Gujarat Maritime Board vs Assistant Commissioner of Income Tax

K.A. Puj, J.—Rule. Mrs. Mauna M. Bhatt, learned standing Counsel waives service of notice of rule on behalf of the Revenue.

This petition is filed under Article 226 of the Constitution of India praying for quashing and setting aside the order dt. 28th Aug., 2008 Annex. A and also praying for directions to the respondent not to recover the demand till the stay petition filed by the petitioner is disposed of by the Tribunal, Ahmedabad.

Heard Mr. S.N. Soparkar, learned senior Counsel for the petitioner and Mr. M.R. Bhatt, learned senior standing Counsel with Mrs. Mauna M. Bhatt, learned standing Counsel appearing on caveat on behalf of the Revenue and perused the memo of the petition as well as the affidavtt-in-reply filed by Mr. D.C. Mishra, Asstt. CIT, Gandhinagar Circle, Gandhinagar.

In view of the urgency and limited indulgence sought for, the matter is taken up for hearing today itself.

Since the appeal and stay application are pending before the Tribunal, Ahmedabad, this Court has not gone into the merits of the matter. Both the learned Counsel have made their submissions on the issue as to whether any stay can be granted in the present case. The Court has considered their submissions.

In view of the order passed by the CIT(A) for the asst. yr. 2004-05 in assessee''s own case and in view of the Circular/Instruction No. 1914, dt. 2nd Dec, 1993 issued by the CBDT and in view of the judgment of this Court in the case of Madhu Silica Pvt. Ltd. Vs. Commissioner of Income Tax and Another, as well as the judgment of the Hon''ale Supreme Court in the case of Commissioner of Income Tax Vs. Programme for Community Organisation, , this Court is of the prima facie view that the petitioner deserves for stay against the outstanding demand till the Tribunal hears and decides the stay application.

The preliminary objection raised by the Revenue that unless and until approval of the Committee on Disputes is sought by the petitioner, the petition is not maintainable. This view is taken care of by the Andhra Pradesh High Court in the decision of Andhra Pradesh Power Generation Corporation Ltd. Vs. Assistant Commissioner of Income Tax and Another, , so far as the State Government undertaking is concerned and the dispute is between the State Government and the Central Government or their undertakings, no approval of Committee on Disputes is required.

Since, the matter is pending before the Tribunal, we have not discussed the controversy between the parties at length. It is, however, required to be noted that the learned CIT(A) has rejected the stay application of the assessee only on 28th Aug., 2008 and the assessee has preferred the stay application before the Tribunal on the first available opportunity i.e. on 1st Sept., 2008. It is specifically prayed before the Tribunal to stay the outstanding demand till the decision of appeal and this was communicated to the respondent on 1st Sept., 2008 itself. The petitioner was asked to pay the demand immediately or to face the dire consequences. Since the Tribunal is taking up the matter only on particular day in the week/fortnight, the petitioner has to rush this Court.

Since this Court is of the prima facie view that the petitioner deserves stay against the demand in question in view of the peculiar facts and circumstances of the case till the Tribunal decides the stay application, the relief against stay of outstanding demand as prayed for in the present petition is granted till the Tribunal decides the stay application on the condition that the petitioner shall furnish bank guarantee or the letter from the State Government to the tune of Rs. 20 crores (Rupees twenty crores), within one week from today. It is made clear that this order would not come in the way of the Tribunal to decide the stay application and/or the appeal. It is open for the Tribunal to decide stay application and/or appeals on their own merits. It is expected that if disposal of appeals takes some time, stay applications may be decided as expeditiously as possible, preferably within one month from today.

Subject to the aforesaid observations and directions, this petition is disposed of. Rule is made absolute to the aforesaid extent. DS is permitted.