KERALA STATE BEVERAGES (M&M) CORPORATION LTD. V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1) TRIVANDRUM

WP(C)/11983/2012

AI Insights

The case involves M/S. Kerala State Beverages (M&M) Corporation Ltd., a government-owned company engaged in the liquor trade in Kerala, challenging an order by the Commissioner of Income Tax (Appeal) - I, which imposed a condition on the petitioner to satisfy an additional 15% of the total alleged tax liability of over '1.5 billion' despite the petitioner having already satisfied 60% of the demand. The dispute arose from an assessment order for the year 2009-10, which the petitioner contested through appeals and writ petitions. The High Court's decision focused on the financial stability of the petitioner and the nature of the deductions in question, deciding not to delve into the merits of the case due to the ongoing appeal process.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 699651 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 25-05-2012
• Assessment Year: misc
• Other Referred Cases: WP(C) No.8319 of 2012
• Laws Referred To: Companies Act 1946, Section 143(3), Section 220(6)
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: ANIL NAIR; J R NAVAZ; NIVEDITA KAMATH
• Keywords: Appeal; Assessment Order; Income Tax; Liquor Trade; Stay Petition; Monopoly Business
• Section: 143(3); 220(6); 617

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 25TH DAY OF MAY 2012/4TH JYAISHTA 1934 WP(C).No. 11983 of 2012 (W) --------------------------- PETITIONER : -------------------- M/S. KERALA STATE BEVERAGES (M&M) CORPORATION LTD., P.B.2263, SASTHAKRIPA OFFICE COMPLEX, SASTHAMANGALAM THIRUVANANTHAPURAM. BY ADVS.SRI.ANIL D. NAIR SRI.J.R.PREM NAVAZ SMT.NIVEDITA A.KAMATH RESPONDENT(S): -------------------------- 1. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1), TRIVANDRUM - 695 003. 2. THE COMMISSIONER OF INCOME TAX (APPEAL) - I,, KOWDIAR,TRIVANDRUM-695003. R1 & R2 BY ADV. SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25-05-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Mn ...2/- WP(C).No. 11983 of 2012 (W) APPENDIX PETITIONERS' EXHIBITS : EXT-P1 TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2009-2010 DATED 30.11.2011 ISSUSED TO THE PETITIONER BY THE FIRST RESPONDENT. EXT-P2 TRUE COPY OF THE APPEAL FILED BY THE PETITITIONER BEFORE THE 2ND RESPONDENT. EXT-P3 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXT-P4 TRUE OCPY OF THE ORDER DATED 22.03.2012 DISMISSING THE STAY PETITION. EXT-P5 TRUE COPY OF THE JUDGMENT DATED 03.04.2012 IN WP(C) NO.8319 OF 2012 EXT-P6 TRUE COPY OF THE ORDER NO.ITA 32/TVM/11-12 DATED 17.05.2012 ISSUED BY THE 2ND RESPONDENT. RESPONDENTS' EXHIBITS : NIL //TRUE COPY// P.A. TO JUDGE Mn P.R.RAMACHANDRA MENON, J. - - - - - - - - - - - - - - - - - - - - - W.P.(c) No.11983 OF 2012 - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 25th day of May, 2012 JUDGMENT Correctness and sustainability of Ext.P6 order passed by the second respondent imposing a condition upon the petitioner to satisfy 15% of the total alleged liability of more than '1.5 billion', inspite of the factual position admitted that the petitioner has already satisfied 60% of the demand, is sought to be intercepted in this writ petition because of the pendency of the appeal and the nature of challenge involved. 2. The petitioner is a fully owned Government of Kerala undertaking - a public limited company under Section 617 of the Companies Act 1946. The petitioner is doing 'some sort of monopoly business' in liquor trade in Kerala, as done by another entity as well. In respect of the assessment year 2009-10, the petitioner had filed return, but subsequently it was decided to file a revised return, which was selected for scrutiny under Section 143(3) leading to Ext.P1 assessment order fixing a total liability of Rs.1,50,94,88,150/-. WPC.No.11983/12 2 3. Being aggrieved of the said order, the petitioner preferred Ext.P2 appeal before the second respondent on 07/02/2011. An application was also preferred before the concerned authority under Section 220(6) and considering the same, the petitioner was directed as per Ext.P4 order, to satisfy the balance demand in respect of the remaining 47.78 crores by way of equal monthly instalments @ Rs. 3 crores each, commencing from April 2012. 4. This made the petitioner to approach this Court by filing W.P.(C)No.8319/2012 challenging Ext.P4. After hearing both sides, the said writ petition was disposed of, directing the second respondent/appellate authority to consider the I.A. for stay and to pass appropriate orders as specified. Pursuant to the said verdict, the matter was considered by the second respondent, who passed Ext.P6 order directing to satisfy yet another extent of 15% over and above the extent of 60% of the demand already satisfied,which according to the petitioner is not correct and sustainable. 5. Heard the learned standing counsel for the department as well. WPC.No.11983/12 3 6. Going by the materials on record, it remains a fact that, out of the total liability of more than '1.5 billion' fixed upon the petitioner, the petitioner satisfied 60% as conceded by the second respondent himself in Ext.P6 while granting interim stay, imposing a further condition so as to avail the benefit thereunder. 7. Learned counsel for the petitioner submits that there is every chance for allowing the appeal, for the fact that the only issue is whether the 'turn over tax' and the 'surcharge' paid by the petitioner are 'allowable deductions' or not. Since the matter is pending consideration before the second respondent, this Court does not find it fit to go into the merits of the case. It is an undisputed fact that, out of the alleged total liability, 60% stands satisfied. That apart, the petitioner being a fully owned Government undertaking, the respondents need not be apprehensive of the possible chance of realisation of the amount if at all due from the hands of the petitioner, as and when the proceedings are finalized. In the above circumstances, the condition imposed by the second respondent in Ext.P6 directing the petitioner to satisfy a further extent WPC.No.11983/12 4 of 15% is waived and the petitioner is declared as eligible to avail the benefit of absolute stay during the pendency of the appeal. It is for the second respondent to finalise the appeal, in accordance with law, as expeditiously as possible. Writ petition is disposed of. P.R.RAMACHANDRA MENON JUDGE sv. WPC.No.11983/12 5 "