THE KERALA STATE COOPERATIVE COIR MARKETING FEDERATION LIMITED V. UNION OF INDIA

WP(C)/5434/2020

AI Insights

The Kerala State Cooperative Coir Marketing Federation Limited, predominantly government-owned, filed a writ petition against various income tax authorities challenging an assessment order and seeking relief from high-pitched tax demands. The petitioner argued that the stay application on the tax demand was not considered, which jeopardized its operations reliant on government subsidies. The court, considering the financial strain on the cooperative society and the nature of the appeal, directed the tax authorities to expedite the hearing of both the appeal and the stay application together, rather than separately addressing the interim stay.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 678334 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 04-03-2020
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax v. B.M.Edward [(1979) 2 Taxman 252]
• Laws Referred To: Income Tax Act, Central Board of Direct Taxes instructions
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P VIJAYAKUMAR; JOSE JOSEPH
• Assessee Lawyers: SHERRY OOMMEN; SUKUMAR OOMMEN; ADITHYA SRIDHAR
• Keywords: Cooperative Society; High-pitched assessment; Rectification Application; Stay Application; Taxpayer Grievances
• Section: 147; 148; 143(3); 153A; 68

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL WEDNESDAY, THE 04TH DAY OF MARCH 2020 / 14TH PHALGUNA, 1941 WP(C).No.5434 OF 2020(D) PETITIONER: THE KERALA STATE COOPERATIVE COIR MARKETING FEDERATION LIMITED PB NO.4616, ALAPPUZHA - 688 012, KERALA INDIA REPRESENTED BY ITS MANAGING DIRECTOR, MR CHANDRASEKHARAN SURESH KUKMAR BY ADVS. SRI.SHERRY SAMUEL OOMMEN SRI.SUKUMAR NAINAN OOMMEN SHRI.ADITHYA SRIDHAR RESPONDENTS: 1 UNION OF INDIA REPRESENTED BY THE SECRETARY TO THE GOVERNMENT DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NEW DELHI - 110 001 2 THE ASSISTANT COMMISSIONER OF INCOME - TAX CIRCLE - I, ALAPPUZHA 3 THE COMMISSIONER OF INCOME - TAX (APPEALS) PUBLIC LIBRARY BUILDING, SHASTRI ROAD, KOTTAYAM - 686 001 4 THE PRINCIPAL CHIEF COMMISSIONER OF INCOME-TAX KERALA, IS PRESS ROAD, KOCHI - 682 018 BY ADV. SRI.P.VIJAYAKUMAR SRI JOSE JOSEPH SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.5434 OF 2020(D) 2 JUDGMENT Petitioner, a Co-operative Coir Marketing Federation Limited where the Government is holding 99% of shares has approached this Court with the following prayers: “I. issue a writ, order or direction staying coercive proceedings pursuant to Exhibit P3 order, pending disposal of Exhibit P6 stay application and Exhibit P7 application seeking early hearing of appeal, filed before the 3rd respondent. II. Issue a writ, order or direction to the 3rd respondent requiring the latter to dispose Exhibit P5 appeal in a time- bound manner. III. Issue a writ, order or direction to the 2nd respondent requiring the latter to dispose Exhibit P8 rectification application in a time-bound manner. IV. To a writ, order or direction to the 4th respondent requiring constitution of a Local Committee to deal with tax payer grievances in case of high-pitched assessment in accordance with Exhibit P10 instruction. V. Issue such other and further reliefs as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.” 2. Against the order of assessment dated 21.12.2019 issued by the 2nd respondent Ext.P3, the petitioner has preferred WP(C).No.5434 OF 2020(D) 3 appeal and stay application Exts. P5 and P6 before the 3rd respondent and even an early application for taking up the appeal. Since the stay application has not been taken even an attempt has been made for seeking rectification of the order of assessment by moving an application dated 19.02.2020 (Ext.P8). 