TMI Blog1995 (7) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... rther ordered that the balance demand of Rs. 12 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 (A.R.) 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 1983-84 and 1985-86 was to the tune of Rs. 9,22,302. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iting letters that its demand for the two years was to the tune of Rs. 9,22,302. The Assessing Officer to whom direction was issued by us for collecting the sum of Rs. 2,98,395 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 6-4-1994 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 is likely to be caused to the assessee as is evident from the letter of the Assessing Officer dated 6-4-1994 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 withdraw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rongly of the opinion 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 authorised 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 C.B. 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 CB. Gautam's 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of provident fund account be construed as a sufficient, adequate or satisfactory security in the eyes of law when as per the provisions of section 6 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 injunction 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 ,aid 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 afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the Hon'ble 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 right mould and they cannot be put in 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 A.M. 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 A.M. 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. THIRD MEMBER ORDER Per Satyanarayana, Vice President--- This matter came before me as a Third Member to express my opinion on the following questions : (i) Whether, on the facts and in the circumstances of the case a hearing is required to be given as per law to the petitioner/ ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... automatically and the revenue authorities will be at liberty to proceed against the assessee/petitioner for collection/recovery of the balance amount due and payable then by the assessee/petitioner. Ordered accordingly." 4. Thereafter, the assessee wrote a letter dated 6-12-1993 to the Assessing Officer (A.O. for short) informing him the Tribunal's order dated 19-11-1993 served on 4-12-1993. The assessee requested the Assessing Officer to give it the exact amount of outstanding demand as the Assessing Officer adjusted certain amounts from fixed deposits/refunds of subsequent years. The Assessing Officer was also requested to inform his requirement as to the security to be offered as per the directions of the Tribunal. The assessee further requested the Assessing Officer to expedite the matter and give a specific reply within 10 days. The assessee has filed another letter dated 9-12-1993 in the office of the Assessing Officer. In response to the assessee's letter dated 9-12-1993, the Assessing Officer intimated the assessee that the outstanding demand as per his records up to 31-12-1993 after taking into account the payments made by it was Rs. 9,22,302 as under : Assessment Ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal on 25-3-1994 was recorded in the order sheet vide entry No. 8 dated 25-3-1994. Vide order sheet entry No. 9 dated 25-3-1994, the following was recorded under the signatures of both the members :--- "No immediate further order is required to be passed in view of assessee's letter dated 23-2-1994. A.R.I. is directed to address a letter to the assessee for proof of compliance of conditions imposed in stay order. Further order after reply from assessee." 6. In pursuance to the directions given by the Bench on 25-3-1994 by the above order sheet entry, the Asstt. Registrar 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. 2,98,395 to the Assessing Officer. 2. Copies or documents furnished as security to the satisfaction of the Assessing Officer for the demand staved 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 6-4-1994 received from the Assessing Officer in the matter of security given by the assessee as well as the amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter is fixed for bearing in the court and the parties are given an opportunity to make their submissions in relation to the proposed cancellation of the stay. The learned JM passed a supplementary order on 26-8-1994. in that supplementary order he held that the Tribunal had heard the applicant on 25-3-1994 on his letter dated 23-2-1994 and after hearing and making enquiries through the Registry about the non-compliance by the applicant of the Tribunal's directions in the stay order. In para 5 of his supplementary order the learned JM stated that 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 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 24 pages. The arguments of the learned Advocate for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer by letter dated 6-4-1994 stated that the arrear demand reconciled up to 31-12-1993 and outstanding demand for assessment years 1983-84 and 1985-86 was to the tune of Rs. 9,22,302. The Assessing Officer's said letter dated 6-4-1994 can be seen at Page 23 of the paper book filed. In it it was clearly stated that the final demand for the assessment years 1979-80 to 1987-88 was outstanding to the extent of Rs. 9,22,302 and the same relates to the assessment years 1983-84 and 1985-86 of Rs. 1,71,420 and Rs. 7,50,882 respectively. On 25-3-1994 there could not have been any proposal to vacate the stay except for soliciting the information as to payment and 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 JM stated that "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". 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the supplementary order, the learned JM stated that when the "assessee was heard on 25-3-1994 wherein it was noticed that the assessee has failed to obey and comply with our directions given in the stay order of 19-11-1993 ". This is factually incorrect. He fully ignored the assessee's earlier letter dated 4-1-1994 addressed to the Tribunal. For the first time, in the supplementary order dated 26-8-1994 the learned JM 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 AM since he has passed his order earlier on 6-7-1994. Again, in para 5 of his supplementary order, the learned JM 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 AM 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 argume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stand vacated automatically if the assessee takes any adjournment when the appeals are posted for hearing and disposal and if the assessee deliberately delays the disposal of the appeals in any manner whatsoever. In pursuance of the order of the Tribunal, the assessee submitted before 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.9,22,302; that as the disputed demand was below Rs. 12,00,000, the question of payment of Rs.2,98,395 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. When such was the factual position, the Tribunal refixed the hearing of assessee's stay petition on 25-3-1994. 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. 2,98,395 and required him to produce the proof regarding furnishing of securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 has already been extracted above by me. Even in the said order dated 27-4-1994, the learned JM has 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 put 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 26-8-1994. This supplementary order of learned JM dated 26-8-1994 was passed apparently by the learned JM to strengthen his earlier order dated 11-5-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lementary 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 between the two learned members in this regard. 15. The matter will now go before the regular Bench for decision according to majority opinion. ORDER Per Jordan Kachchap, (JM) --- In view of the order of Third Member dated 27t ..... 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