M/S. POWER LINE ELECTRICAL SERVICES (INDIA) PVT LTD vs. STATE TAX OFFICER (WORKS CONTRACT)

WP(C)/24659/2019HC KeralaKLHC01063927201918 September 2019Author: HONOURABLE MR.JUSTICE S.V.BHATTI4 pages

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What did the High Court hold?

The High Court of Kerala, per Justice S.V. Bhatti, found that a case was made out for issuing necessary directions to the appellate authority (2nd respondent) to dispose of the stay petition (Ext.P3). The Court directed the appellate authority to consider and dispose of the stay application as early as possible, preferably within two months from the date of receipt of a copy of the judgment. Additionally, the respondents were directed not to take coercive steps or recover the amounts determined in the orders under appeal for ten weeks from the date of the judgment. The High Court's decision was based on the limited prayer and the grounds presented by the petitioner, aiming to protect the assessee's interest pending the disposal of the stay petition.

What were the facts?

The petitioner, M/s. Power Line Electrical Services (India) Pvt Ltd, filed an appeal (Ext.P2) against an assessment order (Ext.P1) passed under Section 25(1) of the KVAT Act. Along with the appeal, the petitioner filed a stay petition (Ext.P3) seeking a stay of the demand. The petitioner approached the High Court of Kerala through a writ petition, contending that the mere filing or pendency of an appeal does not automatically grant a stay. They argued that delays in disposing of the stay petition could lead to recovery actions by the assessing officer, rendering the appeal ineffective. The petitioner sought a direction for the appellate authority to consider and dispose of the stay petition expeditiously.

What were the issues?

1. Whether the High Court should direct the appellate authority to expeditiously consider and dispose of the stay petition filed by the assessee pending appeal? Assessee's Contentions: - The mere filing or pendency of an appeal does not amount to a stay being granted by the appellate authority. - Delay in disposing of the stay petition could result in coercive steps for recovery of the disputed tax amount, making the statutory appeal academic or ineffective. - The law provides for expeditious disposal of stay petitions to protect the interests of the appellant during the pendency of the appeal. Revenue's Contentions: - The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 25(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI WEDNESDAY, THE 18TH DAY OF SEPTEMBER 2019 / 27TH BHADRA, 1941 WP(C).No.24659 OF 2019 PETITIONER/S: M/S. POWER LINE ELECTRICAL SERVICES (INDIA) PVT LTD MIG - 95, SURABHI NAGAR, KAKKANAD, COCHIN - 682 030, REPRESENTED BY ITS DIRECTOR, SRI. K. N. SUBRAMANYA. BY ADV. SRI.TOMSON T.EMMANUEL RESPONDENT/S:

STATE TAX OFFICER (WORKS CONTRACT) FORMERLY COMMERCIAL TAX OFFICER (WC), STATE GOODS AND SERVICE TAX DEPARTMENT, CLAS TOWER, ERNAKULAM, COCHIN - 682 018.

ASSISTANT COMMISSIONER (APPEALS) STATE GOODS AND SERVICE TAX COMPLEX, THEVARA, ERNAKULAM, COCHIN - 682 015.

ASSISTANT COMMISSIONER OF STATE TAX STATE GOODS AND SERVICE TAX DEPARTMENT, CIVIL STATION, KAKKANAD, COCHIN - 682 030. GP. DR. THUSHARA JAMES THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.09.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.24659 OF 2019 -2- JUDGMENT The petitioner filed appeal in Ext.P2 aggrieved by the order of assessment in Ext.P1 made under Section 25(1) of the KVAT Act. The petitioner has filed the appeal with Ext.P3 stay petition. The petitioner prays for appropriate direction to the appellate authority to consider and dispose of Ext.P3 expeditiously. 2. The case of petitioner is that either the mere filing of appeal or mere pendency of appeal does not amount to granting stay by the appellate authority. The delay in considering and disposing of Ext.P3 results in the assessing officer taking steps for recovering the tax amount which is under challenge in Ext.P2. The assessing officer, if is successful in his effort the statutory appeal would become either academic or ineffective. It is further contended by the petitioner that in the manner the law provides for protecting the interest of appellant pending appeal, the order on stay petition is passed expeditiously. Hence

WP(C).No.24659 OF 2019 -3- the writ petition. 3. Perused Exts. P1, P2 and P3. Prima facie I am satisfied that a case is made out for issuing necessary directions to 2nd respondent to dispose of the stay petition in Ext.P3. Having regard to the limited prayer and the grounds referred to above, this Court is satisfied that the writ petition can be disposed of by this order: (a) The appellate authority/2nd respondent considers and disposes of Ext.P3 application as early as possible, preferably within two months from the date of receipt of copy of this judgment. (b) The respondents are directed not to take coercive steps or recover the amounts determined in the orders under appeal for ten weeks from today. Sd/- S.V.BHATTI JUDGE JS

WP(C).No.24659 OF 2019 -4- APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ORDER DATED 23.07.2019 COMPLETED U/S.25(1) OF THE KVAT ACT FOR THE YEAR 2014-15 BY 1ST RESPONDENT AFTER MAKING HUGE ADDITIONS. EXHIBIT P2 COPY OF APPEAL DATED 16.09.2019 SUBMITTED BEFORE 2ND RESPONDENT AGAINST EXT. P1 ORDER. EXHIBIT P3 COPY OF STAY PETITION DATED 16.09.2019 SUBMITTED ALONG WITH EXT. P2 APPEAL, BEFORE 2ND RESPONDENT. RESPONDENTS'S/S EXHIBITS: NIL

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