Wp/809/2010 Of Bina Power Supply Company Limited v. The Deputy Commissioner Of Income Tax, Circle 3(1), Mumbai And 3 Ors

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (L) NO.727 OF 2010 Bina Power Supply Company Ltd. ..Petitioner. V/s. The Commissioner of Income Tax & Ors. ..Respondents. Mr. J.D. Mistry with A.K. Jasani for petitioner Mr. Suresh Kumar for respondents. CORAM : DR. D.Y.CHANDRACHUD AND J.P.DEVADHAR, JJ. DATED : 6TH APRIL, 2010 P.C. :- 1.Rule, by consent made returnable forthwith. Counsel for the respondents waives service. With the consent of both counsel, the petition is taken up for final hearing. 2.The petition is directed against orders dated 17th March 2010 and 24th March, 2010 and a letter dated 25th March, 2010 of the Respondents. By the first of these communications dated 17th March, 2010 a demand for tax has been raised against the petitioner in an amount of Rs.26,41,65,616/-. By the aforesaid order dated 24th March, 2010 the Commissioner of Income Tax-3 has directed the petitioner to pay fifty per cent of the demand upon which it has been stated that the balance will be kept in abeyance until 30th September, 2010 or till the disposal of the appeal. This order was passed on an application for the stay of the demand for assessment years 1999-00, 2000-01, 2001-02, 2002-03 and for assessment years 2005-06 and 2007-08. Following the order, a communication has been addressed by the Tax Recovery Officer on 25th March, 2010. 3.Now, it is not necessary to keep this proceeding pending before this Court since, it is apparent from the order dated 24th March, 2010 that absolutely no reasons have been indicated in support of the order. The Commissioner of Income Tax was required by law to furnish reasons in support of the order rejecting the application for the stay of the demand. In the circumstances, the appropriate course would be to set aside the order dated 24th March, 2010 passed by the Commissioner of Income Tax-3 (Exhibit 'Z' to the petition) and to direct that a reasoned order shall be passed after furnishing to the assessee, an opportunity of being heard. Ordered accordingly. Consequential to the aforesaid, the communication dated dated 25th March, 2010 of the Tax Recovery Officer is set aside. No further coercive steps shall be taken against the petitioner, until the application for stay is disposed of in respect of the demand which forms the subject matter of the present proceedings. 4.We make it clear that this Court has not expressed any opinion on the merits of the matter. 5. Rule is made absolute in the above terms. In the circumstances of the case, there shall be no order as to costs. (J.P.DEVADHAR, J.) (DR. D.Y.CHANDRACHUD, J.)