HLL BIOTECH LTD., vs. INCOME TAX OFFICER,

WP(C)/33679/2018HC KeralaKLHC01077407201814 November 2018Author: HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court noted the agreement between the counsel for the petitioner and the Revenue. Both parties concurred that the Department should only proceed against the petitioner after the appellate authority has considered the remanded issue. Consequently, the Court directed the Department to defer all coercive steps until the second respondent (Commissioner of Income Tax (Appeals)) considers the petitioner's appeal as per the directions of the Income Tax Appellate Tribunal. The Court did not decide on the merits of the original tax dispute but focused on the procedural aspect of coercive action during pending appeals.

What were the facts?

The petitioner, HLL Biotech Ltd., a subsidiary of a Government of India undertaking, faced an adverse order for Assessment Year 2014-15. They appealed to the Commissioner of Income Tax (Appeals), whose order was then appealed to the Income Tax Appellate Tribunal (ITAT). The ITAT partly allowed the appeal and remanded the matter for fresh adjudication. While proceedings were pending before the second respondent (Commissioner of Income Tax (Appeals)), the Department initiated coercive action against the petitioner. Aggrieved by this, the petitioner filed a writ petition before the High Court of Kerala.

What were the issues?

1. Whether the Department can initiate coercive action against the assessee while an appeal, which has been partly allowed and remanded by the Income Tax Appellate Tribunal, is pending before the appellate authority? Assessee's Contention: The assessee argued that coercive action by the Department was premature and inappropriate given the ongoing appellate process, particularly after the ITAT's remand order. The Department's action was seen as an attempt to circumvent the appellate proceedings. Revenue's Contention: The judgment records an agreement between both counsels that the Department could proceed against the petitioner only after the appellate authority considers the remanded issue. This implies the Revenue acknowledged the need for the appellate authority to adjudicate the remanded matter before any coercive steps.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU WEDNESDAY,THE 14TH DAY OF NOVEMBER 2018 / 23RD KARTHIKA, 1940 WP(C).No. 33679 of 2018 PETITIONER/S: HLL BIOTECH LTD., HILL BHAVAN, POOJAPPURA P.O., THIRUVANANTHAPURAM - 695 012, REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER. BY ADVS. SRI.E.K.MADHAVAN SMT.J.SURYA SMT.P.VIJAYAMMA SRI.PRINSUN PHILIP SRI.V.KRISHNA MENON RESPONDENT/S: 1 INCOME TAX OFFICER, WARD II(1), OFFICE OF THE JOINT COMMISSIONER OF INCOME TAX, RANGE-I, KOWDIYAR, THIRUVANANTHAPURAM - 695 003. 2 COMMISSIONER OFF INCOME TAX (APPEALS) AAYAKKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM - 695 003. 3 PRINCIPAL COMMISSIONER OF INCOME TAX AAYAKKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM - 695 003. BY ADVS. SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT -2- W.P.(C). No. 33679 of 2018 OTHER PRESENT: SRI K.M.V.PANDALAI, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.11.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

JUDGMENT The petitioner is a subsidiary of a Government of India undertaking. For the assessment year 2014-15 it has suffered an adverse order and, then, appealed to the Commissioner of Income Tax (Appeals).

The appeal rejected, the petitioner filed the second appeal before the Tribunal. In fact, the Tribunal partly allowed the appeal and remanded the matter for fresh adjudication. When the proceedings are pending before the second respondent, the Department seems to have initiated coercive action. Aggrieved, the petitioner has filed this writ petition.

Now both the counsel agree that the Department could proceed against the petitioner only after the appellate authority

-3- considers the remanded issue. Under these circumstances, the Department will defer all coercive steps until the second respondent considers the petitioner's appeal as directed by the appellate Tribunal. DAMA SESHADRI NAIDU JUDGE das APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1OF THE ORDER DATED 26.12.2016. EXHIBIT P2OF THE NOTICE OF DEMAND IN FORM -7 UNDER SECTION 156 OF THE INCOME TAX ACT ISSUED BY THE FIRST RESPONDENT. EXHIBIT P3OF THE MEMORANDUM OF APPEAL. EXHIBIT P4OF THE PETITION DATED 08.02.2017 FILED BY THE PETITIONER BEFORE THE FIRST RESPONDENT. EXHIBIT P5OF THE ORDER DATED 29.02.2016 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES.

-4- EXHIBIT P6OF THE OF THE ORDER DATED 05.10.2017 PASSED BY THE FIRST RESPONDENT. EXHIBIT P7OF THE REVISED INSTRUCTION DATED 31.07.2017 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES. EXHIBIT P8OF THE REVIEW PETITION FILED BY THE PETITIONER BEFORE THE THIRD RESPONDENT. EXHIBIT P9OF THE ORDER DATED 05.01.2018 PASSED BY THE THIRD RESPONDENT. EXHIBIT P10OF THE JUDGMENT DATED 30.01.2018 IN W.P(C) NO. 2396 OF 2018. EXHIBIT P11OF THE PETITIONER'S LETTER DATED 22.01.2018. EXHIBIT P12OF THE ORDER OF THE SECOND RESPONDENT DATED 23.03.2018. EXHIBIT P13OF THE LETTER DATED 14.06.2018 OF THE GOVERNMENT. EXHIBIT P14OF THE ORDER DATED 24.09.2018. EXHIBIT P15OF THE NOTICE DATED 03.10.2018 ISSUED BY THE FIRST RESPONDENT.

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