Grasim Industries Ltd v. Deputy Commissioner Of Income Tax,Central Circle 1(4), Mumbai & Ors

IN THE HIGH COURT OF JUDICATURE AT BOMBAYO.O.C.J. WRIT PETITION NO. 3367 OF 2019 Grasim Industries Ltd..Petitioner Versus Deputy Commissioner of Income Tax,Central Circle 1(4), Mumbai & Ors...Respondents ................... Mr. Jehangir D. Mistri, Senior Counsel a/w Mr. Madhur Agarwal,Mr. Fenil Bhatt and Mr. Atul K. Jasani for the PetitionerMr. Jehangir D. Mistri, Senior Counsel a/w Mr. Madhur Agarwal,Mr. Fenil Bhatt and Mr. Atul K. Jasani for the Petitioner Mr. Anil C. Singh, Additional Solicitor General a/w Mr. Nikhil Waje& Mr. Akhileshwar Sharma for the RespondentsMr. Anil C. Singh, Additional Solicitor General a/w Mr. Nikhil Waje& Mr. Akhileshwar Sharma for the Respondents ................... CORAM : UJJAL BHUYAN & MILIND N. JADHAV, JJ. DATE : JANUARY 20, 2021. P.C.: Heard Mr. Mistri, learned senior counsel for thepetitioner and Mr. Singh, learned Additional Solicitor Generalof India for the respondents. 2. Challenge made in this writ petition is to the orderdated 18.10.2019 passed by respondent No. 1 and the orderdated 21.11.2019 passed by respondent No. 2 rejecting theapplication of the petitioner for complete stay of demandarising out of the order passed by the assessing ofÏcer undersection 115Q read with section 115O of the Income Tax Act,1961 for the assessment year 2017-18 till disposal of appeal before the Commissioner of Income Tax (Appeals) - 47 i.e respondent No. 3. 3.This Court on 12.12.2019 passed the following order:- " Heard learned counsel for the parties. 2.Place the petition on board on 3 January 2020 for finaldisposal. It is open for the Respondents to file their reply affidavitbefore the next date. 3.We have considered the earlier orders passed on 14August 2019 and 1 October 2019 in Writ Petition No.1405/2019wherein ad-interim protection was granted to the Petitioner. Byorder dated 1 October 2019, it was directed that if the order onthe application for stay filed by the Petitioner is adverse to thePetitioner, then no coercive proceedings would be adopted bythe Revenue for a period of two weeks. It is upon the rejection ofthe application for stay, the present petition is filed. 4.Considering the aforesaid order dated 1 October 2019and that as we are placing the matter for final disposal on a shortdate i.e. on 3 January 2020 immediately upon reopening of theCourt after Christmas Vacation, we are inclined to continue theprotection granted by the order dated 1 October 2019. 5.At this stage, learned counsel for the Respondentsrequests that instead of 3 January the matter may be adjournedto 10 January 2020. Accordingly, the petition to stand over to 10January 2020. The protection granted by the Court by orderdated 1 October 2019 in Writ Petition No.1405/2019 to continuetill the next date." 4.Thus, from the above, we find that this Court hadcontinued the interim protection granted by order dated01.10.2019 in writ petition No. 1405/2019 filed by thepetitioner. Therefore, order dated 01.10.2019 passed in writpetition No. 1405/2019 may be adverted to. Relevantportion of the order dated 01.10.2019 is extracted hereunder:- 5.At this stage, learned counsel for the Respondentsrequests that instead of 3 January the matter may be adjournedto 10 January 2020. Accordingly, the petition to stand over to 10January 2020. The protection granted by the Court by orderdated 1 October 2019 in Writ Petition No.1405/2019 to continuetill the next date." 4.Thus, from the above, we find that this Court hadcontinued the interim protection granted by order dated01.10.2019 in writ petition No. 1405/2019 filed by thepetitioner. Therefore, order dated 01.10.2019 passed in writpetition No. 1405/2019 may be adverted to. Relevantportion of the order dated 01.10.2019 is extracted hereunder:- "5. We note that once it is held that an appeal under theAct is maintainable from the impugned order dated 14thMarch, 2010 passed by the Assessing Officer, then allincidence of an appeal would equally apply in the case ofthe Petitioner. It is also not disputed that once thePetitioner has filed an appeal before the CIT(A), it is opento the Petitioner