Limited, Seawoods Navi Mumbai, Navi v. Deputy Commissioner Of

Arun IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 879 OF 2024 of Law and Justice, 2nd Floor, Aayakar Bhavan, MK Road, New Marine Lines, Mumbai 400 020. APPEARANCES for the petitioner Mr Divesh Chawla, i/b Atul K Jasani. Mr Suresh Kumar, with Mohini Chougule & Jyoti Yadav, i/b Suresh Kumar. for the respondents CORAM : G.S.Patel & Kamal Khata, JJ. DATED : 5th March 2024 :-ORAL JUDGMENT (Per GS Patel J) 1.Rule.Rule returnable forthwith. There is an Affidavit inReply. 2.The prayers in the Petition are as follows: “(a)that this Hon’ble Court may be pleased to issue aWrit of Certiorari, or a Writ in the nature of Certiorari, orany other appropriate Writ, order or direction under Article226 of the Constitution of India, calling for the records ofthe present case and after examining the legality andvalidity thereof quash and set aside: (i)the action of Respondent No. 3 on 9th March2023 of adjusting the refund of Rs.3,53,99,815/- forAY 2017-18, against demand for AY 2018-19, wherein stay applications were pending and withoutissuing any intimation to the Petitioner underSection 245 of the Income Tax Act, 1961; (ii)the action of Respondent No. 3 on 10thMarch 2023, of adjusting the refund ofRs.2,30,52,355/- and Rs.80,74,925/- for AY 2022-23,against stayed tax demand for AY 2018-19, whereinstay applications were pending and without issuingany intimation to the Petitioner under Section 245 ofthe Act; and (iii)the inaction of the Respondent No. 1 indisposing off the stay application and rectificationapplication for AY 2018-19 and rectificationapplication for AY 2017-18 and AY 2022-2023 filedby the Petitioner. (b)that this Hon’ble Court may be pleased to issue aWrit of Mandamus or a Writ in the nature of Mandamus, orany other appropriate Writ, order or direction under Article226 of the Constitution of India, directing the Respondentsto issue consequential refunds of Rs.3,53,99,815/- andRs.2,30,52,355/- and Rs.80,74,925/- for AY 2017-18 and AY2022-23 respectively aggregating to Rs.6,65,27,095/- to thePetitioners along with interest under Section 244A of theAct up to the date of payment within a fixed time frame; (c) that this Hon’ble Court may be pleased to issue aWrit of Mandamus or a Writ in the nature of Mandamus, orany other appropriate Writ, order or direction under Article226 of the Constitution of India, directing the Respondentsto issue consequential refunds of on any further amountsdetermined by the rectification application.” 3.As the prayers indicate, the first challenge is to the purportedadjustment by Respondents Nos 1 to 3 of a refund of Rs 3,53,99,815/- for the AY 2017–2018 against a demand for thesubsequent AY 2018–2019. There were applications pending for thesubsequent AY 2018–2019. However, the case of the Petitioner isthat the Petitioner was given no intimation under Section 245 of theIncome-Tax Act, 1961 (“IT Act”). 4.The prayer clause (a)(ii) is in similar terms but is in regard totwo amounts of Rs 2,30,52,355/– and Rs 80,74,925/– and theadjustment on 10th March 2023 for the AY 2022–2023 against thedemand for AY 2018–2019. Although this demand was stayed andthe stay application was pending, here again there was no intimationunder Section 245 of the IT Act. 5.The third substantive prayer is directed to the failure of the1st Respondent, the Deputy Commissioner of the Income TaxDepartment to dispose of the stay application and the rectificationapplication for the AY 2018–2019 and the rectification applicationsfor the AYs 2017–2018 and 2022–2023. 6.Prayer clauses (b) and (c) are for corresponding writs ofmandamus. 4.The prayer clause (a)(ii) is in similar terms but is in regard totwo amounts of Rs 2,30,52,355/– and Rs 80,74,925/– and theadjustment on 10th March 2023 for the AY 2022–2023 against thedemand for AY 2018–2019. Although this demand was stayed andthe stay application was pending, here again there was no intimationunder Section 245 of the IT Act. 5.The third substantive prayer is directed to the failure of the1st Respondent, the Deputy Commissioner of the Income TaxDepartment to dispose of the stay application and the rectificationapplication for the AY 2018–2019 and the rectification applicationsfor the AYs 2017–2018 and 2022–2023. 