HI CARE GLOVES PVT.LTD. V. DEPUTY COMMISSIONER OF INCOME TAX

WP(C)/21526/2019

AI Insights

The case involves Hi Care Gloves Pvt. Ltd., represented by its managing director, who filed a writ petition against the Deputy Commissioner of Income Tax and other respondents due to the freezing of multiple bank accounts as a coercive measure for tax recovery based on two assessment orders. The petitioner, apprehending the execution of these orders, sought a stay on the coercive actions and the freezing of the bank accounts until the appeals against the assessment orders were decided. The court considered the substantial delay in filing the appeals and the legal provisions governing such tax recovery actions. The court's decision balanced the interests of both parties by allowing the petitioner to deposit a portion of the disputed tax and providing a temporary relief from further coercive actions to enable the appeal process.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 766865 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 07-08-2019
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH; N DEEPA; ATHUL SHAJI; PAULOCHAN ANTONY
• Assessee Lawyers: JOHN MATHEW
• Keywords: Bank account freezing; Coercive Proceedings; Delay in appeal; Tax assessment
• Section: 143(3); 246A

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI WEDNESDAY, THE 07TH DAY OF AUGUST 2019 / 16TH SRAVANA, 1941 WP(C).No.21526 OF 2019(M) PETITIONER: HI CARE GLOVES PVT.LTD. MARANGATTUPALLY, KOTTAYAM DISTRICT, PIN - 686 635, REPRESENTED BY ITS MANAGING DIRECTOR, MR. JOHNS A NEERAKKAL, AGED 50 YEARS, S/O. ALEXANDER, NEERAKKAL @ KALLIDUKKIL @ VADAKKEKALAPPURAKKAL HOUSE, KOOTHATTUKULAM POST, ERNAKULAM. BY ADV. SRI.JOHN MATHEW (THEREZHATH) RESPONDENTS: 1 DEPUTY COMMISSIONER OF INCOME TAX WARD NO.V, CENTRAL CIRCLE, KOTTAYAM - 686 001. 2 THE COMMISIONER OF INCOME TAX (APPEALS) PUBLIC LIBRARY BUILDING, LAL BAHADUR SASTHRI ROAD, KOTTAYAM - 686 001. 3 THE STATE BANK OF INDIA MARANGATTUPILLI BRANCH, PALA MARANGATTUPILLY KOZHA ROAD, MARANGATTUPILLI, PIN - 686 635, REPRESENTED BY ITS BRANCH MANAGER. 4 THE KOTTAYAM DISTRICT CO-OPERATIVE BANK, KADAPLAMATTOM BRANCH, KADAPLAMATTOM, KOTTAYAM, PIN - 686 571, REPRESENTED BY ITS BRANCH MANAGER. 5 THE AXIS BANK PALA BRANCH, PUTHUMANA ARCADE, PALA, KOTTAYAM, PIN – 686 575 REPRESENTED BY ITS BRANCH MANAGER WP(C).No.21526 OF 2019(M) 2 6 THE AXIS BANK THODUPUZHA BRANCH, MINI CIVIL STATION, 10/72, A & B, RUBBER MARKETING SOCIETY BUILDING, THODUPUZHA, IDUKKI DISTRICT, PIN - 685 584. BY SRI.JOSE JOSEPH - S.C SMT. N. DEEPA SRI.ATHUL SHAJI SRI.PAULOCHAN ANTONY THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.08.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.21526 OF 2019(M) 3 JUDGMENT The petitioner apprehending imminent execution or realisation of the tax payable by the petitioner vide Exts. P1 and P2 orders, filed Exts.P3 and P4 appeals before the second respondent, with delay of 937 and 555 days respectively and also applications for stay of the assessment orders in Exts.P1 and P2. The petitioner further apprehending realisation of amount pursuant to freezing of Bank Account No: 67091379742 maintained with the State Bank of India at Marangattupally Branch, Account No: 050161000620001 of the Kottayam District Co- operative Bank at Kadaplamattom Branch, Account No: 616010200000347 maintained with Axis Bank at Pala Branch, Account No: 909030033720170 of Axis Bank at Thodupuzha Branch and Account No: 909020033056029 of Axis Bank, Thodupuzha Branch has filed the instant writ petition for the following reliefs:- WP(C).No.21526 OF 2019(M) 4 “i) Direct the second respondent to keep all the coercive proceedings including the freezing of the bank accounts of the petitioner company initiated under Ext.P5 summons under abeyance till the final disposal of the Ext.P3 and P4 appeal. ii) Direct the Respondents 3 to 6 to defreeze the respective banks accounts of the petitioner company bearing No. 67091379742 maintained with the State Bank of India at Marangattupally Branch, Account No: 050161000620001 of the Kottayam District Co-operative Bank at Kadaplamattom Branch, Account No. 616010200000347 maintained with Axis Bank at Pala Branch, Account No: 909030033720170 of Axis Bank at Thodupuzha Branch and Account No. 909020033056029 of Axis Bank, Thodupuzha Branch. iii) Issue such other orders, directions or writ as this Hon'ble Court may deem fit, just and necessary in the interest of justice.” 2. The writ prayers challenge the coercive steps now taken by the respondents for realising the amount determined by the orders in Exts. P1 and P2. 3. Adv. John Mathew Therezhath, by referring to several grounds in fact and law raised in the writ petition firstly attempts to convince this court to stay WP(C).No.21526 OF 2019(M) 5 all further proceedings pursuant to freezing of bank accounts. He alternatively submits that the substantial prayers and grounds are now pending consideration in Exts.P3 & P4 appeals, this Court, if considers directing the second respondent to pass appropriate orders on Exts.P3 and P4 appeals, where the applications for condonation of delay are pending ends of justice are met and to prove bonafides of petitioner, the learned counsel offers to deposit 10% of the tax demanded in Exts. P1 and P2 orders for consideration and disposal of delay condonation petitions in Exts.P3 and P4. 