THE WEST CHALAKUDY SERVICE CO OPERATIVE BANK LIMITED vs. THE COMMISSIONER OF INCOME TAX
What did the High Court hold?
The High Court, following its own 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], directed the first respondent (appellate authority) to ensure the final disposal of the petitioner's appeal (Ext.P2) without delay, after affording a reasonable opportunity of being heard. Crucially, the Court also ordered that all coercive steps for the enforcement of the assessment order impugned in the appeal shall be kept in abeyance until the final orders are passed disposing of the appeal. The Court did not decide the merits of the appeal itself but provided interim relief and directed expeditious disposal.
What were the facts?
The petitioner, The West Chalakudy Service Co Operative Bank Limited, filed a writ petition before the High Court of Kerala seeking a writ of mandamus directing the Commissioner of Income Tax (Appeals) to consider their appeal on merits and to restrain the respondents from initiating coercive proceedings until the appeal is decided. The petitioner had filed an appeal (Ext.P2) before the first respondent. The respondents are the Commissioner of Income Tax (Appeals), the Principal Commissioner of Income Tax, and the Income Tax Officer. The writ petition was filed in January 2020.
What were the issues?
1. Whether the appellate authority should be directed to consider the petitioner's appeal on its merits? (Question of law and fact, concerning procedural fairness and statutory appeal provisions). 2. Whether coercive proceedings for recovery of impugned tax should be stayed pending the disposal of the statutory appeal? (Question of law and fact, concerning interim relief and recovery provisions). Assessee's Contentions: The petitioner sought a direction for the appellate authority to consider their appeal on merits and requested a stay on coercive recovery proceedings until the appeal is decided. They relied on a Division Bench judgment of the High Court 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 Contentions: The judgment does not record any specific contentions made by the revenue. However, the presence of the Standing Counsel for the Income Tax Department indicates their participation in the proceedings.
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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 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 WP(C).No.2787 OF 2020(W) 3 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 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
WP(C).No.2787 OF 2020(W) 4 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.2787 OF 2020(W) 5
Appendix — schedule of exhibits
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