6.Prayer clauses (b) and (c) are for corresponding writs ofmandamus. 7.The prayers make it clear that the entirety of the case iscentred around the interpretation of Section 245 of the IT Act.Specifically, the question is whether an intimation under thisSection is or is not mandatory. In another manner of speaking, thequestion is whether the Revenue can set off or withhold a refundwithout an intimation under Section 245 of the IT Act. 8.Section 245 of the IT Act reads as follows: “245. (1) Where under any of the provisions of this Act,a refund becomes due or is found to be due to any person,the Assessing Officer or Commissioner or PrincipalCommissioner or Chief Commissioner or Principal ChiefCommission, as the case may be, may, in lieu of payment ofthe refund, set off the amount to be refunded or any part ofthat amount, against the sum, if any, remaining payableunder this Act by the person to whom the refund is due,after giving an intimation in writing to such person of theaction proposed to be taken under this sub–section. (2)Where a part of the refund is set off under theprovisions of sub–section (1), or where no such amount isset off, and refund becomes due to a person, and theAssessing Officer, having regard to the fact that proceedingsfor assessment or reassessment are pending in the case ofsuch person, is of the opinion that the grant of refund islikely to adversely affect the revenue, he may, for reasons tobe recorded in writing and with the previous approval of thePrincipal Commissioner or the Commissioner, as the casemay be, withhold the refund up to the date on which suchassessment or reassessment is made.” 9.As Section 245(1) shows, it is permissible for the Revenue toset off a refund that is found due against a demand but only after anintimation is given in writing to the person of the action proposed,i.e., the proposed set off or adjustment. Sub–section (2) of Section45 was introduced by an amendment. It speaks of a set off of part ofa refund or an alternative scenario where there is no set off and arefund becomes due. In that situation, if the Assessing Officerhaving regard to the fact that the proceedings for assessment orreassessment are pending, forms an opinion that the grant of a refund is likely to adversely affect the Revenue, he may, afterrecording reasons in writing and with the previous approvals of thePrincipal Commissioner, as the case may be, withhold the refund upto the date on which that assessment or reassessment is made. 10.There are also relevant circulars of 2013 in regard tocompliance of Section 245 before making any adjustment of arefund. 11.The Affidavit in Reply on behalf of the Revenue is exceedinglypeculiar. From paragraph 5.5 there are several sub-paragraphs thatdeal with the various assessment proceedings and the pendency ofthe stay proceedings. However, sub-paragraph (1) at internal page 6clearly says that the adjustment by the CPC was effected withoutissuing a Notice under Section 245 of the IT Act. Sub-paragraphs(2) and (3) deal with a question of Tax Deducted at Source(“TDS”) credit but also mention an adjustment of the refund. It istherefore undisputed that no intimation under Section 245 of the ITAct was ever issued to the Petitioners. 10.There are also relevant circulars of 2013 in regard tocompliance of Section 245 before making any adjustment of arefund. 11.The Affidavit in Reply on behalf of the Revenue is exceedinglypeculiar. From paragraph 5.5 there are several sub-paragraphs thatdeal with the various assessment proceedings and the pendency ofthe stay proceedings. However, sub-paragraph (1) at internal page 6clearly says that the adjustment by the CPC was effected withoutissuing a Notice under Section 245 of the IT Act. Sub-paragraphs(2) and (3) deal with a question of Tax Deducted at Source(“TDS”) credit but also mention an adjustment of the refund. It istherefore undisputed that no intimation under Section 245 of the ITAct was ever issued to the Petitioners. 12.The aggregate figures are like this. The refund for the AY2017–2018 is Rs 3,53,99,815/–, for the AY 2022–2023 the refund isRs 3,11,27,280/–. The total refund due is Rs.6,65,27,095/–. 