Case Law Details
Chalakkal Antony Jose Valloor Vs Additional/ Joint/ Deputy/ Assistant CIT (Kerala High Court)
Introduction: In a significant ruling, the Kerala High Court Division Bench has provided relief to taxpayers by staying coercive income tax recovery measures while an appeal and stay petition are pending. The judgment, delivered on a writ appeal (Chalakkal Antony Jose Valloor Vs Additional/ Joint/ Deputy/ Assistant CIT), modifies the order of a learned Single Judge concerning the procedure for handling coercive recovery steps initiated by the Income Tax Department against the appellant.
Detailed Analysis: The appellant, aggrieved by Ext.P13 order, sought judicial intervention against coercive steps for the recovery of confirmed demands by filing WP(C) No.37397/2023. The core of the appellant’s argument revolved around the appeal (Ext.P14) and stay petition (Ext.P17) filed before the Appellate Authority against the order, alongside an application (Ext.P19) for expedited hearing of the appeal. Despite these pending proceedings, the department initiated recovery actions, prompting the appellant to seek relief from the High Court.
The learned Single Judge’s decision to direct the Appellate Authority to consider the stay application, without halting the recovery proceedings, led to the filing of the writ appeal. The Division Bench, acknowledging the situation, underscored the necessity of providing interim relief to the appellant during the pendency of statutory appeals. The Bench opined that safeguarding the appellant from coercive recovery actions until the disposition of the stay petition or appeal by the appellate authority is a balanced approach that upholds the principles of justice and fairness.
Conclusion: The Kerala High Court’s intervention in staying coercive income tax recovery measures pending the resolution of an appeal and stay petition is a laudable step towards protecting taxpayers’ rights. This judgment emphasizes the importance of allowing due legal processes to unfold without undue financial pressure on appellants. It ensures that taxpayers are not unduly burdened by recovery actions while their appeals are being considered, thus preserving the integrity of the judicial review process. The decision is a testament to the judiciary’s commitment to ensuring that administrative actions do not preempt or prejudice the outcome of pending legal proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner in WP(C).No. 37397 of 2023 is the appellant herein aggrieved by the judgment dated 20.12.2023 in the Writ Petition. The brief facts necessary for disposal of this Writ Appeal are as follows:
2. The appellant had impugned Ext.P13 order before this Court in the writ petition when confronted with recovery steps for recovery of the amounts confirmed against it by the order. It was the case of the appellant that against Ext.P13 order, he has preferred Ext.P14 appeal along with Ext.P17 stay petition before the 2nd respondent, the Appellate Authority. The appellant has also preferred Ext.P19 application before the 3rd respondent seeking out of turn hearing of the appeal. In the meantime, coercive steps were taken for realisation of the demands. Therefore, the appellant preferred WP(C) No.37397/2023 before this Court. The learned Single Judge disposed of the writ petition with a direction to the 2nd respondent to consider and pass appropriate order on Ext.P17 stay application. The learned Single Judge, however, did not grant stay of recovery proceedings pending disposal of the stay petition by the said respondent.
3. We have heard Sri. Nithish Sathesh Shenoy, the learned counsel for the appellant and Sri. G. Keerthivas, the learned Standing counsel for the Income Tax Department.
4. In our view, since the learned Single Judge had relegated the appellant to the alternative remedy before the statutory authority, it was incumbent upon the learned Judge to protect the appellant from recovery proceedings pending disposal of the petitions by the respondent appellate authority. Accordingly, we modify the impugned judgment of the learned Single Judge to the limited extent of clarifying that pending disposal of the stay petition or appeal, whichever is earlier by the appellate authority, the recovery proceedings against the appellant for recovery of the amounts confirmed against it by Ext.P13 order shall be kept in abeyance. Ext.P19 application for early hearing of the appeal shall also be considered by the 3rd respondent in accordance with law. Save for this limited modification, the rest of the directions in the impugned judgment are not interfered with.
The writ appeal is disposed of as above.
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