3. Mr.Sukumar Ninan Oommen, the learned counsel appearing on behalf of the petitioner submits that in the absence of consideration of the application for stay, the demand in the assessment order is too high that the society would not be in a position to carry on the activity as every transaction is based upon remittance of a subsidy by Government. His clients would be satisfied in case an appropriate direction is issued for deciding the appeal itself, instead of addressing the issue on interim stay. 4. In addition to the aforementioned prayer reliance has been laid to the circulars and necessary instructions and guidance of Income Tax Officers on the matter pertaining to assessment and Full Bench judgment of this Court in Commissioner of Income Tax v. B.M.Edward [(1979) 2 Taxman 252] and it has been submitted that the instruction issued by the Central Board of Direct Taxes are having a binding effect on the Income Tax Officers. Ext.P10 instructions dated 09.11.2015 mandate the WP(C).No.5434 OF 2020(D) 4 constitution of a local committee to deal with the grievances of the tax payers regarding the high pitched assessments, but no such grievance committee has been constituted and in such circumstances petitioner's grievance remains in a quandary. 5. As far as the relief of constitution of the grievance committee is concerned by taking reliance to Ext.P10, I am of the view that such relief cannot be sought in the present writ petition. The petitioner in the said circumstances would have independent cause of action for constitution of the grievance committee. As far as the other relief of issuance of an appropriate direction, I am of the view that keeping in view the peculiar facts and circumstances that the Co-operative Society is virtually on a ventilator and its pulse is based upon the remittance of subsidy, it could be a farcical exercise for the appellate authorities to focus on the adjudication of the interim application, as the arguments in the main appeal would be the same what can be addressed in the interim application. Accordingly, I dispose of this writ petition with a direction to the 3rd respondent to decide the appeal and stay application together (Exts.P5 and P6) as expeditiously as possible, after affording an opportunity of hearing to the parties to the lis within WP(C).No.5434 OF 2020(D) 5 a period of two months from the date of receipt of a certified copy of this judgment. The petitioner is at liberty to seek stay of the demand in interim application. This writ petition stand disposed of. Sd/- AMIT RAWAL nak JUDGE WP(C).No.5434 OF 2020(D) 6 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 A COPY OF THE ACKNOWLEDGMENT SHEET OF THE RETURN OF INCOME FILED BY THE PETITIONER FOR AY 2017-18 EXHIBIT P2 A TRUE COPY OF THE COMPUTATION SHEET QUA DETERMINATION OF TOTAL INCOME AND RESULTANT TAX LIABILITY FOR AY 2017-18 EXHIBIT P3 A COPY OF THE ASSESSMENT ORDER DATED 21.12.2019 ISSUED BY THE 2ND RESPONDENT EXHIBIT P4 A COPY OF THE AUDITED FINANCIAL STATEMENTS OF THE PETITIONER FOR AY 2017-18 EXHIBIT P5 A COPY OF THE APPEAL FILED BY THE PETITIONER DATED 21.01.2020 BEFORE THE 3RD RESPONDENT EXHIBIT P6 COPY OF STAY APPLICATION DATED 20.02.2020 FILED BEFORE THE 3RD RESPONDENT EXHIBIT P7 COPY OF THE EARLY APPLICATION DATED 20.02.2020 FILED BEFORE THE 3RD RESPONDENT IN RESPECT OF EXHIBIT P5 APPEAL EXHIBIT P8 A COPY OF THE RECTIFICATION APPLICATION FILED BY THE PETITIONER DATED 19.02.2020 EXHIBIT P9 A COPY OF THE INSTRUCTION DATED 02.02.1993 AND THE CIRCULAR DATED 29.02.2016 ISSUED BY THE 1ST RESPONDENT EXHIBIT P10 A COPY OF THE INSTRUCTION DATED 09.11.2015 MANDATING CONSTITUTION OF LOCAL COMMITTEES TO DEAL WITH TAX PAYER GRIEVANCES REGARDING HIGH PITCHED ASSESSMENTS //TRUE COPY// P.A TO JUDGE "