13.If the rectification applications are taken into account, thereare additional refunds that are due. For the AY 2017–2018, theadditional refund would be Rs.5,89,648/–; for the AY 2018–2019,the additional refund due would be Rs.82,97,926/– and for the AY 2022–2023, the additional refund due, if rectification is permittedand is given effect to, would be Rs 3,56,75,300/–; coming to theadditional total of Rs 4,45,62,874/–. 14.Paragraphs 3(a) and (b) of the Petition from pages 25 to 27read thus: “(a) On 9 March 2023, Respondent No 3 adjusted therefund of Rs.3,53,99,815/– for AY 2017–2018 against thedisputed demand for AY 2018–19 without issuing anyintimation to the Petitioner under Section 245 of theIncome Tax Act, 1961 (hereinafter referred to as “Act”) andwithout disposing off the stay application dated 23September 2021 and letter dated 9 November 2022 filed bythe Petitioner for AY 2018–19, which is wholly erroneous,arbitrary and contrary to law and judicial precedents.Further, without considering that the issues are covered infavour of the Petitioner by the order passed by the Hon’bleIncome Tax Appellate Tribunal (hereinafter referred to as“Tribunal”) for the AY 2016–17 and 2017–18, it showsnon–application of mind, which is wholly erroneous,arbitrary and contrary to law. Hereto annexed and markedas Exhibit “A” and “B” is a screenshot of the TIN NSDLwebsite and corresponding challan status as per OLTASreflecting the status of the income tax refund for AY 2017–18 as adjusted against the demand for AY 2018–19; (b)On 10 March 2023, Respondent No 3 adjusted therefunds of Rs.2,30,52,355/– and Rs.80,74,925/– for AY2022–23 against the demands for AY 2018–19 withoutissuing any intimation to the Petitioner under section 245 ofthe Act and without disposing off the stay application dated23 September 2021 and letter dated 9 November 2022 filedby the Petitioner for AY 2018–19 which is wholly erroneous,arbitrary and contrary to law and judicial precedents. Further, without considering that the issues are covered infavour of the Petitioner by the order passed by the Hon’bleTribunal for the AY 2016–17 and 2017–18, it shows non–application of mind, which is wholly erroneous, arbitraryand contrary to law. Hereto annexed and marked as Exhibit“C” and “D” is a screenshot of the TIN NSDL websiteand corresponding challan status as per OLTAS reflectingthe status of the income tax refund for AY 2022–23 asadjusted against the demand for AY 2018–19.” 15.There is then in paragraph 7, for the AY 2017–2018, there is aspecific averment that the 3rd Respondent adjusted the refundagainst an outstanding demand for the AY 2018–2019 but failed toconsider that the stay application filed by the Petitioner for that AYwas pending. Further, the adjustment was made without anyintimation under Section 245 of the IT Act. 15.There is then in paragraph 7, for the AY 2017–2018, there is aspecific averment that the 3rd Respondent adjusted the refundagainst an outstanding demand for the AY 2018–2019 but failed toconsider that the stay application filed by the Petitioner for that AYwas pending. Further, the adjustment was made without anyintimation under Section 245 of the IT Act. 16.For the AY 2018–2019 there was also a stay application. Thatwas not disposed of. We are today not concerned with the merits ofthe stay application. But paragraph 14 mentions that even for thisAY 2018–2019 the demand was adjusted against the refunddetermined for the AY 2017–2018 and the AY 2022–2023 despitethe stay application being pending and also without an intimationunder Section 245 of the IT Act. 17.For the AY 2022–2023, the Petitioner had filed a rectificationapplication inter alia in regard to short TDS credit. The Petitionerraised a grievance that refunds had been adjusted without intimationunder Section 245 of the IT Act and without an opportunity of being heard. As noted, the Petitioner had filed a stay application forthe entirety of the demand for the AY 2018–2019. 