2024 (7) TMI 1287 - HC - Income Tax

Validity of recovery steps for recovery of the amounts confirmed against it by the order - appellant has preferred stay petition before the 2nd and 3rd respondent seeking out of turn hearing of the appeal. In the meantime, coercive steps were taken for realisation of the demands - Single Judge disposed of the writ petition with a direction to the 2nd respondent to consider and pass appropriate order on stay application, however, did not grant stay of recovery proceedings pending disposal of the stay petition by the said respondent. HELD THAT - Since the learned Single Judge had relegated the appellant to the alternative remedy before the statutory authority, it was incumbent upon the learned Judge to protect the appellant from recovery proceedings pending disposal of the petitions by the respondent appellate authority. Accordingly, we modify the impugned judgment of the learned Single Judge to the limited extent of clarifying that pending disposal of the stay petition or appeal, whichever is earlier by the appellate authority, the recovery proceedings against the appellant for recovery of the amounts confirmed against it by Ext.P13 order shall be kept in abeyance. Ext.P19 application for early hearing of the appeal shall also be considered by the 3rd respondent in accordance with law. Save for this limited modification, the rest of the directions in the impugned judgment are not interfered with.

Summary

Issues involved:
1. Appellant aggrieved by judgment in Writ Petition
2. Impugned Ext.P13 order and recovery steps
3. Appeal and stay petition filed
4. Coercive steps taken for recovery
5. Single Judge's direction and lack of stay on recovery proceedings
6. Arguments by counsels
7. Modification of judgment to protect appellant from recovery proceedings
8. Clarification on keeping recovery proceedings in abeyance
9. Consideration of application for early hearing of appeal
10. Disposal of writ appeal

Analysis:
1. The appellant, aggrieved by a judgment in a Writ Petition, had impugned an Ext.P13 order and recovery steps taken against them. The appellant filed an appeal along with a stay petition before the Appellate Authority. Despite this, coercive steps for recovery were initiated, leading to the filing of WP(C) No. 37397/2023 before the Court.

2. The Single Judge, while directing the Appellate Authority to consider the stay application, did not grant a stay on the recovery proceedings. The counsels for both parties were heard, with the appellant's counsel arguing for protection from recovery proceedings pending the appeal's disposal.

3. The High Court, in its judgment, noted that the Single Judge should have protected the appellant from recovery proceedings while the appeal or stay petition was pending before the Appellate Authority. Consequently, the High Court modified the judgment to clarify that recovery proceedings against the appellant shall be kept in abeyance until the disposal of the stay petition or appeal, whichever is earlier.

4. Additionally, the High Court directed the 3rd respondent to consider the appellant's application for early hearing of the appeal in accordance with the law. Apart from these modifications, the High Court upheld the rest of the directions in the impugned judgment.

5. The writ appeal was disposed of with the above modifications, ensuring that the appellant is safeguarded from recovery proceedings until the resolution of the appeal or stay petition before the Appellate Authority.