2011 (2) TMI 516 - HC - Income Tax

Demand - Stay petition - the petitioners may be directed to deposit a part of the tax liability assessed against them, this Court is of the considered view that the impugned orders are liable to be set aside as it is unsustainable in the eye of law - it is made clear that the respondents shall not take any coercive action against the petitioners, in respect of tax amounts to be collected from them, based on the impugned demands - Accordingly the writ petition are disposed of

Summary

Issues:

1. Consideration of relevant issues in stay petitions.
2. Validity of rejection of stay petitions.
3. Direction to deposit part of tax liability.
4. Setting aside impugned orders.
5. Direction to dispose of pending appeals.
6. Prohibition of coercive action for tax collection.

Analysis:

1. The main contention raised was that all relevant issues were not considered as per circulars and court decisions while disposing of stay petitions. The impugned order rejected the stay petitions citing little chances of success in appeal, indicating that the second respondent exceeded the scope of the petitions.

2. The respondent suggested directing the petitioners to deposit a part of the tax liability assessed. However, the Court deemed the impugned orders unsustainable in the eyes of the law and set them aside. It further directed the second respondent to dispose of pending appeals within four weeks, with the petitioners' cooperation, clarifying that no coercive action should be taken for tax collection based on the demands.

3. Consequently, the Writ Petitions were disposed of with the above directions, and connected miscellaneous petitions were closed without any order as to costs. The judgment focused on rectifying the errors in the handling of stay petitions and ensuring a fair process in the disposal of appeals, while protecting the petitioners from coercive tax collection actions.