18.Paragraph 21 mentions that an online grievance has been filedbut there has been no intimation. Paragraphs 22 and 23 of thePetition read as follows: “22.Respondents No 3, on 9 March 2023, without issuingany intimation under Section 245 of the Act and contrary tothe record and law, and without complying with theprocedure under Section 245 of the Act, wrongfullyadjusted the refunds for AY 2017–18 amounting toRs.3,53,99,815/– (refund determined as per OGE ofRs.3,64,59,590/– less Taxes Deducted at Source ofRs.10,59,775/– on interest thereon) against the disputeddemand for AY 2018–19 of Rs.5,84,53,170/– (wherein theissues are entirely covered in favour of the Petitioner by heorder passed by the Hon’ble Tribunal in earlier AYs and thestay application were pending disposal. 23.Similarly, Respondent No 3, on 10 March 2023,without issuing any intimation under Section 245 of the Actand contrary to the record and law, and without complyingwith the procedure under Section 245 of the Act,wrongfully adjusted the refunds for AY 2022–23 amountingto Rs.3,11,27,280/– (refund determined in the intimationissued under section 143(1) of Rs.3,18,77,915/– less TaxesDeducted at Source of Rs.7,50,635/– on interest) entirelyagainst the demand including interest under section 220 ofhe Act for AY 2018–19 (wherein the issues are entirelycovered in favour of the Petitioner by the order passed bythe Hon’ble Tribunal in earlier AYs and the stay applicationwere pending disposal).” 19.Reliance is placed by the Petitioners on the followingauthorities: Jet Privilege (P) Ltd v Deputy Commissioner of IncomeTax– 5(2)(1), Mumbai,[1]decided by a Division Bench of this Courtand Hindustan Unilever Ltd v Deputy Commissioner of Income Tax–1(1),[2]also decided by a Division Bench of this Court. 20.In Hindustan Unilever Ltd, the Division Bench referencedSection 245 read with Section 220 of the IT Act. The relevantfindings of the Division Bench in paragraphs 14, 15, 24 and 26 arereproduced hereunder. . 19.Reliance is placed by the Petitioners on the followingauthorities: Jet Privilege (P) Ltd v Deputy Commissioner of IncomeTax– 5(2)(1), Mumbai,[1]decided by a Division Bench of this Courtand Hindustan Unilever Ltd v Deputy Commissioner of Income Tax–1(1),[2]also decided by a Division Bench of this Court. 20.In Hindustan Unilever Ltd, the Division Bench referencedSection 245 read with Section 220 of the IT Act. The relevantfindings of the Division Bench in paragraphs 14, 15, 24 and 26 arereproduced hereunder. . “14.Section 245 of the Act, empowers the revenue toadjust refunds due to an assessee against any taxpayable(of the same character as the refund due) byhim. The exercise of this power is discretionary as isevident from the use of the word “may” therein.Besides the requirement of giving notice/intimation ofthe proposed action of adjustment out of the refund dueis also an indication of discretionary nature of power notmandatory. This notice/intimation is required to begiven so as to enable a party to point out not only factualerrors but also point out why such a power should not beexercised in the facts of the case, such as the demandsought to be adjusted is still a subject matter of appealand the issue is covered by decisions of higher forumsetc. On consideration of the same, it is open to theofficer of the revenue concerned to exercise itsdiscretion, to adjust or not. This giving of priorintimation has been held by this Court in A.N. Shaikh,Sixteenth ITO v. Suresh B Jain [1987] 165 ITR 86/[1986]29 Taxman 191 to be mandatory before any adjustment 1(2021) 131 taxmann.com 119; 2021 SCC OnLine Bom 1799.2(2015) 60 taxmann.com 326; 2015 SCC OnLine Bom 6006. can be made.The exercise of powers under Section 245of the Act being discretionary has also been so held bythe Delhi High Court in Glaxo Smith Kline Asia (P) Ltd.V. CIT [2007] 290 ITR 35/160 Taxman 259. Werespectfully concur with the above view of the Delhihigh Court that the power under Section 245 of the Actis discretionary. Thus the exercise of a power ofadjusting demands out of refunds due would dependupon the facts and circumstances of each case. 15.In view of the above, as held by this Court inA.N.Shaikh, Sixteenth ITO’s case (supra) the giving of priorintimation under Section 245 of the Act is mandatory. Thepurpose being to enable the party to point out that there arefactual errors or some further developments, if any, forexample a stay of the demand, Supreme Court decisioncovering the demand which is still a subject matter of apending appeal etc which would warrant not adjusting therefund against the pending demand. Thus when a partydoes raise such issues in