JUDGMENT :

[Sonia Gokani, J.]

1. The petitioner is the company registered within the territory of India. The petitioner seeks the direction upon the respondent to issue the refund along with the applicable interest in the following factual background:

1.1 The petitioner filed return of income electronically on 15.03.2013 declaring the total income at Rs.43,01,51,910/- for the assessment year 2012-2013.

1.2 His case was selected for scrutiny under Section 143 of the Income Tax Act, 1961 (‘the IT Act’ hereinafter) and the notices were served by the Jurisdictional Assessing Officer, Surat. The Assessment Order came to be passed on 31.03.2015 determining the total income of the petitioner at Rs.87,35,93,335/- raising the demand of Rs.20,53,38,770/-.

1.3 The petitioner preferred an appeal before the Commissioner of Income Tax (Appeals) on 31.03.2015 in prescribed Form 35 on 30.04.2015. We are given to understand that certain details called for have been tendered and the matter is still pending for final adjudication.

1.4 It is the grievance on the part of the petitioner that against the tax demand, which includes the interest raised by the respondent and the amount of Rs.30,43,48,695/- have been adjusted by the respondent against the refunds receivable for various years, which constitutes 65.43% of the total demand raised. Following tabular details of the refund and adjustment made would be necessary to be reproduced:

1.5 The petitioner filed an application with the respondent as well as the Commissioner of Income Tax requesting to release the refund of INR 9.32 Crore (rounded of) i.e. the amount adjusted beyond 20% of the demand raised by the respondent in accordance with the Office Memorandum issued by the Central Board of Direct Taxes (‘the CBDT’ hereinafter) dated 31.07.2017 which prescribes the payment of 20% of the disputed amount if the demand is contested before the Commissioner of Income Tax(Appeals). The respondent summarily rejected the application filed by the petitioner on 11.01.2022.

1.6 Aggrieved by the action of the respondent for the adjustment of the refund and with no other alternative remedy left, the petitioner is before this Court seeking to challenge the said action under Article 226 of the Constitution of India.

1.7 Reliance is placed on the Instruction No.1914 dated 02.02.1993 issued by the CBDT which provides the guidelines granting the stay of demand by the Assessing Officer and procedure to be followed for recovery of the demand.

1.8 It is further averred that the authority since insists on payment of the high proportion of the disputed demand for grant of stay of the demand, the revised guidelines were issued vide Office Memorandum dated 29.02.2016 in partial modification of the Instruction No.1914. It provides for the grant of stay of demand till the disposal of the First Appeal on payment of 15% of the disputed demand unless, of course, the case falls in the category. Relevant portion of the Office Memorandum dated 29.02.2016 is as follow:

“(A) In a case where the outstanding demand is disputed before CIT (A), the assessing officer shall grant stay of demand till disposal of first appeal on payment of 15% of the disputed demand, unless the case falls in the category discussed in para (B) hereunder.

(B) In a situation where,

(a) the assessing officer is of the view that the nature of addition resulting in the disputed demand is such that payment of a lump sum amount higher than 15% is warranted (e.g. in a case where addition on the same issue has been confirmed by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of Revenue