BHARATH NALLURI vs. THE STATE TAX OFFICER (FORMERLY COMMERCIAL TAX OFFICER)

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WP(C)/23462/2019HC KeralaKLHC01060691201930 August 2019Author: HONOURABLE MR.JUSTICE S.V.BHATTI4 pages
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What did the High Court hold?

The High Court, perusing the assessment order (Ext.P1), appeal (Ext.P2), and stay petition (Ext.P3), found a prima facie case for issuing necessary directions. The Court was satisfied that the writ petition could be disposed of with the limited prayer made. Accordingly, the appellate authority (2nd respondent) was directed to consider and dispose of the stay application (Ext.P3) 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 Court did not decide on the merits of the appeal or the stay petition itself, but rather on the procedural aspect of expeditious disposal.

What were the facts?

The petitioner, Bharath Nalluri, proprietor of M/s Intrepid Works, filed an appeal (Ext.P2) against an assessment order (Ext.P1) passed under Section 25(1) of the KVAT Act. Along with the appeal, a stay petition (Ext.P3) was filed. The petitioner approached the High Court seeking a direction to the appellate authority (2nd respondent) to consider and dispose of the stay petition expeditiously. The petitioner argued that mere pendency of an appeal does not grant a stay and that delay in deciding the stay petition could lead to recovery proceedings by the assessing officer, rendering the appeal ineffective. The petitioner contended that the law requires expeditious disposal of stay petitions to protect the appellant's interest.

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 petitioner, pending appeal against an assessment order under the KVAT Act? Assessee's Contentions: - The mere filing or pendency of an appeal does not automatically grant a stay. - Delay in disposing of the stay petition could result in coercive recovery steps by the assessing officer, making the statutory appeal academic or ineffective. - The law mandates expeditious disposal of stay petitions to safeguard the appellant's interests. Revenue's Contentions: - No specific contentions from the revenue are recorded in the judgment regarding the disposal of the stay petition.

Which sections of the Income-tax Act were involved?

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 FRIDAY, THE 30TH DAY OF AUGUST 2019 / 8TH BHADRA, 1941 WP(C).No.23462 OF 2019(G) PETITIONER/S: BHARATH NALLURI PROPRIETOR, M/S INTREPID WORKS, POORNAM, 7/712, MARUTHA ROAD, PALAKKAD. BY ADVS. SRI.N.MURALEEDHARAN NAIR SMT.K.HYMAVATHY RESPONDENT/S:

THE STATE TAX OFFICER (FORMERLY COMMERCIAL TAX OFFICER) STATE GOODS SERVICE TAX DEPARTMENT, KERALA, IIND CIRCLE, PALAKKAD - 678001.

THE ASSISTANT COMMISSIONER (APPEALS) STATE GOODS SERVICE TAX DEPARTMENT, KERALA, PALAKKAD - 678001.

THE ASSISTANT COMMISSIONER OF STATE TAX STATE GOODS SERVICE TAX DEPARTMENT, KERALA, PALAKKAD - 678001. GP. DR. THUSHARA JAMES THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30.08.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.23462 OF 2019(G) -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 the writ petition.

WP(C).No.23462 OF 2019(G) -3- 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.23462 OF 2019(G) -4- APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER PASSED BY THE 1ST RESPONDENT FOR THE YEAR 2015- 16 DATED 30.04.2019. EXHIBIT P2 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 08.06.2019. EXHIBIT P3 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 15.06.2019. EXHIBIT P4 TRUE COPY OF THE DEMAND NOTICE IN FORM NO.12 ISSUED BY 1ST RESPONDENT FOR THE YEAR 2015-16 DATED 30.04.2019.

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