Law:

Section:

Section 220 of the Income-tax Act 1961 - Collection and recovery of tax - When tax payable and when assessee deemed in default - Assessment years 2001-02 to 2005-06 Where assessee, a public sector company having huge resources, applied for stay of recovery while appeal was pending against assessment, rejection of application for stay of recovery of tax without giving any reason was not justified [In favour of assessee] The assessee State Government Transport Corporation had filed appeal against the assessment order and also applied for stay of the recovery proceedings started by the revenue authorities. Such request was rejected without assigning any reason. The respondents resorted to coercive recovery proceedings by attaching the bank accounts, which affected the day-to-day affairs of the Transport Corporation and, hence, these writ petitions. Held that, no reason was stated for rejecting the stay of collection of tax. The fourth respondent had only stated that mere filing an appeal against the assessment order would not be sufficient reason to stay the recovery of demand. When the petitioner approached the authority for the grant of stay and it was the duty of the authority to give reason either for granting stay or for refusal to grant the stay and without assigning any reason, the authorities should not have passed the order rejecting the request of the petitioner for stay. Admittedly, the appeals were pending and the petitioner was a public sector undertaking owned by the Government of Tamil Nadu and was having huge immovable properties and movable properties such as transport buses. Under these circumstances, the fourth respondent, ought to have considered the request of the petitioner for the stay of the recovery proceedings. Accordingly, the respondent was directed to consider the request of the assessee for the grant of stay and pass a speaking order. R. Krishnamoorthy and Balachandran for the Petitioner. R. Sathiamoorthy for the Respondent. JUDGMENT R.S. Ramanathan, J. - Heard both sides. 2. The petitioner, in both the writ petitions, is the State Government Transport Corporation and aggrieved by the assessment orders framed by the fourth and fifth…

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