9911796707
TMI Blog1995 (7) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... im. It was further ordered that the balance demand of Rs. 5 lakhs which related to several years as stated above will be stayed till the final result of all the appeals by this Tribunal. The assessee was also directed to furnish security to the satisfaction of the Assessing Officer covering the stayed demand. The Assistant Registrar of this Tribunal was directed to post for hearing all the appeals from 1979-80 to 1987-88 on out of turn and priority basis within 30 days from the date of intimation by the assessee about the compliance of the conditions mentioned in para 3(iv) of the said order dated 19-11-1993. Stay was granted considering the existence of total demand for all the years and directions as contained in order dated 19-11-1993 were not given considering demand for each year. 2. Thereafter the assessee filed a letter dated 23-2-1994 stating that all formalities and conditions mentioned in our above order dated 19-11-1993 were complied with. The stay petition was therefore directed to be posted on 25-3-1994 for further orders on which day Shri S.N. Soparkar, Advocate appeared and submitted that the demand for the two years 1985-86 and 1986-87 was to the tune of Rs. 2,13,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letters that its demand for the two years was to the tune of Rs. 2,13,988. The Assessing Officer to whom direction was issued by us for collecting the sum of Rs. 1,65,920 and to issue challan to the assessee for, enabling payment, has also not been complied with by him. The Assessing Officer has merely stated in his letter dated 5-4-1994 that the assessee has given security in the form of lien on balance of public provident fund account against the above stay demand. Whether this constitutes sufficient security or not we do not wish to express any opinion. 5. From the above discussion it is abundantly clear that now there is no risk or danger to the assessee from the revenue authorities nor any hardship or financial difficulty will be caused to the assessee as is evident from the letter of the Assessing Officer dated 5-4-1994 addressed to the assessee. It appears to us that the Assessing Officer is not interested in the collection of the demand disputed in the second appeals pending before this Tribunal. 6. In these circumstances it is not desirable that the stay granted through our order dated 19-11-1993 should any longer be continued. The same is hereby withdrawn and cancelled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that before passing any order in relation to the aforesaid matter, an opportunity of hearing should necessarily be given to the parties. The case should, therefore, be fixed for hearing in the open court on any Friday. Supplementary Order by Shri Abdul Razack Judicial Member- The learned Accountant Member is not inclined to sign the order authored by me on 11-5-1994 for withdrawing stay granted to the assessee/applicant through our order dated 19-11-1993 because according to him, the assessee was not heard before passing the stay withdrawal order and thus amounting to non-observance of rules of natural justice by me. In saying so the learned Accountant Member relied on the decision of the Supreme Court in CA Gautam's case. 2. I have least quarrel or disagreement with the learned Accountant Member regarding observance of the rules of natural justice. Not only the decision of the Apex Court in C.B.Gautam' case, but innumerable and countless decisions of the Apex Court as well as of various High Courts in this country including that of the jurisdictional Gujarat High Court on the observance of rules of natural justice are uppermost and registered in my mind. I must, with some se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trued as a sufficient, adequate or satisfactory security in the eyes of law when as per the provisions of section 60 of C.P.C. and Provident Fund Act the amount lying in the provident fund cannot be attached in execution of a court's decree. 6. It is one of the cardinal and sacrosanct principles of rule of law and administration of justice that any person obtaining any stay or in junction order from any court or Tribunal has to scrupulously obey and comply with such order and the directions given therein. It is needless to say that any breach, non-compliance or disobedience of the order or any direction contained therein, then the same will automatically debar and disentitle an applicant from obtaining, availing and enjoying the advantages and benefits flowing from such stay of injunction order. 7. Since in the instant case the applicant/assessee has committed a breach and disobeyed and failed to comply with the directions given by us in our Stay Order of 19-11-1993 the said order automatically got vacated and no separate, formal or legal order is required to be passed. Yet we heard the applicant on 25-3-1994 on his letter dated 23-2-1994 and after the hearing and making enquirie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in the case of Ravi S. Naik v. Union of India AIR 1994 SC 1558, 1568 :--- "But while applying the principle of natural justice it must be borne in mind that they are not imputable but flexible and they are not cast in a rigid mould and they cannot be put in a legal strait-jacket. Whether the requirements of natural justice have been complied with or not has to be considered in the context of the facts and the circumstances of a particular case." 12. I have written these few lines in order to clear the misapprehension in the mind of the learned Accountant Member that I am not interested or keen in observing rules of natural justice particularly in the instant case. 13. The orders passed by me and the learned Accountant Member will, therefore, be placed before the