What did the High Court hold?

The Court accepted the respondents' submission that the refunds due would be adjusted towards the minimum deposit. Consequently, the challenge to the order and demand was rendered infructuous.

The petitioner challenged an order rejecting their stay application for an Income Tax assessment without the mandatory 20% deposit. The petitioner argued that refunds due for previous years should be adjusted towards this deposit.

What were the issues?

Whether refunds due for previous assessment years can be adjusted towards the mandatory 20% deposit required for a stay of demand.

M/S.Vrl Logistics Ltd vs PCIT | Karnataka High Court 2020

1 IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH Dated this the 16th day of March 2020 Before THE HON’BLE MR. JUSTICE B.M. SHYAM PRASAD Writ Petition No.145067/2020 (T-IT)

Between

M/s. VRL Logistics Ltd., RS No.351/1, VRL Complex, NH 4, Bengaluru Road, Varur, Hubballi-581207, Karnataka, Rep. By Its CMD Shri.Vijayashankeshwar Aged About: 70 Years.

...Petitioner

(By Sri. H.R.Kambiyavar, Adv., for Sri. S Parthasarathi, Smt. Roopa S.Chinivar, Smt. Pratibha R., Smt. Patri Shashikala, Smt. Sowmya K., Advocates)

And

The Principal Commissioner Of Income Tax, C.R. Building, Navanagar, Hubballi-580025. Dharwad.

The Assistant Commissioner Of Income Tax, Circle 2(1), C.R. Building, Navangaar, Hubballi-580025, Dharwad. ...Respondents

(By Sri. Y.V. Raviraj, Advocate For R1 & R2)

This Writ Petition is filed under Articles 226 & 227 of the Constitution of India praying to issue a writ of certiorari or a direction in the nature of writ of certiorari quashing the order of the first respondent bearing F.No.Stay Petition/Pr.CIT-HBL/2019-20 dated 20.02.2020 (Annexure-F); issue a writ of certiorari or a direction in the nature of writ of certiorari quashing the order of the second respondent dated 24.2.2020 (Annexure-'G'), bearing No.ITBA/COM/F/17/2019- 20/1025640933(1); issue a writ of prohibition or a direction in the nature of writ of prohibition restraining the first and second respondent not to recover the demand over and above the refund due to the petitioner until the disposal of the appeal by the Commissioner (A), Hubballi; and etc.

This Writ Petition coming on for Preliminary Hearing in ‘B’ Group, this day, the Court made the following:

ORDER

The learned counsel for the petitioner and the learned counsel for the respondents are heard.

The petitioner has challenged the Principal Commissioner of Income Tax, Hubballi – the second respondent’s order dated 20th February 2020. The Principal Commissioner of Income Tax has rejected the petitioner’s application/petition for stay of the

3 Assessment Order under Section 143(3) of the Income Tax Act, without the minimum deposit of 20% of the demand as per such Assessment order. However, the Principal Commissioner, while rejecting the petitioner’s application, has permitted the petitioner to deposit the minimum of 20% of the demand in three installments.

The learned counsel for the petitioner submits that the petitioner is entitled to receive refunds for the previous Assessment Years of 2015-16 and 2016-17, and if the amount payable as such refund is adjusted towards the minimum deposit of 20% of the demand, not only the minimum deposit would be made good but the petitioner would also be entitled for the refund of surplus.

The learned counsel for the respondents does not dispute the factual assertion that the petitioner would be entitled for refund for the aforesaid two Assessment Years and that the refund will have to be

4 adjusted towards the minimum deposit of 20% of the demand. The learned counsel further submits the authorities would accordingly make necessary adjustments and as such, the challenge to the Principal Commissioner’s order dated 20.02.2020 and the consequential demand as per Annexure-G is rendered infructuous.

In the light of the foregoing it would suffice to take the submissions of the learned counsel for the respondents on record and dispose of the writ petition in terms thereof. The writ petition is accordingly disposed of.

Sd/- JUDGE Kms

M/S.VRL LOGISTICS LTD., vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX

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