2017 (11) TMI 1609 - HC - Income Tax

Extension of stay - proof of financial hardship or irreparable injury so as to grant any further extension of stay - Held that - The demand is about ₹ 129,00,00,000/- (Rupees one hundred and twenty nine crore only). It is an admitted fact that a sum of ₹ 70,00,00,000/- (Rupees seventy crore only) is deposited by the petitioner which amounts to about 55% of the outstanding demand. In order to further protect the interest of the revenue and keeping in mind the fact that the appeal is slated for final arguments before the Appellate Tribunal and balancing the equities on both sides, the petitioner is directed to retain a balance of another 20% in Account No.0037238007 maintained with CITI Bank, M.G.Road Branch, Bengaluru-560 001. The said balance is rounded off to ₹ 26,00,00,000/- (Rupees twenty six crore only) shall be maintained pending disposal of the appeal by the Appellate Tribunal. It is directed that the respondent shall not take further steps pursuant to order dated 15/11/2017 (Annexure-H) and notice dated 20/11/2017 till the disposal of the appeal by the Appellate Tribunal.-

Issues:
1. Maintainability of the writ petitions.
2. Interim stay order by the Appellate Tribunal and subsequent actions.
3. Influence of previous orders on the current judgment.
4. Request for protective orders by the petitioner.
5. Legal arguments regarding protective orders and discretion of the Court.
6. Financial implications and bank account attachment.
7. Direction for expeditious disposal of the appeal.
8. Requirement of maintaining a balance in the bank account pending appeal disposal.

Issue 1: Maintainability of the writ petitions
The writ petitions were initially listed for hearing on maintainability. However, after determining that the writ petitions were maintainable, with the consent of both parties, they were heard finally and disposed of by the High Court.

Issue 2: Interim stay order by the Appellate Tribunal and subsequent actions
The petitioner, a private limited company, challenged an interlocutory order directing payment of a balance tax demand. The Appellate Tribunal had earlier granted an interim stay subject to a deposit, which was not extended further, leading to the current dispute.

Issue 3: Influence of previous orders on the current judgment
The petitioner argued that a Division Bench order emphasized that the appeal should be decided without influence from prior orders. This raised concerns about the Appellate Tribunal's decision being influenced by a previous order, potentially impacting the current judgment.

Issue 4: Request for protective orders by the petitioner
The petitioner sought protective orders to safeguard its rights pending appeal disposal, highlighting the risk of financial transactions being affected due to an attachment of the bank account by the respondent.

Issue 5: Legal arguments regarding protective orders and discretion of the Court
The revenue contended that protective orders cannot be granted in favor of the petitioner once the interim stay was discontinued by the Appellate Tribunal. The Court was urged not to entertain requests for protective orders against the revenue.

Issue 6: Financial implications and bank account attachment
The respondent's actions, including attaching the petitioner's bank account, were highlighted as causing financial difficulties for the petitioner. Failure to grant protective orders could result in the recovery of the amount, rendering the appeals futile.

Issue 7: Direction for expeditious disposal of the appeal
Considering the impending final hearing of the appeal, the Court directed the Appellate Tribunal to expedite the disposal of the appeal by a specified date, emphasizing cooperation from both parties in the process.

Issue 8: Requirement of maintaining a balance in the bank account pending appeal disposal
To balance the interests of both parties, the Court directed the petitioner to retain a specific balance in a designated bank account until the appeal's disposal. The respondent was prohibited from taking further steps until the appeal was resolved.

In conclusion, the High Court's judgment addressed various legal aspects, including the maintainability of the writ petitions, interim stay orders, influence of prior judgments, requests for protective orders, legal arguments regarding discretion, financial implications, directions for expeditious disposal of the appeal, and the requirement to maintain a balance in the bank account pending appeal resolution.

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