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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
J.B.Pardiwala, Nisha M. Thakore, JJ.
Harsh Dipak Shah – Petitioner
Versus
Union Of India – Respondent
R/Special Civil Application No. 19804, 19808, 19815 of 2021
Decided On : 04-01-2022
Constitution of India,1950 - Articles 226 and 142 - Income Tax Act, 1961 - Sections 132, 153(A) , 143(2) , 142(1) , 251 and 220(6) Notice of demand - Assessment orders - Public interest - Governments are not run on mere bank guarantees notice that very often, some courts act as if furnishing bank guarantee would meet the ends of justice - No Governmental business or for that matter no business of any kind can be run on mere bank guarantees - Liquid cash is necessary for the running of a Government as indeed any other enterprise consider that where matters of public revenue are concerned, it is of utmost importance to realize that interim orders are not to be granted merely because a prima facie case has been shown - More is required. balance of convenience must be clearly in favour of making of an interim order and there should not be slightest indication of a likelihood of prejudice to public interest – Respondent issued questionnaire under Section 142(1) of Act for all aforesaid assessment years, i.e. - Respondent No.4, proceeded to issue consolidated show-cause notices to writ applicant calling upon the writ applicant to show-cause as to why income should not be assessed by addition of the amount stated in show-cause notice - Held, Court decline to interfere having regard to quantum of amount involved in both the matters – Court leave it open for the writ applicants of both said writ applications to file an appropriate application seeking appropriate relief before First Appellate Authority, i.e, the CIT (Appeals) – Court are saying so because such powers to grant stay can be implied as inherent power of First Appellate Authority - Powers of Appellate Authorities are indisputably concurrent and coextensive with that of Assessing Authority but wider and superior in nature. Section 251 of the Act clearly stipulates that in disposing of an appeal, CIT (Appeals) can confirm, reduce, enhance or annul the assessment. Section 251 (1) (c) of Act provides that in other cases, he may pass such orders in appeal as he thinks fit - These words harmoniously read, definitely mean that powers of appellate authorities under Act are wide enough - Power to grant stay against recovery of disputed demand is to be taken away from the first appellate authority - Such implied, necessary and inherent power must necessarily be read into these provisions conferring the powers upon the appellate authority to modify impugned assessment order in any manner. In specific terms, first appellate authority can even enhance the taxable income - While he has the power to reduce or completely set at naught the assessment. - Words "as he thinks fit" in Section 251 (1) (C) are not redundant, as no such redundancy can be attributed to the Parliament - Writ applications stand disposed of.
JUDGMENT :
J.B. Pardiwala, J.
1. Since the issues raised in all the captioned writ applications are interrelated and the parties are also the same, those were taken up for hearing analogously and are being disposed of by this common judgment and order.
2. “Governments are not run on mere bank guarantees. We notice that very often, some courts act as if furnishing bank guarantee would meet the ends of justice. No Governmental business or for that matter no business of any kind can be run on mere bank guarantees. Liquid cash is necessary for the running of a Government as indeed any other enterprise. We consider that where matters of public revenue are concerned, it is of utmost importance to realize that interim orders are not to be granted merely because a prima facie case has been shown. More is required. The balance of convenience must be clearly in favour of the making of an interim order and there should not be the slightest indication of a likelihood of prejudice to the public interest”. (Assistant Collector of Central Excise vs. Dunlop India Ltd. & Ors., 1985 (1) SCC 260)
3. The aforesaid are the observations of the Supreme Court relating to the tendency of the courts to grant interim orders with great potential for public mischief for the mere asking. Such tendency was deprecated by the Supreme Court almost four decades back.
4. Having regard to the subject matter of the captioned writ applications, the Revenue wants us to keep the aforesaid observations of the Supreme Court in mind.
5. For the sake of convenience, the Special Civil Application No.19804 of 2021 is treated as the lead matter.
6. By this writ application under Article 226 of the Constitution of India, the writ applicant-assessee has prayed for the following reliefs;
(B) Your Lordship may be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other appropriate writ, order or direction quashing and setting aside the impugned demand notices all dated 30.09.2021 for the years 2010-11 to 2020-21.
(C) Your Lordships may be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other appropriate writ, order or direction directing the Respondent No.2 to consider the request of the petitioner and not to insist on any pre-deposit for considering the stay of the recovery of the amount which is subject matter of appeal before the Respondent No.3.
(D) Pending hearing and final disposal of this petition, Your Lordships may be pleased to stay the operation and execution of the impugned order dated 8.12.2021 and 15.12.2021 passed by the Respondent No.2 and the demand notices all dated 30.09.2021 and to grant waiver of pre-deposit in the facts of the present case.
(E) Pending hearing and final disposal of this petition, Your Lordships may be pleased to direct the respondents including the Respondent No.2 or the other respondent authorities under the IT Act to refrain from taking any coercive action including any action under the Provisions of the IT Act against the petitioner, pending the appeals preferred before the Respondent No.3 or in respect of the assessment orders passed by the Respondent No.4 against the petitioner.
(F) Your Lordships may be pleased to grant adinterim relief in terms of Para-11 (C ) and 11(D).
(G) Your Lordships may be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other appropriate writ, order or direction directing the Respondent No.2 to grant early hearing with respect to the pending appeals of the present petitioner without insisting for complying with t
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