THE WEST CHALAKUDY SERVICE CO-OPERATIVE BANK LTD NO.R 262, vs. THE COMMISSIONER OF INCOME TAX (APPEALS),
What did the High Court hold?
The High Court, following its own previous Division Bench judgments in W.A.No. 1529/2019 and subsequent cases like W.P.(C).No.523/2020, which were based on the Full Bench decision in Mavilayi Service Co-operative Service Bank Ltd. v. Commissioner of Income Tax, Calicut, directed the appellate authority (1st respondent) to dispose of the petitioner's appeal (Ext.P2) expeditiously after providing 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 Court did not decide the merits of the assessment order itself but provided interim relief.
What were the facts?
The petitioner, The West Chalakudy Service Co-operative Bank Ltd., filed a writ petition before the High Court of Kerala challenging an order (Ext.P3) passed by the Principal Commissioner of Income Tax (2nd respondent). The petitioner sought to quash this order and sought a direction to the Commissioner of Income Tax (Appeals) (1st respondent) to consider their appeal (Ext.P2) on its merits. They also requested a stay on coercive proceedings for recovery of tax until the appeal was decided. The Income Tax Officer (3rd respondent) is also a party. The case involves an assessment year and a disputed tax amount, though these are not explicitly stated in the provided text.
What were the issues?
1. Whether the Principal Commissioner of Income Tax was justified in passing the impugned order (Ext.P3)? (Question of law and fact, concerning the validity of the order). The petitioner contended that the appeal should be considered on its merits and coercive steps should be restrained. The revenue's contentions are not recorded in the judgment. 2. Should coercive proceedings for recovery of the disputed tax be stayed pending the disposal of the statutory appeal by the appellate authority? (Question of law and fact, concerning interim relief). The petitioner argued for a stay on coercive steps. The revenue's contentions are not recorded.
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Cause title — parties, addresses and appearances
JUDGMENT The prayers in the above Writ Petition (Civil) are as follows: “1) call for records leading to Ext.P3 order issued by the 2nd respondent and quash the same by issuing a writ of certiorari. 2) 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. 3) 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 01.07.2019 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 01.07.2019 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 10.01.2020 in W.P.(C).No.523/2020. 4. Accordingly, following the line of directions and orders already passed by the Division Bench of this Court in the judgment dated 01.07.2019 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-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. vgd
Appendix — schedule of exhibits
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