2002 (5) TMI 30 - HC - Income Tax

Court grants stay on disputed demand, directs tax authorities to address petitioner's application promptly

The court granted the petitioner's request for a stay on a disputed demand of Rs.1,10,43,910 and directed the respondents to refrain from recovering the ... Recovery Of Tax, Stay Of Recovery - The present writ petition has been filed by the petitioner seeking a writ, order or direction to direct the respondents to grant stay of the disputed demand of Rs.1,10,43,910 and not to treat the humble petitioner as the defaulter and not to recover the said amount or any part of it from the petitioner. The petitioner further seeks a writ order or direction to the effect that pending hearing of this petition this court pass appropriate order for prohibiting/restraining the respondents and their successor-in-office from taking any further steps or proceedings to recover the disputed demand of Rs.1,10,43,910. - I am of the view that the respondents be directed to dispose of the application dated February 7, 2002, as early as possible but not later than one month in view of the judgment referred to before me and strictly in accord ance with the provisions of law Issues:1. Petitioner seeking stay on disputed demand and not to be treated as defaulter.2. Petitioner requesting court to prohibit respondents from recovering disputed demand.3. Failure of authorities to pass any order on petitioner's application for stay.4. Respondents claiming petitioner failed to comply with order to pay outstanding demand.5. Petitioner invoking extraordinary jurisdiction under articles 226 and 227 of the Constitution.6. Disagreement on compliance with Additional Commissioner's order to pay 25% of outstanding demand.7. Petitioner's financial inability to make the payment.8. Settlement Commission's inability to proceed without report from respondents.Analysis:1. The petitioner filed a writ petition seeking a stay on a disputed demand of Rs.1,10,43,910 and requested not to be treated as a defaulter. The petitioner also asked the court to prevent the respondents from recovering the amount during the hearing. The petitioner claimed that despite representations, no order was passed on the application for stay by the tax authorities.2. The respondents argued that the petitioner had not complied with the order to pay 25% of the outstanding demand as directed by the Additional Commissioner of Income-tax. They contended that since the petitioner had availed an alternative remedy and relief was granted, the present petition was not maintainable. The respondents sought to vacate the interim order granted by the court.3. The petitioner maintained that the applications were pending before the tax authorities, and despite repeated requests, no orders were passed. The petitioner argued that there was no bar to invoking the court's extraordinary jurisdiction under articles 226 and 227 of the Constitution.4. The dispute arose from the petitioner's inability to pay 25% of the outstanding demand due to financial constraints. The Additional Commissioner's order required compliance, and the respondents were free to recover the amount after giving the petitioner an opportunity to be heard.5. The court considered the arguments presented by both parties and referred to a previous judgment regarding the entitlement to stay collection during the pendency of an appeal. The court directed the respondents to dispose of the petitioner's application promptly and submit a report to the Settlement Commission for further proceedings.6. The court emphasized that the respondents must act in accordance with the law and dispose of the application within a month. The interim order was to continue until the application's disposal, and the respondents were instructed to submit the report to the Settlement Commission promptly.7. In conclusion, the court disposed of the writ petition based on the observations and directions provided in the judgment, ensuring a fair and timely resolution of the dispute.