By TIOL News Service

MUMBAI, JAN 16, 2018: THE issue is - Whether when the doings of the assessee are not found to be not above board, it still deserves invocation of the prerogative writ under Art 226 of the Constitution. NO is the verdict.

Facts of the case

The Assessee-a society and a collection of education institutes, preferred the present Writ challenging the order of the Tribunal wherein, the Assessee's stay application for recovery of demand was granted on the condition of the Assessee depositing Rs. 18 Crores in three instalments pending the disposal of the Assessee's appeals for the AY 2009-10 to 2014-15 by the Tribunal. The Tribunal had also granted a hearing on 18th January 2018 with respect to the payment of Rs.18 Crores however, the Tribunal also stated that in absence of complying with the condition of deposit, the stay would stand vacated and the appeals would be heard in the normal course and not on an expeditious basis.

On failure, the Assessee's Writ was first mentioned on 28th November 2017 seeking an ad-interim relief from the condition of deposit as ordered by the Tribunal since, they were not in a position to comply with the same. However, the Court refused to grant any ad-interim relief and the Writ was directed to be placed on board for admission. Further, on 18th December 2017, it was submitted that since there was a threat of the teaching staff of the Assessee going on strike for non-payment of its salaries, the Assessee was not in a position to comply with the conditions provided by the Tribunal. The Assessee also stated that the ongoing University examination in the Engineering courses would be affected by the strike resulting in jeopardizing the career of a large number of its students. Therefore, the Court directed the Assessee to serve a notice upon the Revenue and placed the said petition before the Board on 19th December, 2017.

Further, when the Petition was taken after notice to the Revenue, the Attorney had filed an affidavit in support of the petition dated 19th December 2017 which stated that an amount of Rs. 81 Crores was due to the teaching and other staff of the Assessee. The said affidavit also stated that although the teaching staff had gone on strike but the same had not yet affected the University's examination. Further, the Assessee failed to pay the due amount to its staff as all its bank accounts as attached u/s 226(3). It was also pointed out that an amount of Rs. 9.27 crores was due to be received from the Social Welfare Department, Pune before 22nd December 2017 out of which the Assessee was desired to pay the a sum of Rs. 8 crores to its staff in order to end their strike. Meanwhile, the Revenue informed the Assessee that the he would inform his officers not to withdraw the amount expected to be received from the Social Welfare Department in the attached bank accounts and the said Petition was grant for further admission before the Board as requested by the Assessee.

In Writ, the High Court held that,

++ at this stage, the counsel seeks two days time so as to brief a new counsel. However, we decline to grant any adjournment in view of the conduct of misrepresenting of facts by the Assessee. This conduct disentitles the Assessee from any prerogative writ under Article 226 of the Constitution being issued in its favour by our exercising our extraordinary jurisdiction;

++ the communication dated 20th December 2017 to the Tax Recovery Officer as also the communication dated 21 December 2017 of the Assessee to the Branch Manager, Punjab National Bank, misrepresent that on 19 December 2017 this Court had given oral directions. This coupled with the withdrawal of an amount of Rs. 9.18 crores from the bank accounts without any order/direction from the Court establishes an attempt to overreach the court and disentitles the Assessee to any relief;

++ it is axiomatic that the extraordinary writ jurisdiction of issuing prerogative writs would not be exercised when the Assessee's conduct is not clean. The Assessee seeking an extraordinary relief from the Court is not only expected to come with clean hands but so keep it, till the disposal of the petition. Therefore, the conduct of the Assessee during the pendency of the petition disentitles it to any relief under Article 226 of the Constitution of India. Therefore the petition was dismissed.

(See 2018-TIOL-84-HC-MUM-IT)