What did the High Court hold?

The High Court held that a writ petition was not the appropriate remedy for interlocutory orders. However, considering the peculiar circumstances, it directed the petitioner to deposit Rs. 10 lakhs and allowed them to move the Appellate Authority for early hearing.

The petitioner company was directed to pay 15% of a disputed tax demand in three installments. The company, facing financial difficulties, failed to pay the first installment and sought interim protection from the High Court while its appeal was pending.

What were the issues?

Whether a writ petition is maintainable against interlocutory orders regarding tax demand payment, and if interim relief can be granted to a financially distressed assessee pending appeal.

Khoday India Ltd vs ITO | Karnataka High Court 2018

1/5 IN THE HIGH COURT OF KARNATAKA, BENGALURU

DATED THIS THE 24TH DAY OF SEPTEMBER 2018

BEFORE

THE HON'BLE Dr.JUSTICE VINEET KOTHARI

WRIT PETITION NO.42848 OF 2018 (T-IT)

Between:

Khoday India Ltd., “Brewery House”, 7th Mile, Kanakpura Road, Bengaluru-560 062.

Represented by its Director Sri.K.L.Swamy Aged about 70 years

…Petitioner (By Mr.Shankar.A, Advocate for Mr. Ganesh.R, Advocate)

And:

The Income Tax Officer

Ward-4(1)(2)

BMTC Building, 80 Feet Road

6th Block, Koramangala

Bengaluru-560 095.

The Principal Commissioner of Income-tax

Bengaluru-4

BMTC Building, 80 Feet Road,

6th Block, Koramangala,

Bengaluru-560 095.

2/5

The Commissioner of Income-tax,

(Appeals)-5

7th Floor, BMTC Building

80 Feet Road, 6th Block

Koramangala, Bengaluru-560 095.

The Commissioner of Income-tax,

(Appeals)-4

BMTC Building

80 Feet Road, 6th Block

Koramangala,

Bengaluru-560 095. …Respondents (By Mr.Jeevan.J.Neerlagi, Advocate)

This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to, quash the order passed by the R-2 vide communication dated 12.06.2018 at Annexure-Q to pay the disputed demand within 31.12.2018 for the assessment year 2014-15 pending disposal of appeal by R-3 and 4 and etc.

This Writ Petition coming on for Preliminary Hearing this day, the Court made the following:-

ORDER

Mr. Shankar.A, Adv. for Mr. Ganesh.R, Adv. for Petitioner. Mr. Jeevan.J.Neerlagi, Adv. for Respondents.

The petitioner-Company has filed this Writ Petition aggrieved by the Interlocutory Orders passed by the respondent-Authorities of Income Tax Department, 3/5

namely, the Principal Commissioner of Income-tax, Bengaluru-4, Bengaluru and secondly, to quash the order passed by concerned Income-tax Officer seeking to recover first of the three installments, which the Commissioner had directed the assessee-Company to deposit against 15% of the disputed demand in three installments before 31.12.2018 vide Annexure-Q dated 12.06.2018. Since the assessee did not pay even the first installment, the concerned Income-tax Officer vide Annexure-Y dated 18.09.2018, has directed the assessee-Company to deposit first installment before 24.09.2018.

Learned counsel for petitioner has submitted that though the Regular Appeal against the impugned assessment order is pending before First Appellate Authority for the Assessment Year 2014-2015, namely, CIT (Appeals)-4, since the company is in financial doldrums, therefore, it is not in a position to pay the 4/5

said amount, therefore, some interim protection may be given to the Company while the Appellate Authority may be requested to dispose of the appeal in accordance with law, as the issue is covered by Special Bench decision of Income Tax Appellate Tribunal.

Having heard learned counsel for petitioner- company and learned AGA for respondents, this Court is of the opinion that though against the said interlocutory orders, the writ petition is not an appropriate remedy, as the matters are pending before the concerned Appellate Authority/Administrative Authority and the interim communication asking the petitioner-Company to deposit 15% of the disputed demand, that too in three installments, does not deserve any interference, at this stage.

However, in view of the peculiar facts and circumstances of the case, it is directed that the petitioner-Company shall deposit Rs.10 lakhs out of the 5/5

disputed demand on or before 30.09.2018 and the concerned first Appellate Authority, namely, CIT (Appeals) may be moved by the Assessee for early hearing of the appeal subject to the aforesaid deposit. Learned CIT(A) may consider the request of the assessee-Company to dispose of the appeal expeditiously.

With the aforesaid observations, this writ petition is disposed of. No costs.

Copy of this order be sent to the Respondents, forthwith.

Sd/- JUDGE

dn/-

KHODAY INDIA LTD., vs. THE INCOME TAX OFFICER

What did the High Court hold?

What were the facts?

What were the issues?

Recent GST High Court judgments