THE KECHERY SERVICE CO-OPERATIVE BANK LTD. NO.R286, vs. THE INCOME TAX OFFICER,
What did the High Court hold?
The High Court, following a Division Bench judgment in W.A.No. 1529/2019 and subsequent similar cases, held that the insistence for payment of a portion of the amount demanded as a condition for granting a stay need not be insisted upon in circumstances similar to the present case. The Court directed that the appellate authority (Commissioner of Income Tax (Appeals)) shall ensure the final disposal of the statutory appeal (Ext.P2) without much delay and within a reasonable time limit. Crucially, the Court ordered that until final orders are passed disposing of the appeal, all coercive steps for the enforcement of the assessment order impugned in the appeal shall be kept in abeyance. The ratio is that interim relief in the form of a stay of coercive steps pending appeal should be granted without insisting on pre-deposit, in line with established High Court precedents, to ensure justice.
What were the facts?
The petitioner, The Kechery Service Co-Operative Bank Ltd., filed a Writ Petition (Civil) before the High Court of Kerala challenging an order (Ext.P4) passed by the Income Tax Officer (ITO), Ward 1 and TPS, Guruvayur. The petitioner sought to quash this order and sought other incidental reliefs. The petition was heard by a Division Bench of the High Court. The procedural history indicates that the petitioner had filed a statutory appeal (Ext.P2) before the Commissioner of Income Tax (Appeals) against the assessment order. The present writ petition was filed seeking interim relief pending the disposal of this statutory appeal.
What were the issues?
1. Whether the insistence for payment of a portion of the demanded amount as a condition for granting a stay of recovery is justified in the present circumstances? (Question of law and fact, relating to the powers of appellate authorities and the interpretation of relevant provisions concerning stay of demand). Assessee's Contention: The petitioner implicitly argued that such insistence should not be a condition for stay, relying on previous High Court judgments. The petitioner sought to quash the ITO's order and obtain interim relief. Revenue's Contention: The judgment does not explicitly record the revenue's specific arguments on the merits of the stay or the quashing of the order. However, the revenue was represented by a Government Pleader, indicating their appearance and likely opposition to the petitioner's prayers.
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Cause title — parties, addresses and appearances
JUDGMENT The prayers in the above Writ Petition (Civil) are as follows: “1) To quash Ext.P4 order issued by the 1st respondent by the issue of a writ of certiorari or such other writ or order or direction. 2) To grant the petitioner such other incidental reliefs including the costs of these proceedings.
Heard Sri. Harisankar V. Menon, learned counsel appearing for the petitioner and Smt. M.M. Jasmin, learned Government Pleader 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 WP(C).No.2278 OF 2020(H) 3 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-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 WP(C).No.2278 OF 2020(H) 4 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 Nsd //// PA TO JUDGE JUDGE
WP(C).No.2278 OF 2020(H) 5
Appendix — schedule of exhibits
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