TMI Blog2000 (8) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... tice dated July 22, 1996, under section 17 of the Wealth-tax Act, 1957, by which the petitioner was asked to submit a return within 35 days on receipt of the notice. This notice was issued as the Assessing Officer had reason to believe that the petitioner's net wealth chargeable to tax for the assessment year 1990-91 had escaped assessment within the meaning of section 17 of the Wealth-tax Act. Annexure P6 is a notice dated July 22, 1996, by which the petitioner was asked to prepare a true and correct return of income of the petitioner in respect of which the petitioner was assessable under the Income-tax Act during the previous year relevant to the assessment year 1993-94. Further, the petitioner was informed that the return should be in the appropriate form as prescribed in rule 12 of the income-tax Rules, 1962, and a blank return form was also enclosed. The petitioner was asked to produce the accounts and/or documents before respondent No. 3, on August 9, 1996. Vide order dated November 22, 1996, the learned single judge of this court passed an order staying the operation of all the aforesaid three notices. The main grounds for granting stay by the learned single judge were th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The relevant portion of the order is as follows: "The managing director or any other person authorised to operate the bank accounts of the said petitioner-company shall not make drawal exceeding Rs.1,000 daily till March 24, 1999 ... It is open to the income-tax authorities to approach this court for modification or vacation of this order, if so advised." Thereafter vide order dated April 20, 1999, the interim order dated March 20, 1999, was extended till the disposal of the writ petition. The typographical error which occurred in the order dated April 20, 1999, was corrected vide order dated July 19, 2000. The Additional Commissioner of Income-tax, Special Range, Jalpaiguri, who is holding the charge of erstwhile Assessing Officer, i.e., Deputy Commissioner of Income-tax, Jalpaiguri Range, respondent No. 3, filed Miscellaneous Application No. 99 of 2000 on April 17, 2000, praying for vacating the order of stay dated March 29, 1997, and modification of the order dated March 20, 1999. The Additional Commissioner of Income-tax in paragraphs 7 and 8 of the application has stated as follows: "7. That in the meantime the petitioner-company had filed a copy of its audited bal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be in a position to recover the amount of rupees eighteen crores forty lakhs twentyone thousand three hundred sixty four with interest and the balance of convenience lies in favour of the income-tax authority. The questions of implementation, enforcement of the Income-tax Act in Sikkim and of jurisdiction are pending before this court for adjudication, but, these, by themselves, do not entitle the petitioner for an order of stay, and the respondents, should not be restrained from recovering the taxes and, therefore, the orders of stay should be vacated. In paragraphs 3, 4 and 5 of the writ petition, the petitioner stated that the petitioner had filed income-tax returns for the assessment years 1990-91 to 1993-94 in the month of June, 1994, before the Assistant Commissioner of Income-tax, Siliguri, Circle I, under the Jalpaiguri Range, West Bengal, and the assessment order was passed on July 29, 1994. The petitioner-company moved an application under section 154 of the Income-tax Act, 1961, claiming rectification in respect of the assessment and the prayer was allowed by the order dated March 2, 1995. The petifioner-company filed income-tax return for the assessment year 1994-95 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 (xiii) that once the petitioner had submitted to the jurisdiction of the income-tax authorities at Siliguri by submitting returns, etc., it cannot now be permitted to turn round and say that the Income-tax Act has not been enforced in Sikkim and that respondent No. 3 has no jurisdiction to issue any such notices. However, the assessment was completed on November 30, 1998. The main ground on which the writ petition rests and the main ground of granting stay vide order dated November 22, 1996, was pendency of three writ petitions, viz., Writ Petition No. 1 of 1993--S.P. Wangdi v. Union of India; Writ Petition No. 9 of 1994--Nandu Thapa v. Union of India and Writ Petition No. 23 of 1994--T.R. Sharma v. Union of India which were withdrawn on April 23, 1998, August 19, 1997, and November 17, 1995, respectively. With the disposal of the aforesaid three writ petitions, the interim order dated August 22, 1995 (annexure P3) passed in these petitions, stood vacated. In the instant case, the petitioner has not challenged the notices straightaway. Before filing the writ petition, the petitioner voluntarily filed income-tax returns at Siliguri under Jalpaiguri Range in the State of Wes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union of India v. Jain Shudh Vanaspati Ltd. (C.A. No. 11450 of 1983) and Samarias Trading Co. Pvt. Ltd. v. S. Samuel [1984] 4 SCC 666; AIR 1985 SC 61, administered strong admonition deprecating the practice of the High Court of granting ad interim ex parte orders which practically have the effect of the grain of the main relief in the petition under article 226 of the Constitution, and observed: 'We have come across cases where the collection of public revenue has been seriously jeopardised and budgets of Governments and local authorities affirmatively prejudiced to the point of precariousness consequent upon interim orders made by courts. In fact, instances have come to our knowledge where Governments have been forced to explore further sources for raising revenue, sources which they would rather well leave alone in the public interest, because of the stays granted by courts. We have come across cases where an entire service is left in a state of flutter and unrest because of interim orders passed by courts, leaving the work they are supposed to do in a state of suspended animation. We have come across cases where buses and lorries are being run under orders of court though they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 624, it is held by the Supreme Court as follows: "3. It is needless to stress that a levy or impost does not become bad as soon as a writ petition is instituted in order to assail the validity of the levy. So also there is no warrant for presuming the levy to be bad at the very threshold of the proceedings. The only consideration at that juncture is to ensure that no prejudice is occasioned to the rate payers in case they ultimately succeed at the conclusion of the proceedings. This object can be attained by requiring the body or authority levying the impost to give an undertaking to refund or adjust against future dues, the levy of tax or rate or a part thereof, as the case may be, in the event of the entire levy or a part thereof being ultimately held to be invalid by the court without obliging the taxpayers to institute a civil suit in order to claim the amount already recovered from them." In the instant case, the assessment order cannot be said to be bad at this stage simply because the extension and enforceability of the Income-tax Act with respect to Sikkim and also because the jurisdiction of the Central income-tax authorities located at Jalpaiguri have been challenged ..... X X X X Extracts X X X X X X X X Extracts X X X X
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