SUSANTA KUMAR NAYAK Vs. UNION OF INDIA

JUDGEMENT

(1.) Having heard Dr. Chakraborty for the petitioner and Mr. Moitra for the income-tax authorities, it appears that the petitioner has come to this writ court challenging, inter alia, the impugned order passed by respondent No. 2, Income-tax Appellate Tribunal, Calcutta Bench, copy of which is annexure "G" to the writ petition. It is agreed by the learned lawyers of both sides that, upon consideration of the points of law, the matter may be disposed of and the question of granting an opportunity to file any affidavit does not arise. Looking at the impugned order, this court finds that the Income-tax Appellate Tribunal, while in seisin of the appeal, has since disposed of a petition filed by the assessee for stay of dues on the ground that the discretionary power vested in the Tribunal should not be exercised unless all the remedies available to the assessee are exhausted. The Tribunal has recorded the submissions of the departmental representative relying upon the decisions reported in Asst. Collector of Central Excise v. Dunlop India Ltd. and Empire Industries Ltd. v. Union of India urging, inter alia, that the assessee has not exhausted all the remedies available before the Department, and, therefore, the Tribunal should not exercise its discretionary power to grant stay in the above case.

(2.) The attention of this court has been drawn to Assistant Collector o) Central Excise v. Dunlop India Ltd. It has been found that normally, the High Court should not, as a rule, in proceedings under Article 226 of the Constitution, grant any stay of recovery of tax save under very exceptional circumstances. The grant of stay, in such matters, should be an exception and not a rule. A levy or impost does not become bad as soon as the writ petition is instituted in order to assail the validity of the levy as bad at the very threshold of the proceedings. The only consideration at that juncture is to ensure that no prejudice is occasioned to the taxpayers in case they ultimately succeed at the conclusion of the proceedings. This object can be attained by requiring the body or the authority levying the impost to give an undertaking to refund or adjust against future dues, the levy of tax or rate or part thereof, as the case may be, in the event of the entire levy or 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. On the other hand, the court cannot be unmindful of the need to protect the authority levying the tax, and, at that stage, the court has to proceed on the hypothesis that the challenge may or may not succeed. This principle of law is not in doubt or in dispute. Every court and/or every statutory authority vested with the discretionary power has to exercise the same judicially. Law is made clear that no exercise of discretion can be made whimsically or arbitrarily. The authority is vested with the power to exercise discretion either in favour of the assessee or against the assessee but the authority cannot say that it shall not exercise the discretion as the assessee has other alternative remedies. It is an aspect not to exercise discretion while finding that there is an alternative remedy. The aforesaid decision does not indicate such a proposition at all.

(3.) The attention of this court is further drawn to another decision in Empire Industries Ltd. v. Union of India. In particular, the attention of this court is drawn to the concluding portion of the decision where it has been observed that a good deal of arguments were canvassed before us for variation or vacation of the interim orders passed in these cases. Different courts sometimes pass different interim orders as the courts think fit. It is a matter of common knowledge that the interim orders passed by particular courts on certain considerations are not precedents for other cases which may be on similar facts. An argument is being built up nowadays that once an interim order has been passed by this court on certain facts specially in fiscal matters, in subsequent matters on more or less similar facts, there should not be a different order passed nor should there be any variation in all kinds of interim orders passed. It is submitted at the Bar that such variation creates discrimination. This is an unfortunate approach. Every Bench hearing a matter on the facts and circumstances of each case should have the right to grant interim orders on such terms as it considers fit and proper and if it had granted the interim order at one stage, it should have the right to vary or alter such interim orders.