President of the Tribunal in terms of section 255(4) for referring it to other Member(s) of the Tribunal for majority opinion. NOTE FOR REFERENCE TO HON'BLE PRESIDENT, ITAT As we differ in our views in the stay petition filed by the assessee Shri Babubhai B. Patel (HUF) being S.P. No. 42/Ahd./ 1993 relating to assessment years 1979-80 to 1987-88 we request the Hon'ble President, ITAT to refer under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s order after obtaining challan from the Assessing Officer, who is directed to issue the same to the assessee on approaching him. (ii) There shall be absolute stay of the balance sum of Rs. 5,00,000 till the final result of the appeals by this Tribunal and the Assessing Officer shall not initiate or take any steps for collection/recovery of the said sum of Rs. 5,00,000 till the final result of the appeals by the Tribunal. (iii) The assessee/petitioner shall furnish security to the satisfaction of the Assessing Officer for the demand stayed. (iv) The assessee/petitioner shall intimate to the Assistant Registrar of this Tribunal about compliance of the conditions as mentioned in (i) & (iii) above. 4. The Registry shall post all the appeals mentioned above within 30 days from the date of intimation by the assessee/petitioner about the compliance of the conditions as mentioned in (iv) above. 5. The petitioner / assessee shall not take any adjournment when the appeals are posted for hearing and disposal, nor deliberately delay the disposal of the appeals in any manner whatsoever; otherwise the stay granted as per condition (it) above shall stand vacated automatically and the revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarding the ownership of immovable property was available such as copy of an abstract (7/12), bill of Municipal Corporation etc. A copy of said proof was enclosed. The assessee conveyed its agreement for attachment of the said property and adding the Department's name in the above said documents on the basis of the details given. The Assessing Officer was also requested for any further information and/or requirements necessary. In another letter of the same date viz. 8-2-1994, the assessee offered equitable mortgage of immovable property covering the amount of Rs. 2 lakhs (to the extent of outstanding liability) and requested him to give it the draft agreement for equitable mortgage and/or allow to execute the equitable mortagage as per the general rules and regulations. On 11-2-1994, the assessee forwarded to the Assessing Officer four pass books of Public Provident Fund Scheme of four co-parceners of the HUF wherein the outstanding balance amounted to Rs. 2,23,092. In the said letter dated 11-2-1994 the Assessing Officer was requested to accept the same as a security in respect of the demand stayed by the Tribunal. The Assessing Officer was asked to intimate the concerned bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trar by his letter dated 29-3-1994 requested the assessee to furnish the following documents immediately : "1.A proof in token of having paid Rs 1,65,920 to the Assessing Officer. 2. Copies of documents furnished as security to the satisfaction of the Assessing Officer for the demand stayed and a copy of the letter of compliance/acceptance of the ITO." The assessee by its letter dated 1-4-1994 / 6-4-1994 acknowledged the Assistant Registrar's letter dated 29-3-1994 and enclosed the letter dated 5-4-1994 received from the Assessing Officer in the matter of security given by the assessee as well as the amount of outstanding demand at Rs. 2,13,988 for the assessment years 1979-80 to 1987-88 reconciled with the Department's records up to 31-3-1994. 7. After the receipt of the assessee's letter dated 1-4-1994/6-4-1994, the Assistant Registrar put up a note on 13-4-1994 for the consideration of the Bench. On the said note, the learned Judicial Member wrote as under : "27-4-1994. This Tribunal cannot enter into correspondence with the assessee even through the Assistant Registrar. The petitioner-assessee was directed as per order on Stay Petition on 19-11-1993 to pay Rs. 1,65,920 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the stay granted by the Tribunal on 19-11-1993 automatically got vacated and became ineffective and inoperative. in para 7 of his supplementary order, the learned JM stated that in law it is neither incumbent nor necessary to pass any such separate legal order vacating or withdrawing the stay granted earlier. 9. The matter was posted for hearing before me as a Third Member on 19-4-1995, when Shri S.N. Soparkar, Advocate appeared for the assessee while the Department was represented by Shri M.S. Rai, Senior D.R. At the time of hearing, the assessee's counsel filed a paper book of 29 pages. The arguments of the learned Advocate for the assessee were to the following effect: The Tribunal in its order dated 19-11-1993 laid down the condition that the stay granted shall stand vacated automatically if the assessee takes any adjournment when the appeals are posted for hearing and disposal/deliberately delays the disposal of the appeals in any manner whatsoever. This is evident from para 5 of the Tribunal's order dated 19-11-1993. Non-fulfilment of any of the conditions in para 3 of the order of the Tribunal dated 19-11-1993 does not automatically vacated the stay. In the notices of he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not have been any proposal to vacate the stay except for soliciting the information as to payment offering of security. It was only after the receipt of the assessee's letter dated 6-4-1994, the Tribunal might have decided to withdraw the stay. Further, in para 5 of his order dated 11-5-1994 the learned J.M. stated that 'there is no risk or danger to the assessee from the Revenue authorities nor any hardship or financial