases, directed the 1st respondent (appellate authority) to ensure the final disposal of Ext.P2 appeal after affording a reasonable opportunity of being heard to the petitioner, without undue delay. 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 the final disposal of Ext.P2 appeal. The reasoning is based on the established principle that insistence on payment of a portion of the demanded amount as a condition for stay may not be necessary in certain cases, and that statutory appeals should be decided expeditiously. The ratio is that pending a statutory appeal, coercive recovery actions should be stayed, and the appellate authority should proceed to decide the appeal on merits promptly.
What were the facts?
The petitioner, The Manjoor Service Co-operative Bank Ltd., represented by its Secretary, filed a writ petition before the High Court of Kerala. The petition challenged the inaction of the 1st respondent, the Commissioner of Income Tax (Appeals), in not considering their appeal (Ext.P2) on merits. The petitioner also sought a stay on coercive proceedings by the respondents until the appeal was decided. The assessment year(s) are not specified. The procedural history involves the filing of an appeal before the appellate authority, which was allegedly not being considered.
What were the issues?
1. Whether the 1st respondent should be directed to consider the petitioner's appeal (Ext.P2) on its merits, and whether coercive proceedings should be restrained until a decision is rendered on the appeal? (Question of law and fact, concerning the procedural fairness and interim relief in tax appeals). Assessee's Contention: The petitioner seeks a writ of mandamus directing the 1st respondent to consider their appeal on merit and to restrain coercive proceedings until the appeal is decided. They rely on the principle that appellate authorities should decide appeals on merit and that coercive steps should be kept in abeyance pending such decisions. Revenue's Contention: The judgment records the appearance of the Standing Counsel for the Income Tax Department, but their specific arguments are not detailed. However, the court's decision indicates that the revenue's position, if any, regarding the insistence on payment of a portion of the demand for stay, was considered in light of existing precedents.
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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.3148 OF 2020(P) 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.3148 OF 2020(P) 4
Appendix — schedule of exhibits
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