Tamil Nadu State Transport Corporation (Kumbakonam) Limited vs Chief CIT and Others

R.S. Ramanathan J.

Heard both sides.

The petitioner, in both the writ petitions, is the State Government Transport Corporation and aggrieved by the assessment orders framed by the

fourth and fifth respondent, respectively, u/s 143(3) read with section 147 of the Income Tax Act, 1961, for the year 2001-02 to 2005-06, the

petitioner filed appeals before the third respondent on 21-1-2009, and the appeals are pending before the authorities. The petitioner also applied

for stay of the assessment order for the year 2004-2005 and that is also pending.

It is submitted by the learned counsel appearing for the petitioner that various divisions of the Transport Corporation in Karaikudi, Trichy and

Pudukottai got merged with the Kumbakonam division, by the order of the Company Law Board, dated 30-12-2003, with effect from 1-4-2001,

and the respondents interpreted the amalgamation differently, resulting in multiplicity of the assessment orders against which appeals were filed by

the petitioner.

It is further submitted by the learned counsel appearing for the petitioner that during the pendency of the appeals before the third respondent, the

fifth respondent has started and commenced the recovery proceedings in spite of the bad financial status of the petitioner. Therefore, the petitioner

filed the stay petition before the fifth respondent on 18-2-2009, to stay the recovery proceedings and that was rejected by the fifth respondent,

dated 18-2- 2009, without assigning any reason. Though the petitioner had moved the second respondent, the second respondent had taken the

same on file and heard the matter in three hearings and the same is pending. While so, the respondents resorted to coercive recovery proceedings

by attaching the bank accounts, which affected the day-to-day affairs of the Transport Corporation and, hence, these writ petitions.

According to the learned counsel appearing for the petitioner, the respondents are not considering the prayer for stay of collection of disputed

arrears in proper perspective and without considering the fact that the petitioner is the Tamil Nadu Government public sector undertaking and

owns immovable properties and other properties, ought to have granted stay till the disposal of the appeal.

The learned counsel appearing for the respondents submitted that though they are aware of the fact that the petitioner is a Government

undertaking having immovable properties and having regard to the fact that tax arrears are more than 10 crores, unless the income tax department

takes recovery proceedings, it is not possible to collect the dues.

It is seen from the impugned order, no reason was stated for rejecting the stay of collection of tax. The fourth respondent has only stated that

mere filing an appeal against the assessment order will not be sufficient reason to stay the recovery of demand. When the petitioner approaches the

authority for the grant of stay and it is the duty of the authority to give reason either for granting stay or for refusal to grant the stay and without

assigning any reason, the authorities should not have passed the order rejecting the request of the petitioner for stay. Admittedly, the appeals are

pending and the petitioner is a public sector undertaking owned by the Government of Tamil Nadu and is having huge immovable properties and

movable properties such as transport buses. Under these circumstances, the fourth respondent, ought to have considered the request of the

petitioner for the stay of the recovery proceedings. Hence, I set aside the orders passed by the fourth respondent in W. P. (MD) No. 2209 of

2009, dated 9-1-2009, and the fifth respondent in W. P. (MD) No. 2210 of 2009 dated 18-2-2005, and direct the respondents to consider the

request of the petitioner for the grant of stay and pass a speaking order.

It is submitted by the learned counsel appearing for the petitioner that the third respondent may be directed to dispose of the appeal as they

have got a fair chance in the appeal. The learned counsel appearing for the respondents has no objection for the disposal of the appeal at the

earliest. Hence, it is ordered, directing the third respondent to dispose of the appeal pending on his file, within a period of four weeks from the date

of the receipt of a copy of this order.

With the above direction, these writ petitions are disposed of. Consequently, connected miscellaneous petitions are closed. No costs.