2020 (8) TMI 473 - HC - Income Tax

Stay petition - Recovery proceedings - HELD THAT - Keeping in mind the fact that only 20% of the tax demanded was asked to be paid by 1st respondent as a condition for not enforcing the entire demanded amount as mentioned in the assessment order, we do not wish to interfere with the quantum of tax to be deposited i.e., 20% disputed tax as fixed by 1st respondent in the assessment order. We are inclined to grant to petitioner four (04) more weeks time to comply with the payment of 20% of the tax demanded as per the order of the 1st respondent. Writ Petition is disposed of directing petitioner shall pay to respondents on or before 31.03.2020 a sum of ₹ 60 lakhs; and the balance shall be paid in three (03) equal monthly installments on or before 30.06.2020 and in default of payment of any of these amounts, this order shall stand vacated.

Summary

Issues:
Challenge to order granting stay of recovery of tax demand for Assessment Year 2017-18 due to financial difficulties faced by petitioner.

Analysis:
The petitioner challenged the order granting stay of recovery of a substantial tax amount for the Assessment Year 2017-18, citing financial difficulties. The Assessment Order was passed on the last day for completion by the 2nd respondent, with alleged errors. The petitioner argued for setting aside the impugned order on these grounds.

The learned Special Counsel for Commercial Taxes, representing the respondents, defended the impugned order, highlighting that only 20% of the tax demanded was directed to be paid, with a generous time frame for compliance. It was emphasized that the 1st respondent's decision was reasonable given the circumstances and did not necessitate interference.

After considering both sides' contentions and the financial challenges faced by the petitioner, the Court decided not to alter the 20% tax deposit condition imposed by the 1st respondent. However, recognizing the petitioner's difficulties, the Court granted an additional four weeks for compliance with the payment of the 20% tax demanded.

Consequently, the Court disposed of the Writ Petition with specific directions. The petitioner was instructed to pay a specified sum by a certain date, with the remaining balance to be settled in equal monthly installments. Failure to adhere to these payment terms would result in the order being vacated. If the petitioner complied, there would be a stay on the recovery of the deposited tax until the Appeal by the CIT (Appeals) against the Assessment Order was resolved.

In conclusion, the Writ Petition was disposed of with the outlined directions, and no costs were awarded. Any pending miscellaneous petitions related to the Writ Petition were also ordered to be closed as a result of this judgment.