VISHAL FERRO ALLOYS PVT. LTD. V. UNION OF INDIA

WP(C)/25665/2021

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M/s. Vishal Ferro Alloys Pvt. Ltd. filed a writ petition against the Union of India and others, challenging an order by the Principal Commissioner of Income Tax, Sambalpur, which mandated the petitioner to pay 20% of an outstanding tax demand in installments as a precondition for staying the demand. The petitioner argued that a similar case had been favorably decided by the Delhi High Court and not interfered with by the Supreme Court, which revised the standard rate for grant of stay from 15% to 20% of the disputed demand. However, the Orissa High Court found that the impugned order did not reference the CBDT circular that could have influenced the decision and noted that the petitioner's financial condition, which was severe enough to warrant installment payments, had been acknowledged in the order.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 745597 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 25-10-2021
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income Tax 5 v. M/s LG Electronics India Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: P K PARHI; S S MOHAPATRA
• Assessee Lawyers: AVIJIT PATNAIK
• Keywords: Financial condition; Installment Payment; Stay of demand
• Section: 147; 144

Judgement Text

" Page 1 of 3 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.25665 of 2021 M/s. Vishal Ferro Alloys Pvt. Ltd. …. Petitioner Mr. Avijit Patnaik, Advocate -versus- Union of India and others …. Opposite Parties Mr. P.K. Parhi, Asst. Solicitor General Mr. S.S. Mohapatra, Senior Standing Counsel CORAM: THE CHIEF JUSTICE JUSTICE B.P. ROUTRAY Order No. ORDER 25.10.2021 03. 1. The Petitioner is aggrieved by an order dated 13th August 2021, passed by the Principal Commissioner of Income Tax, Sambalpur (PCIT) requiring the Petitioner to pay 20% of the outstanding demand in five equal monthly installments within 30th August 2021 ending on 30th December 2021 of Rs.19,21,360/- each as a condition for stay of the demand raised by the Assessing Officer by the Assessment Order under Sections 144/147 of the Income Tax Act, 1961 for the assessment year (AY) 2012-13. 2. Learned counsel appearing for the Petitioner first seeks to rely on the order dated 8th August 2017 passed by the High Court of Delhi in W.P.(C) No.6778 of 2017 which was not Page 2 of 3 interfered with by the Supreme Court by its order dated 20th July 2018 in Civil Appeal No.6850 of 2018. In the said order, the Supreme Court clarified that the administrative circular issued by the Central Board of Direct Taxes (CBDT) on 29th February 2016 stating that the standard rate for grant of stay had been revised from 15% to 20% of the disputed demand would not operate as a fetter on the Commissioner who is a quasi judicial authority. It was clarified that “it will be open to the authorities, on the facts of individual cases, to grant deposit orders of a lesser amount than 20%, pending appeal.” 3. The Court finds that in the impugned order dated 13th August 2021, there is no reference made to any such circular. In other words, the order does not turn on the fact that the aforementioned CBDT circular requires stay to be granted only upon deposit of a sum equivalent to 20% of the disputed amount. Consequently, the order of the Delhi High Court and the consequential order of the Supreme Court in Principal Commissioner of Income Tax 5 v. M/s LG Electronics India Pvt. Ltd. is of no assistance to the Petitioner. 4. On the merits of the impugned order, learned counsel for the Petitioner only states that the Petitioner is in dire financial condition and therefore will not be able to pay even 20% of the demanded amount. The Court notes that the Page 3 of 3 difficulty faced by the Petitioner has already been taken note of by the PCIT in the impugned order which is why the Petitioner has been given the facility of apyment in instalments. 5. In the circumstances, the Court is not inclined to interfere with the impugned order of the PCIT. The writ petition is dismissed, but in the circumstances, no order as to costs. 6. An urgent certified copy of this order be issued as per rules. (Dr. S. Muralidhar) Chief Justice ( B.P. Routray ) Judge S.K. Guin "