The Karnataka High Court, on 9th January 2018, directed the Principal Commissioner of Income Tax and the Assistant Commissioner of Income Tax to pay personal costs for filing frivolous writ petition to challenge a stay order passed by the ITAT.
While doing so, Justice Vineeth Kothari critizised the official for raising unsustainable, illegal and high pitched demands and enforcing coercive recovery and challenging stay orders shows utterly irresponsible and unfair behaviour.
Earlier, the Income Tax Appellate Tribunal had granted stay of demand to an extent of Rs.22.17 Crores to the assessee finding that they had a good prima facie case in the pending appeal before it
The Court, earlier had a prima facie opinion that the interim order passed by the learned Tribunal was in fair exercise of its discretion and apparently no good reason was found for the Revenue to challenge the said order by invoking writ jurisdiction. Therefore, on 02.01.2018, the Court directed the petitioners to file an affidavit explaining the reason for challenging the said interim order passed by the ITAT before the High Court.
In pursuance of the above direction, instead of the Chief Commissioner of Income Tax, a lower authority the Principal Commissioner, one Mr.Yogesh Pande Son of B.D.Pande, working as Principal Commissioner of Income Tax (2), Bengaluru, other than the Principal Commissioner who approved the sanction of filing of the present writ petition through the Assistant Commissioner of Income Tax has filed an Affidavit before the Court.
Considering the arguments from both the sides, the Court came to a conclusion that the issues raised in the petition have larger implications and connotations rather than deciding one case in peculiar facts.
According to the Court, it is the unnecessary dogged approach of the Revenue to multiply the litigations in the Constitutional Courts, in turn wasting the precious public hours of time and unholy desire to become a litigant in the Constitutional Courts at Government costs, though there may be absolutely no justification for doing so.
“The efforts of the Revenue to prove their point that they had a good case on merits before the Constitutional Courts rather than respecting the orders passed by the statutorily created Tribunals not only shows lack of judicial discipline and hierarchical discipline which they should maintain, but treating the constitutional remedies as a vested right with them. The public functionaries and public officials cannot be allowed to spend Government money and public time much less public time of the Constitutional Courts just for the sake of proving their such fictional desires. First raising unsustainable, illegal and high pitched demands and then seeking to coercively recover the same even showing scant regard to the orders passed by highest Tribunal under the Act and for that invoking the writ jurisdiction to seek support to their such effort is nothing but an utterly irresponsible and unfair behaviour. It is the lack of such discipline with the Government Officials which turns Government Departments as a major litigant in the Constitutional Courts, in turn depriving the Constitutional Courts to devote their time for looking into the causes of poor people, which deserve their time and attention of the court more than such Government Departments.”
The bench further observed that the issue involved in the case was already settled by the decisions of the Delhi High Court and the Bengaluru Tribunal itself. This shows that though there was chances to grant absolute stay of demand, the Tribunal given a conditional stay by asking the assessee to deposit 2 crores with a view to preserve the interest of Revenue.
“Still the Revenue did not feel satisfied and instead of pursuing hearing of the appeal before the ITAT, chose to file the present writ petition before this Court which is absolutely misconceived remedy availed by them. Were these officials trying to prove their superior wisdom over the wisdom of Tribunal and already rendered precedent or overawe the Tribunal by the intervention of the higher constitutional courts, even on a misconceived petition?,” the Court asked.
Consequently, the writ petition was dismissed with a direction to the officials to pay cost of Rs.50,000/-. The said costs will be paid by these officials from their personal resources and not from the Government fund within a period of two months from today to the Legal Services Authority of the State, to be utilized for the cause of poor litigants.
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