2017 (11) TMI 804 - HC - Income Tax

High Court orders acceptance of TDS Certificate in company's name, preventing coercive action

Kesar Terminals & Infrastructure Limited Versus Kandla Port Trust (Now Deendayal Port Trust) & 2

The High Court directed the respondent authorities to accept the TDS Certificate in the applicant company's name, M/s. Kesar Enterprise Ltd., ... Acceptance of TDS certificate in the name of company - as submitted by learned Senior Counsel, Mr. Mihir Thakore that under demerger, the applicant company is the resulting company in the place of the transferor company i.e. M/s Kesar Enterprise Limited and, a such, TDS Certificate cannot be issued in the name of transferor company i.e. M/s Kesar Enterprise Limited - Held that:- We dispose of this application, directing the respondents not to take any coercive action, as per communication dated 10.11.2017 addressed by the respondent No.3 and further, by directing the respondents to accept the TDS Certificate in the name of the applicant company. It is made clear that such acceptance is without prejudice to the rights of the parties in the pending appeal before this Court. Issues:1. Quashing of impugned action by respondent authorities2. Direction to accept TDS Certificate in the name of applicant company3. Prevention of coercive action by respondent authoritiesAnalysis:1. The Civil Application sought to quash the respondent authorities' action demanding a TDS Certificate in the name of M/s. Kesar Enterprise Ltd., threatening coercive action if not complied with. The applicant argued the demand was illegal, arbitrary, and contrary to a previous court order. The High Court had earlier granted interim relief to the applicant, directing no coercive steps upon depositing a specific amount. The applicant complied with the conditions by depositing the first instalment without TDS deduction and submitted a Pay Order for the balance amount with TDS deduction, intending to deposit the TDS in the Government Treasury for the respondents' credit.2. The applicant contended that, as a resulting company post a demerger, TDS Certificate issuance in the name of the transferor company, M/s Kesar Enterprise Ltd., was not feasible. The respondent's counsel expressed readiness to accept the TDS Certificate in the applicant company's name, acknowledging the pending appeal's rights of the parties. Consequently, the High Court directed the respondents not to take coercive action based on the communication demanding a specific TDS Certificate and instructed them to accept the TDS Certificate in the applicant company's name, emphasizing that this acceptance did not prejudice the parties' rights in the ongoing appeal.3. The High Court disposed of the Civil Application in light of the respondent's willingness to accept the TDS Certificate in the applicant company's name, without affecting the parties' rights in the appeal. It was clarified that the directive to accept the TDS Certificate was issued without prejudice to the pending legal proceedings. The Court permitted direct service of the judgment on the same day, concluding the matter effectively.