Gaurav Enterprises Vs Union of India And Ors (Calcutta High Court)
The Calcutta High Court addressed a writ petition filed by Gaurav Enterprises challenging the Income Tax authorities’ recovery of amounts exceeding 20% of a disputed tax demand from refunds pertaining to other assessment years. The dispute arose from an assessment order dated April 17, 2021 under Section 143(3) read with Section 144B of the Income Tax Act, 1961 for the assessment year 2018-19, resulting in a demand of ₹9,19,33,664. The petitioner filed an appeal against the assessment order on August 3, 2021 before the Commissioner of Income Tax (Appeals) under Section 246A and also sought a stay of demand from the assessing officer on September 29, 2021. Despite the pending appeal, the authorities recovered ₹5,01,16,180 by adjusting amounts refundable to the petitioner for assessment years 2020-21 to 2023-24.
The petitioner contended, relying on precedents in Danieli India Limited vs. Assistant Commissioner of Income Tax and Graphite India Limited vs. Deputy Commissioner of Income Tax, that recovery beyond 20% of the disputed demand while the appeal was pending was impermissible. Conversely, the Revenue argued that recovery of the entire demand was lawful unless the petitioner deposited 20% of the disputed amount, referencing Section 220(6) and the Delhi High Court judgment in Chemester Food Industry (P.) Ltd.. The Revenue maintained that there was no legal prohibition against recovering the full demand if a stay was not granted and that such discretion rested with the assessing officer.
