Kunj Bihari Lal Agarwal V. Principal Commissioner Of Income Tax (Central), Jaipur and Deputy Commissioner Of Income Tax, Central Circle-2, Jodhpur

CW/10007/2023

AI Insights

The case involves Kunj Bihari Lal Agarwal, a businessman in handicrafts, who sought a stay against the demand for tax assessments for the years 2014-15, 2016-17, and 2020-21, which were reopened based on a survey report. Initially, the tax authority required a deposit of 20% of the demand for the stay, which was later reduced to 10% following a previous writ petition by Agarwal that criticized the mechanical application of administrative instructions without proper judicial consideration. The High Court of Rajasthan found that the tax authority had adequately considered the petitioner's case and submissions in their latest decision, thus dismissing the writ petition.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 795752 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 07-02-2024
• Assessment Year: misc
• Other Referred Cases: Shree Balaji Metasteels Private Ltd.
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K K BISSA
• Assessee Lawyers: SHARAD KOTHARI
• Keywords: Administrative instructions; Judicial mind; Re-assessment; Stay against demand; Handicraft business; High Pitched Scrutiny Assessment Committee

Judgement Text

"[2024:RJ-JD:6298-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 10007/2023 Kunj Bihari Lal Agarwal S/o Shri Ram Avtar Agarwal, Aged About 43 Years, R/o A-253 Shastri Nagar, Jodhpur (Rajasthan) 342003. ----Petitioner Versus 1. Principal Commissioner Of Income Tax (Central), Jaipur, Central Revenue Building, B.d. Road, Jaipur. 2. Deputy Commissioner Of Income Tax, Central Circle-2, Jodhpur, Room No. 133 Aayakar Bhawan Paota C Road, Jodhpur. ----Respondents For Petitioner(s) : Mr. Sharad Kothari For Respondent(s) : Mr. K.K. Bissa HON'BLE THE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE MUNNURI LAXMAN Order 07/02/2024 1. Heard. 2. This second round of petition, at the instance of assessee, is in the matter of prayer for stay against demand. 3. The petitioner carries on the business of Handicraft. The facts which are borne out from the record of the case are that assessment for the years 2014-15 and 2016-17 were re-opened on the basis of a survey report, which eventually led to an order dated 07.03.2022 for the years 2014-15 and 2016-17. Another order was passed on 21.11.2022 in respect of the assessment year 2020-21. [2024:RJ-JD:6298-DB] (2 of 5) [CW-10007/2023] 4. Aggrieved by the aforesaid orders, the petitioner invoked statutory remedy of appeal before the appellate authority which is pending consideration. 5. On petitioner’s prayer for stay of demand pending consideration of the appeal, the authority proceeded to pass an order directing the petitioner to deposit 20% of the demand. The petitioner approached this Court by filing a writ petition being D.B. Civil Writ Petition No. 3776/2023, mainly on the ground that the order disposing off the prayer for stay was more-or-less mechanical, without application of judicial mind and abdicating judicial functions by mechanically following the administrative instructions. The plea of the petitioner found favour with this Court and an order dated 01.05.2023 was passed, by which the writ petition was allowed directing the matter to be reconsidered. 6. Thereafter, the authority considered the case of the petitioner and passed a fresh order on prayer for stay on 12.06.2023, which is impugned in this petition. It be noticed that after consideration of the application, the order of demand has been stayed subject to depositing 10% of the demand. 7. In the second round of writ petition, learned counsel for the petitioner now submits that the authorities have again committed patent illegality and perversity and acted with arbitrariness in deciding the petitioner’s application. Learned counsel for the petitioner would submit that the authorities are applying different yardsticks on more-or-less similar cases. Referring to another case of Shree Balaji Metasteels Private Ltd., it is submitted that in that case there was an absolute stay without even demanding 10% to be deposited. It is also submitted that though the department’s [2024:RJ-JD:6298-DB] (3 of 5) [CW-10007/2023] circular dated 23.04.2022 required the matter to be referred to the High Pitched Scrutiny Assessment Committee, that procedure has not been resorted to and the stay application has been disposed off. Learned counsel for the petitioner would further submit that the authority has again not applied due and proper application of mind to each and every submission, details and various figures with regard to receipt expenditure in order to carry out assessment. 8. On the other hand, learned counsel for the respondents would submit that after the order was passed by this Court in the first round of litigation, the authority has duly applied its mind and has passed a detailed order. He would submit that the authority, after consideration of the material on record and further taking into consideration the submissions of the petitioner, has directed that subject to payment of 10% of the demand, there shall be stay against recovery of the balance amount. 9. We have gone through the record and considered the submissions of learned counsel for the parties. 10. When the petitioner approached this Court by filing a writ petition earlier, this Court found that there was no proper application of mind and the authority, treating itself to be bound by administrative instructions, abdicated its judicial functions while deciding the matter. That prompted this Court to direct the authorities to re-consider the matter. We have gone through the order which has been passed by the authority while considering and disposing off the prayer for stay. The order refers to the material on record, the case of the petitioner, submissions [2024:RJ-JD:6298-DB] (4 of 5) [CW-10007/2023] followed by the order with regard to stay of recovery of demand, subject to payment of 10% of the demand. 11. In our view, the authority having jurisdiction, has passed a brief order, keeping in view that it is only deciding the stay application and not the merits of the case. The argument of learned counsel for the petitioner that various figures and details which were given by him have not received consideration, does not merit acceptance. At this stage of consideration of stay application, the authority is not expected to go deep into the matter as if it is deciding the appeal finally. We find that the authority has not restricted the relief of 20% but has granted stay subject to deposit of only 10% of the demand. The demand is based on order of assessment. The matter is in appeal. It is a tax matter and a party cannot, as a right, claim that merely because he files an appeal, the demand should be stayed. 12. Various submissions which ave been made before this Court pertain to the merits of the case, which we are not going to decide and leave it open. 13. It is well settled legal position that while entertaining a writ petition, the writ Court would not reassess the material on record and record its own findings of fact in substitution of what has been recorded. Further, if it is a case arising out of an order on stay application, the scope of judicial review is further restricted. It is not a case where the stay application has been decided without hearing the petitioner. 14. In the absence of there being any procedural impropriety affecting the order on stay application, we are not inclined to interfere with the order. [2024:RJ-JD:6298-DB] (5 of 5) [CW-10007/2023] 15. The grievance that in some other case absolute stay was granted, cannot be accepted. No parity could be claimed in the matter of stay. Every case has its own facts and circumstances. 16. The petitioner’s claim that even before deciding the stay application, the case ought to be mandatorily referred to High Pitched Scrutiny Assessment Committee, does not impress us. It is always open for the appellate authority to take recourse to the procedure as embodied in circular dated 23.04.2022 and at appropriate stage the step of referring the matter to the High Pitched Scrutiny Assessment Committee could be taken by the appellate authority. We would not say any further on this aspect as the authority is yet to take decision on the merits of the appeal. 17. In view of the above, leaving all questions of merits open to be decided by the appellate authority, the present petition is dismissed. (MUNNURI LAXMAN),J (MANINDRA MOHAN SHRIVASTAVA),CJ 37-jayesh/- "