difficulties will be caused to the assessee". How can he come to such conclusions without hearing the assessee on these aspects ? On 25-3-1994, the assessee was not at all asked whether there would be any risk or danger to it from the Revenue authorities or whether any hardship or financial difficulty would be caused to the assessee if the stay were to be cancelled. For the first time, the JM refers to these aspects in this order dated 11-5-1994. Finally, in para 6 of his order dated 11-5-1994, the learned J.M. withdrew and cancelled the stay granted earlier on 19-11-1993. In para 5 of his supplementary order the learned J.M. stated that "as the assessee not making any part payment nor offering satisfactory security as per law to the AO, the stay granted by us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r letters dated 4-1-1994 and 18-2-1994 addressed to the Tribunal. For the first time, in the supplementary order dated 26-8-1994 the learned J.M. stated in para 7 that it was neither incumbent nor necessary to pass any such separate legal order vacating or withdrawing the stay granted earlier. There is no opinion on this issue from the learned A.M. since he has passed his order earlier on 6-7-1994. Again, in para 5 of his supplementary order, the learned J.M. stated that the stay granted by the Tribunal on 19-11-1993 automatically got vacated and became ineffective and inoperative. Here also, there is no opinion on this issue by the learned A.M. since he has passed his order earlier on 6-7-1994. Hence, it is respectfully stated that there is no difference of opinion between the two Hon'ble Members on question Nos. 2 and 3 in the reference made under section 255(4) of the I.T. Act dated 26-8-1994. 10. The arguments of the D.R. were to the following effect : The Tribunal in its order dated 19-11-1993 directed the assessee to pay Rs. 1,65,920. It stayed the balance. That means whatever actual and effective demand was payable after the payment of Rs. 1,65,920. The Assessing Officer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Tribunal, vide its letter dated 4-1-1994 that it had been informed by the Assessing Officer vide his letter dated 3-1-1994 that the disputed demand for the assessment years 1979-80 to 1987-88 was Rs. 2,13,988 that as the disputed demand was below Rs. 5,00,000 the question of payment of Rs. 1,65,920 did not arise, that it had offered to the Assessing Officer security regarding equitable mortgages/title deeds of the property and that no specific reply had been received by it till date. The assessee also forwarded to the Tribunal a copy of the Assessing Officer's letter dated 3-1-1994. Again, by letter dated 18-2-1994, the assessee informed the Tribunal the fact of furnishing of security to the Assessing Officer in the form of four pass books of Public Provident Fund Scheme. The copy of letter dated 11-2-1994 addressed to the Assessing Officer was also enclosed along with its letter dated 18-2-1994. When such was the factual position, the Tribunal refixed the hearing of assessee's stay petition on 2 5-3-1994. According to the assessee's counsel, on 25-3 -1994 the Tribunal had asked him as to why the assessee had not made the payment of Rs. 1,65,920 and required him to produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M was satisfied only at a later date i.e. 13-4-1994 about the non-compliance of the directions of the Tribunal by the assessee. As already mentioned earlier, the learned JM has passed the order on 27-4-1994 in the note put up by the Assistant Registrar-I on 13-4-1994. This order had already been extracted above by me. Even in the said order dated 27-4-1994, the learned JM had not referred to the hearing that had taken place earlier on 25-3-1994. In such circumstances, the learned Accountant Member (for short AM) pointed out that the assessee must be given an opportunity of being heard before the Tribunal wanted to cancel the stay. The learned AM suggested for the posting of the stay petition on a Friday. This note of the learned AM is dated 29-4-1994. This also has been extracted by me above. On 11-5-1994, the learned JM has passed the order on the same note sheet after the hearing was over on 25-3-1994 and after assessee's letter dated 6-4-1994. He observed that stay was automatically vacated. He also passed an order on 11-5-1994 withdrawing and cancelling the stay. When the learned AM passed his dissenting order on 6-7-1994, the learned JM has passed a supplementary order on 26-8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the learned JM dated 26-8-1994. There was no occasion at all for the learned A.M. to express his opinion on the observation of the learned JM in his supplementary order about the automatic vacation of the stay order granted earlier. In fact, the order dated 6-7-1994 of the learned AM does not mention anything about the automatic vacation of the stay order. Hence I am of the opinion that question No. (ii) referred to me is misconceived as there was, in fact, no difference of opinion between the learned JM and AM in this regard. 14. Whether there was a legal requirement for passing a separate order revoking and cancelling the stay order was discussed by the learned JM in his supplementary order only. (Please see para 7 of the supplementary order). The learned AM has got no opportunity to express his opinion on this aspect when he passed his order on 6-7-1994. Hence it cannot be said that there was a difference of opinion between the two learned Members on this issue. Accordingly I hold that even question No. (iii) referred to me is misconceived. In fact, there did not exist any difference of opinion before the two learned members in this regard. 15. The matter will now go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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