2019 (3) TMI 503 - HC - Income Tax

Stay petition - appellate authority discretion to stay the proceedings conditionally - petitioner contended that the Ext.P24 cannot be termed an order is a mere statement or directive from the authority that the petitioner should deposit 20% of the demand to have the recovery proceedings stayed - As contended by petitioner, the appellate authority may have exercised its discretion but the manner of that exercise has not been spelt out in the Ext.P24 - HELD THAT - No doubt, an interim order, especially in the nature of a stay order, does not require detailed reasoning for adjudication. At the same time, the order must spell out the authority s prima facie opinion of the matter. And that is lacking here The circular, the Standing Counsel has relied on, as produced now before the Court, does not seem to bind the appellate authority, though it binds at the lower echelons. Under these circumstances, set aside the Ext.P24 and remand the matter to the appellate authority for fresh consideration of the stay petition. At any rate, it is left open for the appellate authority either to pass orders after hearing the petitioner or dispose of the appeal itself as per its convenience.

Summary

Issues: Challenge to assessment orders for multiple years, validity of conditional order Ext.P24 in stay petition, discretion of appellate authority in passing conditional orders

In this judgment, the petitioner challenged assessment orders for the years 2008-2009 to 2014-2015 and contested the validity of the conditional order Ext.P24 issued by the appellate authority in a stay petition. The petitioner argued that Ext.P24 was not an order but a mere directive requiring a deposit of 20% of the demand to stay recovery proceedings and have the appeal heard. The petitioner's counsel emphasized that the appellate authority's discretion to stay proceedings conditionally must be exercised judicially with reasons provided, citing precedents that non-speaking judicial directives are unsustainable. On the other hand, the Standing Counsel for the respondent asserted that the appellate authority had the discretion to issue conditional orders, possibly guided by department circulars. The court examined Ext.P24, noting its cryptic nature and lack of detailed reasoning or the authority's prima facie opinion. While acknowledging that interim orders like stay orders do not always require elaborate reasoning, the court emphasized the need for the order to reflect the authority's initial assessment of the matter. The circular relied upon by the Standing Counsel was found not to bind the appellate authority, further underscoring the need for clarity in the order. Consequently, the court set aside Ext.P24 and remanded the matter to the appellate authority for a fresh review of the stay petition. The appellate authority was given the discretion to either issue orders after hearing the petitioner or dispose of the appeal itself as convenient. In the interim, coercive measures by the department were to be deferred until the appellate authority took further action.