response to a prior intimation,the officer of the revenue exercising powers underSection 245 of the Act must apply his mind to it andmust record reason why the objection is not sustainableand also communicate it to the party. This before or atthe time of adjusting the refund. This alone wouldensure that that the power of adjustment under Section245 of the Act is not exercised arbitrarily. Such aprocedure would cause no prejudice to the revenue asthe occasion to grant the refund would not arise till theobjection to the intimation is disposed of. Of course theobjections should be disposed of expeditiously as unduedelay in granting of refund would cause prejudice to theparty entitled to the refund. 24.The Delhi High Court in the case of Maruti SuzukiIndia Ltd. (supra) had an occasion to deal with a similarcontention as is being raised by the Revenue in the present 24.The Delhi High Court in the case of Maruti SuzukiIndia Ltd. (supra) had an occasion to deal with a similarcontention as is being raised by the Revenue in the present case namely the recovery of tax cannot and would notinclude adjustment under Section 245 of the Act and thestay of recovery under Section 220(6) of the Act would notfetter the rights of the Revenue to adjust the demands outof refund due to the assessee. This submission wasnegatived by the Delhi High Court holding that recoverycould be made by various modes including adjustmentunder Section 245 of the Act. The Delhi High Court heldthat where an authority grants a stay of recovery underSection 220(6) of the Act, it could provide in that ordergranting stay of the recovery that the same would not beextended to adjustment of refund. In cases where the stayorder is in absolute terms, it would be inappropriate on thepart of the Revenue to adjust the demand by way ofadjustment. The Delhi High Court observed as under: “.... However, when an order of stay ofrecovery in simplistic and absolute terms ispassed, it would be improper andinappropriate on the part of the Revenue torecover the demand by way of adjustment. Incase of doubt or ambiguity, an application forclarification or vacation/modification of stayto allow adjustment can be, and should befiled. But no attempt should be made and itshould not appear that the Revenue has triedto overreach and circumvent the stay order.Obedience and compliance with the stay orderin letter and spirit is mandatory. A stay orderpassed by an appellate/higher authority mustbe respected. No deviance or breach should bemade.”recovery in simplistic and absolute terms ispassed, it would be improper andinappropriate on the part of the Revenue torecover the demand by way of adjustment. Incase of doubt or ambiguity, an application forclarification or vacation/modification of stayto allow adjustment can be, and should befiled. But no attempt should be made and itshould not appear that the Revenue has triedto overreach and circumvent the stay order.Obedience and compliance with the stay orderin letter and spirit is mandatory. A stay orderpassed by an appellate/higher authority mustbe respected. No deviance or breach should bemade.” (Emphasis supplied) We are in respectful agreement with this view. 26.The power under Section 245 is discretionary. The orders of stay have to be honoured before adjustment of thedemand out of refund is done by the Revenue. If theAssessing Officer did not accept the assessee’s contentionat the time of making the adjustment, the petitioner shouldhave been informed as to why the objections of the assesseeto the adjustment is not sustainable. Unless the AssessingOfficer exercising power under Section 245 of the Actsubjects himself to this discipline, he would be exercisinghis powers in an arbitrary manner.” (Emphasis added) 21.Rule was accordingly made absolute. 22.Similarly in Jet Privilege, the Division Bench had before it analmost identical question regarding Section 245. We reproduceparagraphs 4 to 10. “4.Mr. Pardiwalla states that alongwith appealchallenging the demand for A.Y. 2015–16 and 2016–17, StayApplications were also filed and orders have been stayedupon petitioner depositing 20% of the demand amounts.The fact of petitioner depositing 20% has not been disputedthough Mr. Walve states that extension to deposit 20% forA.Y. 2016–17 was not granted but petitioner still went aheadand deposited it. In our view that should not really matterbecause 20% has been deposited and respondents haveaccepted the same. The stay for both A.Y. 2015–16 and2016–17 have to be in force. 