Decisions Reported In N.rajan Nair v. Incometax Officer And

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.T.SANKARAN &THE HONOURABLE MR. JUSTICE P.D.RAJAN THURSDAY, THE 18TH DAY OF DECEMBER 2014/27TH AGRAHAYANA, 1936 WA.No.1963 of 2014 () IN WP(C).28701/2014 -------------------------------------------- AGAINST THE JUDGMENT IN WP(C) 28701/2014 OF HIGH COURT OF KERALADATED 31-10-2014 APPELLANT(S):PETITIONER IN WP(C) -------------------- ---------------------------- M/S.THE GATEWAY HOTEL, UNIT OF TAJ KERALA HOTELS & RESORTS LTD, MARINE DRIVE, ERNAKULAM REPRESENTED BY ITS FINANCIAL CONTROLLER & COMPANY SECRETARY, MR.JAYARAJ THANNIMANGALAM. BY ADVS.SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.JOSON MANAVALAN RESPONDENT(S): RESPONDENTS IN WP(C) ---------------------- ----------------------------------- 1. STATE OF KERALA REPRESENTED BY ITS SECRETARY TO GOVERNMENT TAXES DEPARTMENT, SECRETARIAT THIRUVANANTHAPURAM-695001. 2. THE INTELLIGENCE OFFICER (IB), (MATTANCHERRY) COMMERCIAL TAXES, MINI STATION AT ALUVA-683505. 3. THE SALES TAX APPELLATE TRIBUNAL PERUMANOOR P.O., KOCHI-682015 REPRESENTED BY ITS SECRETARY. REPRESENTED BY ITS SECRETARY. 4. INSPECTING ASSISTANT COMMISSIONER DEPARTMENT OF COMMERCIAL TAXES, ERNAKULAM KOCHI-682015. KOCHI-682015. 5. THE STATE BANK OF INDIA BROADWAY BRANCH, 1ST FLOOR, SHANMUGHAM ROAD ERNAKULAM-682031, REPRESENTED BY ITS MANAGER. ERNAKULAM-682031, REPRESENTED BY ITS MANAGER. R BY SRI.P.V.SURENDRANATH,SC,SBI THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 18-12-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.T.SANKARAN & P.D.RAJAN, JJ. -------------------------------------- W.A.No.1963 of 2014 -------------------------------------- Dated this the 18[th] day of December, 2014 JUDGMENT K.T.Sankaran, J. The petitioner is engaged in hospitality business and is anassessee under the Kerala Tax on Luxuries Act. A penalty of₹7,03,446/- was imposed on the appellant under Section 17-Aof the Act as per Exhibit P1 order dated 29.7.2013.Challenging Exhibit P1 order, the appellant filed an appealbefore the Deputy Commissioner (Appeals)-I, CommercialTaxes, Ernakulam. An order of stay was passed in the appealon 21.11.2013 directing the appellant to pay 30% of thedemand and to furnish adequate security for the balanceamount. Complying with that order, the petitioner deposited30% of the amount and furnished bank guarantee of ₹4,97,336/-. W.A.No.1963/14 The bank guarantee is valid till 2.1.2015. The First AppellateAuthority sustained Exhibit P1 order and dismissed the appealas per the order dated 12.8.2014. The appellant filed SecondAppeal before the Sales Tax Appellate Tribunal. A stay petitionwas also filed. It is stated that the appeal and stay petition werefiled within 60 days provided for filing the appeal. However, aprohibitory order was issued by the assessing officer in respectof the bank guarantee furnished by the appellant and the bankguarantee was encashed on 28.10.2014. The grievance of theappellant is that before the expiry of the time limit for filingstatutory appeal, the assessing officer should not have encashedthe bank guarantee. The Writ Petition was filed challenging theencashment of the bank guarantee by the assessing officer. 2.The learned Single Judge disposed of the WritPetition directing the Appellate Tribunal to dispose of the 2.The learned Single Judge disposed of the WritPetition directing the Appellate Tribunal to dispose of the appeal, as expeditiously as possible and at any rate, within threemonths from the date of receipt of a copy of the judgment.Since the bank guarantee encashed is less than the demandmade, the learned Single Judge kept in abeyance all coercivesteps for realisation of the balance amount till the appeal isdisposed of. The learned Single Judge noticed that the appealto the Tribunal was filed within time and a stay petition wasalso filed by the appellant. But before any order could bepassed by the Appellate Tribunal, coercive steps were taken bythe assessing officer for encashing the bank guarantee.However, it was also held by the learned Single Judge that theconditional stay was only till the disposal of the appeal beforethe First Appellate Authority. 3.The learned counsel for the appellant relied on the decisions reported in N.Rajan Nair v. Incometax Officer and W.A.No.1963/14 another(1987) 165 ITR 650, Director of Income Tax(Exemption) v. Income Tax Appellate Tribunal and another (2014) 361 ITR 469 (Bom) and the judgment of a learnedSingle Judge of this Court in Suntec Business Solutions (P)Ltd. v. Union of India(W.P.(C) No.8947 of 2014). 4.In Rajan Nair's case, the recovery was made pendingdecision in the stay petition in the First Appeal. It was held thatthe assessing officer has to apply his discretion to the facts ofeach case. In Suntec Business Solutions (P) Ltd.'s case, theassessing officer initiated recovery steps ignoring an interimorder passed by this Court. On facts, these decisions are clearlydistinguishable. The decision of the Bombay High Court inDirector of Income Tax (Exemption) v. Income Tax AppellateTribunal and another : (2014) 361 ITR 469 (Bom) is based on W.A.No.1963/14 the guidelines issued by the Bombay High Court in anothercase, which are not applicable to the case on hand. We do not find any ground to interfere with the judgmentof the learned Single Judge. The Writ Petition is accordinglydismissed. K.T.SANKARAN JUDGE P.D.RAJAN JUDGE csl