Court Allows Tax Payment in Instalments Due to Financial Hardship; Default Leads to Immediate Full Payment of Tax and Interest.

The HC modified the conditional stay order, allowing the appellant to pay 20% of the total tax demand in seven monthly instalments due to financial difficulties and cessation of operations. The writ appeal was disposed of with the warning that default in any instalment would render the entire tax and interest amount immediately payable.

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Issues:
Challenge to conditional stay order directing payment of 20% of total tax demand for multiple assessment years under the Income Tax Act, 1961.

Analysis:
The appellant challenged a conditional stay order issued by the 1st respondent-Appellate Authority, directing payment of 20% of the total tax demand for various assessment years under the Income Tax Act, 1961. The learned Single Judge dismissed the writ petition, upholding the conditional order of stay. The appellant was granted time to pay the first instalment by a specified date and directed to ensure payment of the last instalment by a later date. The appellant, through the writ appeal, contended that the Single Judge should have interfered with the conditional order, especially considering the lack of reasons provided for the payment directive and the appellant's financial difficulties.

Upon hearing both parties, the High Court observed that the 1st respondent had only directed payment of 20% of the total tax demand for the assessment years and had provided instalments for payment. The Court noted the delay in filing the writ appeal and the appellant's financial challenges, acknowledging that the company had ceased operations. In the interest of justice, the Court modified the impugned judgment and directed the appellant to pay the 20% liability in seven monthly instalments starting from a specified date. The Court warned that failure to pay any instalment would result in the immediate payment of the entire tax and interest amount confirmed in the assessment orders.

In conclusion, the writ appeal challenging the conditional stay order was disposed of by modifying the judgment to allow the appellant to pay the 20% liability in instalments. The Court emphasized that default in any instalment would lead to the loss of benefits granted by the judgment and the Appellate Authority's stay order, making the entire tax and interest amount immediately payable.

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