to make appropriate application before theAuthorities under Section 220 (6) of the Act, for stay of thedemand till the final disposal of the appeal before theCIT(A). It would, therefore, be open to the Petitioner to takesuch measures as are available under the Act to obtain anappropriate order, seeking a stay of the recovery of thedemand confirmed by an order dated 14th March, 2019.Looking at the huge demand and the attitude of theRevenue in curtailing the normal period of 30 daysavailable to party to make a payment, it would beappropriate that till the disposal of the Petitioner’sapplication under Section 220(6) of the Act and if the orderon such application is adverse to the Petitioner, then for aperiod of two weeks thereafter, no coercive proceedingswill be adopted by the Revenue. This, of course, subject tothe Petitioner filing the necessary application within aperiod of two weeks from today." 5.Mr. Singh, learned Additional Solicitor General submitsthat the writ petition itself has become infructuous becauserespondent No. 3 has, in the meanwhile, disposed of theappeal filed by the petitioner whereafter petitioner haspreferred further appeal before the Income Tax AppellateTribunal, "G" Bench, Mumbai ("Tribunal" for short) beingIncome Tax Appeal No. 1935/Mum/2020. Since the subjectmatter of the writ petition pertains to stay of recovery ofdemand during pendency of appeal before respondent No. 3and the said appeal have been disposed of by respondent No. 3, no live issue survives for adjudication in this case. Healso submits that a stay application was filed by thepetitioner before the Tribunal which was disposed of videorder dated 18.12.2020 on the ground that the appeal wasdirected to be listed for hearing on 18.01.2021. Contentionof Mr. Singh is that if the petitioner is aggrieved by suchdecision of Tribunal and seeks a fresh stay of demand, a newcause of action has arisen for which petitioner would have tofile a fresh writ petition. 6.Mr. Mistri, learned senior counsel for the petitioner hasreferred to the order dated 18.12.2020 passed by theTribunal and submits that though the Tribunal had fixedhearing of the appeal on 18.01.2021, no hearing took placeon that day because of adjournment sought for by therevenue. Referring to paragraph 7 of the said order, hesubmits that Tribunal had noted the contradictory standtaken by the assessing ofÏcer. On the one hand, theassessing ofÏcer is bent on effecting recovery of the duesbut on the other hand, he is saying that no coercive actionwould be taken in view of pendency of the writ petition andthe stay granted therein. Therefore, the moment the writpetition is disposed of as infructuous, the assessing ofÏcerwould immediately initiate recovery proceedings. 7.Mr. Singh has referred to paragraph 9 of the said orderand submits that Tribunal had made it very clear that if theassessing ofÏcer resorts to any coercive measures, then theassessing ofÏcer should give at least one week's notice tothe assessee. 8.After hearing learned counsel for the parties and ondue consideration, we are of the view that since the Tribunalitself has decided to hear the appeal out of turn, the hearingshould be expedited. Further, we feel that if the assessingofÏcer initiates any recovery measure, he should give atleast two weeks' prior notice to the petitioner to avail itslegal remedy. 9.Considering the above, we issue the followingdirections: (i) Let the Tribunal decide the appeal of thepetitioner being Income Tax Appeal No.1935/Mum/2020 within three months from today;petitioner being Income Tax Appeal No.1935/Mum/2020 within three months from today; (ii) If the assessing ofÏcer resorts to any coercivemeasure for recovery of dues in the meanwhile,he shall give at least two weeks' prior notice tothe petitioner to avail its legal remedy;measure for recovery of dues in the meanwhile,he shall give at least two weeks' prior notice tothe petitioner to avail its legal remedy; (iii) All contentions are kept open. 10. With the above directions, writ petition is disposed of. [ MILIND N. JADHAV, J. ] [ UJJAL BHUYAN, J. ] Digitally signedRavindraby Ravindra M.M.AmberkarDate:Amberkar2021.01.2214:56:44 +0530