Calcutta High Court (Appellete Side)
M/S. Paresh Nath Cold Storage & Anr vs Union Of India & Ors on 11 July, 2013
Author: Harish Tandon
Bench: Harish Tandon
1
01 11.07.13 W.P. 19925 (W) of 2013
akd
M/s. Paresh Nath Cold Storage & Anr.
Vs.
Union of India & Ors.
--------
Mr. Sayantan Bose.
... for the petitioners.
Mrs. Smita Das De.
... for the respondents.
Heard the learned advocates for the parties.
The petitioner has assailed the order dated 10th May, 2013 passed by the Income Tax Officer, Ward - 2(2), Hooghly, by which a direction was made upon the petitioner to pay at least 50% of the total demand within 7 days from the receipt of the said order as condition precedent to consider an application for stay under Section 220(6) of the Income Tax Act, 1961 and an order dated 13th June, 2013 passed by the Assistant Commissioner of Income Tax, Headquarters 20, Kolkata, by which the application for stay of the demand was disposed of upon payment of 50% thereof.
The primary ground for challenge of those orders is that the authorities have not afforded opportunity of hearing to the petitioner before passing such orders. Another ground, which is linked to the first point, is that the order is bereft of any reasons.
Learned advocate appearing for the petitioner relies upon an unreported judgement of a co-ordinate Bench of this Court in case of Binay Krishna Das vs. Union of India & ors. (W.P. 6571 (W) of 2012) decided 2 on 16th April, 2012 where the co-ordinate Bench quashed and set aside the order passed in an application under Section 220(6) of the said Act, as it does not contain any reasons.
Learned advocate appearing for the respondent authorities, however, submits that the power under Section 220(6) of the said Act exercisable by the Assessing Authority is discretionary and the Writ Court should not interfere with the discretionary order. It is further submitted that although an appeal is pending against the order of assessment, but no blanket stay order could be passed, as the revenue is required to be protected.
Section 220(6) of the said Act bestow the power on the Assessing Authority treating the assessee as not being in default in respect of an amount in dispute in appeal subject to the imposition of such conditions as it deems fit in the facts of the case. Such power is certainly discretionary, which should not be exercised whimsically or capriciously.
I cannot conceive of the situation - the moment such an application is taken out, the authority is bound to dispose of the same merely on the premise that an appeal is pending. But such power is conferred on the Assessing Authority to impose certain conditions, which obviously can be exercised by directing the assessee to put in certain money till the appeal is finally disposed of.
So far as the order dated 10th May, 2013 is concerned, this Court finds that the Assessing Authority have imposed a condition of deposit of 50% 3 of the total demand as condition precedent for considering the said application for stay under Section 220(6) of the said Act.
The aforesaid course, in my considered opinion, is not contemplated under the said provision. The authority cannot keep the application in abeyance and direct that the same would be heard only upon compliance of the conditions imposed therein.
This Court, therefore, does not find that the said order is at all sustainable. The same is hereby quashed and set aside.
The respective counsels have agreed on the proposition that in terms of Instruction no. 1914 dated 2nd December, 1993 the higher authority is also bestowed with the power to interfere with the decision of the Assessing Authority or the Tax Recovery Authority, in the event the same appears to be unreasonably high-pitched and/or occasioned with genuine hardship to the assessee.
The subsequent order under challenge is an outcome of the said exercise of the power and in fact an application under Section 220(6) of the said Act was disposed of by the Assistant Commissioner of Income Tax, Headquarters 20, Kolkata by imposing a condition of deposition of 50% of the total demand.
It is no doubt true that the Administrative Authorities or the Quasi-judicial Authority or the Tribunal are bound to record the reasons, more particularly when the order is amenable to further 4 challenge before the higher authority, as it would enable the higher forum to ascertain the process by which such decision has been arrived. It is also not in dispute that the right of 'hearing' is one of the Fundamental Rights of a person and any infraction and/or violation thereof would entail the unsustainability of the decision.
The aforesaid principles is fortified in the said unreported judgement rendered by a Co-ordinate Bench of this Court in case of Binay Krishna Das (supra) in the following words :-
"The impugned order is a totally non-speaking order. There is not a whisper of the reasons for rejection of the stay petition. It is also not understood why the petitioner has been requested to pay 50% of the total arrear demand. It is not clear why the petitioner has been exempted from the balance 50% or for that matter why he has been required to pay only 50%. No opportunity of hearing has also been given to the petitioner. The impugned order is gross violation of principle of natural justice and patently sustainable in the eye of law."
This Court, therefore, also quash and set aside the order dated 13th June, 2013, as the said order does not reflect any reasons and has been passed in gross violation of principles of natural justice.
Since the petitioner has already approached the higher authority in terms of the aforesaid instruction, it would be an idle formality to allow the petitioner to approach the Assessing Authority again.
This Court feels that justice would be sub- served if the higher authority i.e. the Assistant 5 Commissioner of Income Tax, Headquarters 20, Kolkata, is directed to dispose of the said application afresh upon giving an opportunity of hearing to the petitioner and/or its authorized representative(s) in accordance with law. The said authority shall see that the said application is disposed of within three weeks from the date of communication of this order.
It goes without saying that the orders impugned in this writ petition have been quashed and set aside on the ground as indicated above and this Court has not gone into merit and demerit of the respective contentions of the parties and the authorities shall be free to proceed with the matter without being influenced by this order.
With the above observations, the writ petition is disposed of.
It is further recorded that since the writ petition is disposed of at the motion stage without calling for affidavits, the allegations contained therein shall not be deemed to be admitted by the respondents.
There will be no order as to costs.
(HARISH TANDON, J.) 6