21.Rule was accordingly made absolute. 22.Similarly in Jet Privilege, the Division Bench had before it analmost identical question regarding Section 245. We reproduceparagraphs 4 to 10. “4.Mr. Pardiwalla states that alongwith appealchallenging the demand for A.Y. 2015–16 and 2016–17, StayApplications were also filed and orders have been stayedupon petitioner depositing 20% of the demand amounts.The fact of petitioner depositing 20% has not been disputedthough Mr. Walve states that extension to deposit 20% forA.Y. 2016–17 was not granted but petitioner still went aheadand deposited it. In our view that should not really matterbecause 20% has been deposited and respondents haveaccepted the same. The stay for both A.Y. 2015–16 and2016–17 have to be in force. 5.Mr. Pardiwalla submitted that before any adjustmentis made, it is mandatory to give intimation under Section245 of the Act to the person to whom the refund is due ofthe proposed action. In this case, admittedly, and we sayadmittedly because the affidavit in reply/additional affidavitfiled by respondent confirms that the intimation under Section 245 of the Act was given only on 13th May, 2020.At this point, if one refers to Form 26 AS which is theannaul tax statement under Section 203 (AA) of the Act forthe A.Y. 2015–16 and for A.Y. 2016–17, adjustment againstthe refund due has been made on 5th May, 2020, whereasthe mandatory notice under Section 245 of the Act has beengiven only on 13th May, 2020. Mr. Pardiwalla submits thatit is settled law that failure to comply with this mandatoryrequirement of prior intimation would make the entireadjustment as wholly illegal and therefore, respondentcould not have made the adjustment as they wanted to. Mr. Pardiwalla also submitted in any event,petitioner having deposited 20% amount and stay havingbeen granted under Section 220 (6) of the Act, it wouldmean that the time to make payment stands extended andpetitioner shall not be treated to be an assessee in default forthe recovery provisions to be set in motion and therefore,the entire amount refundable after giving credit to theamount already refunded becomes payable together withaccumulated interest. 6. Mr. Walve for respondent in fairness and in view ofthe affidavit in reply filed fairly accepted that intimationrequired under Section 245 of the Act was given only on13th May, 2020. But his explanation is that the process forintimating petitioner under Section 245 of the Act aboutoutstanding demand and interest payable was initiated on17th March, 2020 but due to technical error, the intimationgot stuck and could not be delivered to the assessee’sregistered E–mail id. Mr. Walve submitted that on 13thMay, 2020 technical error got rectified in CPC portal andintimation under Section 245 of the Act was sent to theassessee. 7.For ease of reference, we shall quote Section 245 ofthe Act, which read as under; 245.Set off of refunds against tax remainingpayable 2 Where under any of the provisionsof this Act, a refund is found to be due to anyperson, the [Assessing] Officer, DeputyCommissioner (Appeals)], Commissioner(Appeals)] or Chief Commissioner orCommissioner], as the case may be, may, inlieu of payment of the refund, set off theamount to be refunded or any part of thatamount, against the sum, if any, remainingpayable under this Act by the person to whomthe refund is due, after giving an intimation inwriting to such person of the action proposedto be taken under this section. 7.For ease of reference, we shall quote Section 245 ofthe Act, which read as under; 245.Set off of refunds against tax remainingpayable 2 Where under any of the provisionsof this Act, a refund is found to be due to anyperson, the [Assessing] Officer, DeputyCommissioner (Appeals)], Commissioner(Appeals)] or Chief Commissioner orCommissioner], as the case may be, may, inlieu of payment of the refund, set off theamount to be refunded or any part of thatamount, against the sum, if any, remainingpayable under this Act by the person to whomthe refund is due, after giving an intimation inwriting to such person of the action proposedto be taken under this section. 