2014 (10) TMI 570 - HC - Income Tax

Stay application - Demand raised by Excise department Held that - As decided in assessee s own case in Belgium Glass And Ceramics (P) Ltd. Versus Union of India 2013 (8) TMI 123 - GUJARAT HIGH COURT and with respect to the demand raised by the Excise Department with respect to the very transaction by which the Division Bench has stayed the demand raised by the Excise Department during pendency of the appeal before the CESTAT on condition that the assessee shall deposit 10% of the total demand raised by the Excise Department thus, the assessee is directed to deposit ₹ 1 Crore till the disposal Partial stay granted.

Summary

Issues:
Demand of Income Tax with interest for Assessment Years 2005-06 to 2010-11, Stay of demand, Challenge to orders passed by authorities, Compliance with interim orders, Deposit of 10% of confirmed demand, Treatment of assessee in default, Disposal of Special Civil Applications under Article 226.

Analysis:
The judgment addresses a group of petitions concerning the same assessee but different Assessment Years, where the Assessing Officer raised a demand of Income Tax with interest of approximately Rs. 9.76 Crores. The petitioner sought stay of the demand, but subsequent authorities rejected the applications, directing the petitioner to pay the demand. The petitioner approached the High Court through Special Civil Applications challenging the orders passed by the authorities.

The Division Bench of the High Court directed the petitioner to deposit Rs. 1 Crore out of the total tax demanded, granting ad-interim relief. The petitioner complied with this order. The main challenge raised was the reliance on a show cause notice by the Excise Department for raising the tax demand, without independent material by the Income Tax authorities. The Excise Commissioner confirmed the duty, interest, and penalty demand, with the petitioner appealing before the Tribunal.

The petitioner argued for treatment similar to the stay granted by the Division Bench for the Excise Department demand, depositing 10% of the demand raised to avoid default during the appeal. The High Court disposed of the applications, directing the petitioner to deposit Rs. 1 Crore, approximately 10% of the total demand, to not be treated as in default during the pendency of appeals before the Commissioner of Income Tax (Appeals).

The judgment emphasizes compliance with the High Court's order, where the petitioner had already deposited the required amount. The Court directed the concerned authorities to expedite the disposal of appeals within six months. The Registry was instructed to send the order to the respective authorities for compliance and disposal of appeals in accordance with the law.

In conclusion, all the petitions were disposed of, ensuring the petitioner's non-default status on depositing the specified amount and urging timely disposal of pending appeals by the appellate authorities.