2019 (4) TMI 1126 - HC - Income Tax

Stay of demand - condition of directing the petitioner to deposit 20% of the tax demanded for the year 2015-2016 - HELD THAT - No illegality in the exercise of discretion warranting judicial review in the present writ petition. The circumstances which are stated in the writ affidavit as well as before the 2nd respondent however persuade this Court to substitute 20% condition imposed by the 2nd respondent with 10% payable within 45 days from today. The petitioner enjoys the benefit of stay order subject to complying with this condition within the time stipulated by this Court. In default of complying with the condition without reference to the Court, it shall be presumed that the stay order is not in operation. Further the 2nd respondent considers and disposes of the appeal within four months from today.

Summary

Issues:
Challenge to Ext.P7 order imposing 20% tax deposit condition for stay petition.

Analysis:
The judgment involves a challenge to Ext.P7 order passed by the 2nd respondent, which imposed a condition on the petitioner to pay or deposit 20% of the total tax demanded for the assessment year in question. The petitioner contended that the condition was onerous and that Ext.P7 failed to consider the grounds urged by the appellant. The petitioner sought setting aside Ext.P7 and granting stay without imposing any condition. On the other hand, the respondents argued that the 2nd respondent's decision was justified, emphasizing that the condition was reasonable and necessary. They proposed either dismissing the writ petition or directing the appeal to be disposed of promptly with a different reasonable condition in place of the 20% deposit requirement.

The Court examined the arguments presented by both parties and found that while there was no apparent illegality in the 2nd respondent's exercise of discretion, the circumstances warranted a modification of the condition. The Court, therefore, substituted the 20% deposit condition with a 10% deposit requirement to be paid within 45 days from the judgment date. The petitioner was granted the benefit of the stay order subject to meeting this revised condition within the specified timeframe. Failure to comply with the condition would result in the presumption that the stay order was no longer in effect. Additionally, the Court directed the 2nd respondent to consider and dispose of the appeal within four months from the judgment date. Consequently, the writ petition was disposed of in accordance with these directions.