2012 (6) TMI 14 - HC - Income Tax

Correctness and sustainability of order imposing a condition upon the petitioner to satisfy further 15% of the total alleged liability, inspite of the fact that the petitioner has already satisfied 60% of the demand - petition sought interception of order because of the pendency of the appeal and the nature of challenge involved - Held that - It is an undisputed fact that, out of the alleged total liability, 60% stands satisfied. That apart, the petitioner being a fully owned Government undertaking, the respondents need not be apprehensive of the possible chance of realisation of the amount if at all due from the hands of the petitioner, as and when the proceedings are finalized. Such condition imposed is waived off and the petitioner is declared as eligible to avail the benefit of absolute stay during the pendency of the appeal - Decided in favor of petitioner.

Summary

Issues: Correctness and sustainability of Ext.P6 order imposing a condition on the petitioner, challenge to the assessment order, appeal against the order, stay of demand, allowable deductions in tax assessment.

The judgment addresses the correctness and sustainability of the Ext.P6 order passed by the second respondent, which imposed a condition on the petitioner to satisfy 15% of the total alleged liability of over '1.5 billion', despite the petitioner having already satisfied 60% of the demand. The petitioner, a fully owned Government of Kerala undertaking engaged in liquor trade, filed a return for the assessment year 2009-10, which was later revised and subjected to scrutiny under Section 143(3), resulting in an assessment order fixing a total liability of Rs.1,50,94,88,150/-. The petitioner appealed against this order, and an interim order directed the petitioner to pay the balance demand in monthly installments. Subsequently, the petitioner challenged this order in a writ petition, which led to the Ext.P6 order by the second respondent, requiring further payment from the petitioner. The court considered the petitioner's argument that the 'turn over tax' and 'surcharge' paid should be considered as allowable deductions, a matter pending before the appellate authority, and decided to waive the additional payment condition imposed by the second respondent, allowing the petitioner to avail absolute stay during the appeal process.

The judgment emphasizes that the petitioner had already satisfied 60% of the alleged total liability, as admitted by the second respondent, and highlights the petitioner's status as a fully owned Government undertaking, indicating a low risk of non-realization of dues. The court refrained from delving into the merits of the case, considering the pending appeal before the second respondent concerning the deductibility of certain taxes. The decision ultimately declares the petitioner eligible for absolute stay of the demand during the appeal process, leaving the finalization of the appeal to the second respondent in accordance with the law and urging expeditious resolution of the matter.