SWARNBHUMI MULTITRADE PVT LTD V. TAX SETTLEMENT COMMI AND ORS

CMS/13202/2016

AI Insights

The case involves Swarnbhumi Multitrade Private Ltd., the petitioner, seeking interim protection from the High Court of Rajasthan against recovery proceedings and penalty notices issued by the Tax Settlement Commission and others, the respondents. The petitioner argued that the writ petition had been admitted, indicating a prima facie case for examination, and thus sought a stay on the proceedings. The respondents countered that the assessment order and any subsequent orders were subject to appeal and thus not directly challengeable in the High Court without first exhausting available remedies. The court, considering the arguments and the existence of alternative remedies, decided not to grant the interim relief sought by the petitioner.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 691404 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 26-10-2016
• Assessment Year: misc
• Other Referred Cases: Mohammad Kunhi vs. Mohammed Koya & Ors.- (1980) 1 SCC 611
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: R B MATHUR; NIKHIL SIMLOTE
• Assessee Lawyers: GUNJAN PATHAK
• Keywords: Assessment orders; Interim protection; Penalty notices; Recovery proceedings; Stay Application
• Section: 220(6)

Judgement Text

"1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. CIVIL MISC. III STAY APPL. NO.13202/2016 IN S.B. CIVIL WRIT PETITION NO.18660/2015 Swarnbhumi Multitrade Private Ltd. vs. Tax Settlement Commission & Ors. DATE OF ORDER : : 26th October, 2016 HON'BLE MR. JUSTICE MOHAMMAD RAFIQ ******* Shri Gunjan Pathak for the petitioner. Shri R.B. Mathur ) Shri Nikhil Simlote) for the respondents-revenue. ## This third stay application has been filed for taking assessment orders and penalty notices issued by the respondents on record and praying for grant of interim protection against the recovery proceedings as also staying any consequential proceeding of penalty. Shri Gunjan Pathak, learned counsel for the petitioner has argued that this Court has admitted the writ petition by order dated 23.8.2016, that would mean that the Court has found prima facie case in favour of petitioner worth examination and so long as the correctness of the impugned order passed by the Settlement Commission is not examined, it cannot be said that the said order is justified. The Court can even be persuaded to set aside the order and in that event the matter be remitted back to the Settlement Commission, 2 where it may have to decide all issues altogether. Learned counsel for the petitioner has submitted that this Court on the first stay petition filed along with writ petition has while passing the order dated 23.8.2016 observed that if any assessment is made in the meanwhile or orders thereon in appeal are passed, they would be subject to the final outcome of this writ petition. Learned counsel submitted that petitioner challenged the aforesaid order before the division bench in D.B. Special Appeal (Writ) No.1238/2016. The division bench by order dated 19.9.2016 has clarified that the order of the learned Single Judge is very clear if any assessment order is passed against the appellant, it will be open for the appellant to approach the learned Single Judge for staying the proceedings. Shri R.B. Mathur, learned counsel for the revenue opposed the stay petition and submitted that the learned Single Judge while deciding the stay petition vide order dated 23.8.2016 not only did not pass any interim order in favour of the petitioner, but taking note of the arguments of respondents that the assessment order, even if passed, would be subject to appeal, clearly observed that if any assessment is made in the meanwhile or orders thereon in appeal passed, they would be subject 3 to the final outcome of this writ petition. So long as the order of assessment is not under challenge before the Court, this court would have no jurisdiction to pronounce upon the validity of the same. In the face of alternative remedy, assessment order cannot be challenged directly before this Court. As far as interim relief is concerned, petitioner has remedy firstly before the Assessing Officer under Section 220 (6) of the Income Tax Act, 1961. Petitioner also has remedy of appeal before the Commissioner of Income Tax (Appeals), who in view of the authoritative pronouncement of Madras High Court in Mohammad Kunhi vs. Mohammed Koya & Ors.- (1980) 1 SCC 611, can also grant appropriate interim relief. Learned counsel for the petitioner submits that petitioner has already filed application for appropriate interim relief against the recovery proceedings before the Assessing Officer under Section 220 (6) of the Income Tax Act, 1961 and would also be filing appeal before the CIT (Appeals). Having heard learned counsel for the parties, this Court for the present does not deem it appropriate to pass any interim order particularly when petitioner has already filed application under Section 220(6) before 4 the Assessing Officer and intends to file appeal before CIT (Appeals) wherein also he can pray for interim relief. Therefore, if the Assessing Officer is not persuaded to grant any interim relief, he may also avail the remedy of appeal before the CIT(Appeals). With that observations, the third stay application is disposed off. (Mohammad Rafiq),J. RS/22 "