Maa Danateshwari Vs Central Board of Direct Taxes Through Its Chairman (Chhattisgarh High Court)
Chhattisgarh High Court set aside an order requiring Maa Danateshwari to deposit 20% of the outstanding tax amount during the pendency of an appeal. The petitioner had challenged the assessment order, arguing that the tax demand arose due to the non-availability of PAN cards of marginal maize farmers. While the appeal was pending before the tax authorities, the petitioner sought a stay on the demand, which was denied solely on the ground of non-deposit of 20% of the disputed amount. The petitioner contended that this approach was contrary to established legal principles, as similar cases had been decided by the Bombay High Court and followed by the Chhattisgarh High Court in earlier rulings.
The court reviewed previous judgments, including M/s. Aarti Sponge & Power Ltd. and KEC International Ltd., which emphasized that stay applications should be decided based on multiple factors, including financial hardship and potential irreparable harm. The court observed that the impugned order failed to consider these aspects and had imposed the pre-deposit requirement mechanically. It ruled that the order must be reconsidered in accordance with judicial guidelines. Consequently, the High Court remitted the case to the competent authority, directing it to pass a fresh, reasoned order within four weeks. The writ petition was allowed to the extent of setting aside the pre-deposit condition.