4. The learned Standing Counsel opposes the writ prayers in all fours. The first and foremost objection is against the maintainability of the writ prayers, for the prayers are not independent or stand alone reliefs available to petitioner, in as much as the coercive steps are in the nature of execution of orders which have become final. Unless the assessment orders are set aside or modified to exception to these realisations steps could be taken in the particular fact WP(C).No.21526 OF 2019(M) 6 situation of this case. The orders made by the respondents 1 and 2, freezing bank accounts is either in continuation of tax liability already determined and the accounts are frozen only to recover the tax legitimately determined by the first respondent. The appeals are filed with enormous delay and this Court if shows indulgence and issues direction to the second respondent to consider and dispose of the stay petitions pending in Exts.P3 and P4, such direction in a matter with singular facts does not go with the judicial review this Court exercises under Article 226 of the Constitution of India, particularly, where all the issues are substantially pending before the second respondent. He objects to granting stay or allowing the petitioner to operate the bank accounts referred to above for the petitioner if is allowed to operate the bank accounts, the Department will again have to start the proceedings afresh, in such an event, the Department will also suffer prejudice. 5. I have perused the record and noted the WP(C).No.21526 OF 2019(M) 7 realities staring at the petitioner and also that the appeals now filed before the second respondent are statutory appeals which ought not to be shut out except for valid reasons noted and recorded by the second respondent. 6. While recording the above statement, this Court hastens to add that all issues in this behalf are at large before the second respondent. The second respondent exercises his jurisdiction in accordance with law and no guidance is warranted from Court. Any observation made in this behalf ought not to be appreciated as expressing a view by this Court on the conduct of the petitioner. 7. Be that as it may, all the bank accounts of the petitioner are frozen. The petitioner offers to deposit 10% of the amount determined in Exts.P1 and P2. Now the apprehension voiced by the petitioner is that the first respondent will go to the next step and withdraw the entire tax amount payable by the petitioner from the frozen account. WP(C).No.21526 OF 2019(M) 8 8. Keeping in view the balance of convenience and also enable the petitioner to work out the remedy of appeal, the writ petition is disposed of by this judgment. The case no doubt presents on both sides singular facts, therefore the discretion of this Court is also exercised in a measured way ensuring preservation of the interest of all the parties during the pendency of consideration of delay petitions or disposal of appeals. a) The petitioner deposits 10% of the tax amount demanded through Exts.P1 and P2 within one week from today. b) The petitioner accompanied by a copy of this judgment and also proof of payment of 10% as directed by this Court, appears before the second respondent and requests for consideration and disposal of delay condonation petitions within one week thereafter. c) The second respondent considers and disposes of the delay condonation petitions within two weeks from the date of appearance marked by the WP(C).No.21526 OF 2019(M) 9 petitioner as directed by this judgment. d) The respondents are directed not to recover or realise the amount from the frozen bank accounts for a period of three weeks from today. SD/- S.V.BHATTI JUDGE DCS WP(C).No.21526 OF 2019(M) 10 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 1.12.2016 PASSED BY THE INCOME TAX OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961. EXHIBIT P2 THE TRUE COPY OF THE ASSESSEMNT ORDER DATED 18.12.2017 PASSED BY THE INCOME TAX OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961. EXHIBIT P3 THE TRUE COPY OF THE APPEALS FILED ON EXT.P1 ASSESSMENT ORDER UNDER SECTION 246A OF THE INCOME TAX ACT, 1961 PENDING ON THE FILE OF 2ND RESPONDENT AS CIT (A) 732825511300719. EXHIBIT P4 THE TRUE COPY OF THE APPEALS FILED ON EXT.P1 ASSESSMENT ORDER UNDER SECTION 246A OF THE INCOME TAX ACT, 1961 PENDING ON THE FILE OF 2ND RESPONDENT AS CIT (A) 733797901300719. EXHIBIT P5 THE TRUE COPY OF THE SUMMONS NO. TRO/KTM/TR-9&10/2019-20 DARED 23.7.2019 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P6 THE TRUE COPY OF THE INTERIM APPLICATION FOR STAY FILED ALONG WITH EXT.P3 APPEAL PENDING ON THE FILE OF THE 2ND RESPONDENT. "