M/S.CORBEL PRE-LAMINATED BOARDS INDIA P. LTD V. THE ASSISTANT COMMISSIONER, INCOME TAX

WP(C)/40033/2015

AI Insights

The case involves M/S Corbel Pre-Laminated Boards India P. Ltd, which challenged a conditional stay order requiring them to pay 50% of the assessed amount for a stay against recovery of dues confirmed by an assessment order. The petitioner argued that the Commissioner of Income Tax (Appeals) did not validly exercise discretion in imposing this condition. The High Court found that the Commissioner failed to provide reasons for the conditional stay, which is a requirement under the law, and thus quashed the order, directing a re-evaluation of the stay petition.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 769792 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 04-01-2016
• Assessment Year: misc
• Other Referred Cases: Archana Agencies v Commercial Tax Officer - 2014 (2) KLT 715
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K M V PANDALAI
• Assessee Lawyers: V MATHEW
• Keywords: Assessment Order; Conditional stay; Income Tax; Stay Petition
• Section: 154; 221(1)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR MONDAY, THE 4TH DAY OF JANUARY 2016/14TH POUSHA, 1937 WP(C).NO. 40033 OF 2015 (D) ---------------------------- PETITIONER(S): ---------------- M/S.CORBEL PRE-LAMINATED BOARDS INDIA P. LTD VALLIKUNNU, MALAPPURAM REPRESENTED BY ITS EXECUTIVE DIRECTOR MR. V.GOPINATH. BY ADV. SRI.V.PHILIP MATHEW RESPONDENT(S): --------------- 1. THE ASSISTANT COMMISSIONER, INCOME TAX CIRCLE I, TIRUR, MALAPPURAM DISTRICT-676 101 2. COMMISSIONER OF INCOME TAX (APPEALS) AAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE-673 001. BY SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04-01-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).NO. 40033 OF 2015 (D) ---------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------ P1 : COPY OF ASSESSMENT ORDER DT 31-3-2015 FOR THE YEAR 2011-2012 P2 : COPY OF DEMAND NOTICE DT 31-3-2015 ISSUED BY THE FIRST RESPONDENT. P3 : COPY OF APPEAL MEMORANDUM P4 : COPY OF STAY PETITION P5 : COPY OF NOTICE DT 17-6-2015 ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER UNDER SECTION 221(1) OF THE INCOME TAX ACT. P6 : COPY OF JUDGMENT DT 7-7-2015 PASSED BY THIS HON'BLE COURT IN WPC.NO.20359/2015 P7 : COPY OF ORDER DT 25-9-2015 PASSED BY THE SECOND RESPONDENT. P8 : COPY OF ORDER DT 29-9-2015 PASSED BY THE FIRST RESPONDENT UNDER SECTION 154 OF THE INCOME TAX ACT. P9; COPY OF TAX PAYER COUNTERFOIL DT 30-10-2015. P10 : COPY OF TAX PAYER COUNTERFOIL DT 1-12-2015. RESPONDENT(S)' EXHIBITS:NIL ------------------------ //TRUE COPY// P.A TO JUDGE A.K.JAYASANKARAN NAMBIAR, J. ............................................................. W.P.(C).No.40033 of 2015 ............................................................. Dated this the 4th day of January, 2016 J U D G M E N T Against Ext.P1 assessment order, petitioner preferred Ext.P3 appeal before the 2nd respondent. Along with the appeal, the petitioner had also preferred Ext.P4 stay petition. The 2nd respondent has now passed Ext.P7 order on the stay petition directing the petitioner to pay 50% of the amount as a condition for the grant of stay against recovery of the balance amounts confirmed against the petitioner vide Ext.P1 assessment order. 2. In the writ petition, the petitioner impugns the said conditional order of stay, inter alia, on the ground that the 2nd respondent had not exercised his discretion validly while passing the said order. 3. I have heard the learned counsel for the petitioner and also the learned Standing counsel for the respondents. -2- W.P.(C). No.40033 of 2015 On a consideration of the facts and circumstances of the case and submissions made across the bar, I dispose the writ petition with the following directions:- (i) In Ext.P7 order, the 2nd respondent does not state reasons as to why the petitioner was required to deposit the amounts as a condition for the grant of stay. This Court has held in Archana Agencies v Commercial Tax Officer - 2014 (2) KLT 715 that an authority considering a stay petition is bound to give reasons even while granting conditional stay. (ii) Ext.P7 order is quashed and the 2nd respondent is directed to reconsider the matter and pass fresh orders in the stay petition, within two months from the date of receipt of a copy of this judgment after hearing the petitioner. The petitioner shall produce a copy of the writ petition together with copy of this judgment before the 2nd respondent for further action. -3- W.P.(C). No.40033 of 2015 (iii) Recovery steps, if any, initiated against the petitioner shall be kept in abeyance till such time as fresh orders are passed by the 2nd respondent as directed above and communicated to the petitioner. A.K.JAYASANKARAN NAMBIAR JUDGE mns/04.01.16 "