2013 (2) TMI 182 - HC - Income Tax

Liability of tax - Held that - There is a huge demand against the petitioner, a communication directing the petitioner to pay Rs. 5,00,000/- by 10.1.2013 is fair and reasonable so as to secure the interest of the revenue and also granting relief to the petitioner so as to permit the Appellate Court to hear the appeal on merits as well. Petitioner is duty bound to pay the duty amount of tax and the penalty. The petitioner was granted indulgence at one stage for deferring the payment of tax and penalty but subsequently, on a request made by the petitioner, an additional order has been passed. Since, the payment of tax and penalty is a statutory duty, no case is made out for interference in the writ jurisdiction of this Court.

Summary

Issues: Challenge to communication directing payment of tax and penalty, violation of natural justice, interference in writ jurisdiction.

Communication Directing Payment of Tax and Penalty:
The writ petition challenged a communication directing the petitioner to pay Rs. 5,00,000 by a specified date, with the remaining demand stayed. The petitioner argued that a previous order had stayed the entire demand until a certain date, and the new conditional order lacked a change in circumstances and opportunity for hearing. The petitioner was found liable to pay tax and penalty for a specific assessment year. The court deemed the communication fair and reasonable given the substantial demand, aiming to secure revenue interests while providing relief to the petitioner for the appeal process.

Violation of Natural Justice:
The petitioner's counsel cited a previous Division Bench judgment emphasizing that declining a stay without granting a hearing violates the principle of natural justice. Despite the petitioner being granted indulgence in deferring payment previously, a subsequent order was issued upon a request. The court reiterated the statutory duty of the petitioner to pay the tax and penalty, finding no grounds for interference in the writ jurisdiction based on the circumstances presented.

Interference in Writ Jurisdiction:
Ultimately, the court dismissed the petition, highlighting the petitioner's duty to fulfill the tax and penalty obligations. The decision emphasized that the payment of tax and penalty constituted a statutory duty, with no sufficient cause for the court to intervene in the writ jurisdiction. The judgment maintained the importance of upholding statutory obligations and the limited scope of interference in such matters.