CIT vs. Maruti Suzuki (India) Ltd.; 362 ITR 215 (Guj):
In an appeal by the assessee before the Tribunal for the A. Y. 2007-08, the Tribunal granted stay of recovery by an order dated 09-12-2011 which was extended by an order dated 15-06-2012. Thereafter, by an order dated 04-10- 2013, the Tribunal extended the stay by 180 days or till the disposal of the appeal whichever occurred first. The order recorded that after 15-06-2012, the case was listed thrice for hearing on 03-07-2012, 13-08-2012 and 08-09- 2012, but adjournments were taken by the Departmental representative. The Commissioner filed a writ petition and challenged the order of the Tribunal on the ground that the Tribunal did not have power to grant stay beyond the period of 365 days. The Delhi High Court held as under:
“i) I n view of the third proviso to section 254(2A) of the Income-tax Act, 1961, the Tribunal cannot extend stay of recovery of tax beyond the period of 365 days from the date of the first order of stay.
ii) T he provision will ensure that the Tribunal will try and dispose of appeals within 365 days of the grant of stay order. If the default and delay is due to lapse on the part of the Revenue, the Tribunal is at liberty to conclude the hearing and decide the appeal, if there is likelihood that the third proviso to section 254(2A) would come into operation. The third proviso to section 254(2A) does not prohibit the Revenue or Departmental Representative from making a statement that they would not take coercive steps to recover the demand. It would be appropriate and necessary for the Officers of the Revenue to examine and in appropriate cases make a statement before the Tribunal that no coercive steps would be taken to recover the demand as the delay was attributable to their fault and lapse. On such statement being made, it will be open to the Tribunal to adjourn the matter at the Request of the Revenue. Section 254(2A) does not prohibit the Revenue from not enforcing the demand, even when there is no stay of the challenged demand.
iii) T he provision does not prohibit an assessee from approaching the High Court by way of a writ petition for continuation, extention or grant of stay. The powers of the High Court under Articles 226 and 227 form part and parcel of the basic structure of the Constitution and cannot be nullified. An assessee can file a writ petition in the High Court asking for stay and the High Court has power and jurisdiction to grant stay and issue directions to the Tribunal as may be required. Section 254(2A) does not prohibit the High Court from issuing appropriate directions, including granting stay of recovery. Thus, the High Court in appropriate matters can grant or extend stay even when the Tribunal has not been able to dispose of an appeal within 365 days from the date of grant of the initial stay.
iv) If the appeal filed by the assessee has not been disposed of, it should be disposed of expeditiously and preferably within a period of two months. The demand shall remain stayed during the period in case the appeal has not yet been disposed off. However, in case the appeals were not disposed of within said period, it would be open to the assessee to file writ petition in the High Court for grant of stay of the demand. It will be also open to the Tribunal to proceed in accordance with law.”
