Stay of recovery

Since assessee is a statutory Board owned by the State Government and it is not difficult for the Revenue Department to recover the amount in event of appeal or stay petition being dismissed, recovery of amount is stayed and revenue is directed to dispose of stay petition — as held by APHC in Andhra Pradesh Housing Board v Dy CIT — In favour of: Others ; Writ Petition No. 3544 of 2011

Decided on: 16 March 2011

Andhra Pradesh Housing Board v Dy. CIT

High Court Of Andhra Pradesh

Writ Petition No. 3544 of 2011

A. Gopal Reddy and N. Ravi Shankar, JJ

Decided on: 16 March 2011

Order

(Per: the Hon’ble A.Gopal Reddy, J)

Aggrieved by the order of the 1st respondent-The Deputy Commissioner of Income Tax, in

determining the income of the petitioner for the assessment year 2008-09 and demanding the tax of

Rs.507,23,93,980/- the petitioner preferred appeal before the 3rd respondent-The Commissioner of

Income Tax (Appeals)-V. Against the rejection of the application filed by the petitioner before the 1st

respondent seeking stay of collection of disputed tax, the petitioner invoked the jurisdiction of the 2nd respondent for grant of stay on 10.02.2011. While the stay petition is pending before the 2nd

respondent, the 1st respondent issued a garnishee notice to the 5th and 6th respondents and on service of such garnishee notice, the 6th respondent remitted a sum of Rs. 22,92,19,581/- to the Revenue

Department. In view of the same, the petitioner filed the present writ petition to restrain the 1st

respondent from initiating any proceedings against the petitioner pursuant to the assessment order

dated 31.12.2010.

2. It is now fairly well settled that when a statutory appeal is pending before the statutory authority, a

writ questioning the said order, which is subject matter of appeal, cannot be entertained and

adjudicated by this Court {See BMRDA v. Gokak Patel Volkart (1995(1) SCC 642)}.

3. In view of the same, we are not inclined to entertain the writ petition questioning the assessment

order, which is subject matter of appeal. However, against the orders passed by the 1st respondent,

summarily rejecting the application for stay of assessment pending the appeal before the 3rd

respondent, the petitioner preferred an appeal under section 264 of the Act before the 2nd respondent,

which has to be decided by him. Further, by recovering the disputed tax pending the appeal, the

appellate remedy cannot be made nugatory. The petitioner is a statutory Board constituted under the

Housing Board Act owned by the State Government and it is not difficult for the Revenue Department

to recover the amount in the event of appeal or the stay petition being dismissed. It is represented that

in view of the garnishee orders, the petitioner board has not been allowed to operate the bank accounts

and in the process the Board is not in a position to pay salaries to its employees.

4. In view of the same, interest of justice will be served, if the recovery of amounts is stayed, pursuant

to the assessment order till the 2nd respondent decides the stay petition filed against the orders of the

1st respondent, dated 03.02.2011.

5. The Writ Petition is, accordingly, disposed of directing the 2nd respondent to dispose of the stay

application. The parties are at liberty to file additional pleadings, if any, before the 2nd respondent.

There shall be no order as to costs.