Introduction: A recent writ petition before the Kerala High Court involved Kolloorvila Service Co-Operative Society Ltd, which sought relief concerning the assessment and demand notice issued by the Income Tax department. The court’s decision in this case emphasizes the importance of considering an interim stay order before initiating income tax recovery proceedings, ensuring a fair and just process.
1. Background of the Case: Kolloorvila Service Co-Operative Society Ltd filed a writ petition under Article 226 of the Constitution of India, seeking various reliefs. The central issue revolved around the appeal against the assessment order (Ext.P2) and the associated demand notice (Exts.P4). The petition pertained to an amount of Rs. 1,08,03,015, which the petitioner sought to stay.
2. Appeal and Demand Notice: The appeal against the assessment order and demand notice was assigned the number NFAC No. 2019-20/10181580. However, the petitioner faced challenges in uploading the interim application for staying the demand notice. Despite the pending appeal, the income tax authorities were proceeding with efforts to recover the outstanding amount.
3. Petitioner’s Request: The primary request made by the petitioner’s counsel was for the appellate authority to decide the interim application within a specified time frame after the petitioner successfully uploaded it.
4. Revenue’s Response: Mr. Christopher Abraham, representing the Revenue, did not raise significant objections to the petitioner’s request for a time-bound consideration of the stay application.
5. Court’s Decision: The Kerala High Court issued the following directives in response to the facts presented:
Conclusion: The Kerala High Court’s decision in this case highlights the court’s commitment to ensuring a fair and just process in income tax recovery proceedings. By directing the consideration of an interim stay order before proceeding with recovery efforts, the court acknowledges the importance of giving taxpayers a reasonable opportunity to address their outstanding tax obligations. This ruling reinforces the principles of due process and the need to balance tax collection with the rights of taxpayers, contributing to a more equitable tax system.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The present writ petition under Article 226 of the Constitution of India has been filed seeking the following reliefs:
“A. Issue a writ of mandamus or other appropriate writ, order or direction commanding the 2nd respondent to consider Exhibit P5 appeal filed by the petitioner society on merits and pass orders within a time prescribed by this Honourable Court.
B. Issue a writ of mandamus or other appropriate writ order or direction commanding the 1sT respondent not to proceed further with the coercive steps against the petitioner society pursuant to Exhibits P2 assessment order till Exhibit P5 appeal is finally heard and disposed of by the 2nd
C. Grant such other relief which this Honourable Court deem just and proper in the circumstance of the case.”
2. The appeal filed against the assessment order (Ext.P2) and demand notice (Exts.P4) has been numbered as NFAC No.2019-20/10181580. The petitioner, however, could not upload the interim application for staying the demand notice for an amount of Rs.1,08,03,015/- dated 23.09.2022.
3. The present petition has been filed by the petitioner on the ground that the appeal has not been decided, and the respondents are proceeding to realise the demand amount. The limited prayer of the learned Counsel for the petitioner in the present writ petition is that the appellate authority be directed to decide the interim application within a time-bound manner after he uploads the same.
4. Mr Christopher Abraham, learned Counsel for the Revenue, does not have much objection to the prayer of the petitioner so far as deciding the stay application in a time- bound manner.
5. Considering the aforesaid facts and submissions, the present writ petition is disposed of:
(i) with a direction to the National Faceless Appeal Centre (NFAC), Delhi, to provide a link to the petitioner within two weeks allowing the petitioner to upload the interim application for staying the demand notice (Ext.P4) dated 23.09.2022.
(ii) The petitioner should upload the interim application on the same day when the link is provided.
(iii) The National Faceless Appeal Centre or the appellate authority dealing with the appeal is directed to decide the application in accordance with the law within two weeks thereafter.
(iv) For a period of one month, the impugned demand notice (Ext.P4) dated 23.09.2022 and Ext.P6 dated 20.07.2023 shall not be enforced.