8.Mere perusal of the section makes it clear that theofficers mentioned in the section, as the case may be, may,in lieu of payment of the refund, set off the amount to berefunded or any part of that amount, against the sum, if any,remaining payable under the Act by the assessee to whomthe refund is due. The officer may set off the amount to berefunded or any part of that amount only after giving anintimation in writing to the assessee of the action that heproposed to take under this section. Therefore, it clearlyrequires the intimation to be given prior to the officer setsoff the amount payable against the amount to be refunded.It can be neither simultaneous nor subsequent. We find support for this view in Suresh B. Jain v.A.N. Shaikh, Sixteenth Income–tax Officer [1986] 28 Taxman321 [1987] 165 ITR 151 (Bom.), confirmed by the DivisionBench of this court in A.N. Shaikh, Sixteenth Income–taxOfficer v. Suresh B. Jain [1986] 29 Taxman 191 [1987] 165ITR 86 (Bom.) and in Hindustan Unilever Limited v. DeputyCommissioner of Income–tax–1 [2015] 60 taxmann.com326/233 Taxman 353/377 ITR 281 (Bom.) relied upon by Mr.Pardiwalla. 9.The fact that respondent has not followed themandatory prior requirement of intimation underSection 245 of the Act would make the adjustmentwholly illegal and therefore, respondent was clearly inerror in not refunding the amount. 10.As per the Office Memorandum [F. No. 404/72/93 –ITCC] issued dated 29th February, 2016, amended byanother Office Memorandum dated 25th August, 2017 theassessing officer shall grant stay of demand where theoutstanding demand is disputed on assessee paying 20% ofthe disputed demand. Admittedly, petitioner has filed anappeal disputing the outstanding demand for A.Y. 2015–16and A.Y. 2016–17 and have deposited 20% of the amountdemanded. Therefore, there is a stay of demand in force.The effect of this deposit would mean that the time to makethe payment stands extended and petitioner is not deemedto be an assessee in default for the recovery provisions to beset in motion [(Hindustan Unilever Limited., case (supra)].” (Emphasis added) 23.Accordingly, even in that matter Rule was made absolute. 24.Before us therefore there are now two issues. The first is thatthese unilateral adjustments without prior intimation are contrary tothe specific wording of the statute itself. They are contrary to settleddecisions of this Court. The second aspect is the failure to disposeof the stay application and the rectification application. Thesecannot be kept pending indefinitely like this. 25.We have yet to find a reason in the Affidavit in Replyjustifying the failure to take up and dispose of the stay applicationand the rectification application. 26.Having regard to these circumstances and the unambiguousstate of the law in this regard, we make Rule absolute in terms ofprayer clauses (a), a(i), a(ii), a(iii), (b) and (c) set out above. 27.The Petition is disposed of in these terms with no order as tocosts. 28.All refunds are to be processed and paid out within a period offour weeks from today. We are told that the stay application has beendecided after this Petition was filed and the Petitioner has nogrievance in that regard. 25.We have yet to find a reason in the Affidavit in Replyjustifying the failure to take up and dispose of the stay applicationand the rectification application. 26.Having regard to these circumstances and the unambiguousstate of the law in this regard, we make Rule absolute in terms ofprayer clauses (a), a(i), a(ii), a(iii), (b) and (c) set out above. 27.The Petition is disposed of in these terms with no order as tocosts. 28.All refunds are to be processed and paid out within a period offour weeks from today. We are told that the stay application has beendecided after this Petition was filed and the Petitioner has nogrievance in that regard. 29.The rectification applications are to be taken up and decidedon a priority basis as early as possible and preferably within a periodof eight weeks from today. 30.It is notable that there are no reasons recorded in compliancewith the provisions of Section 245(2) of the IT Act either. (Kamal Khata, J) (G. S. Patel, J)