THE HON BLE SRI JUSTICE V. RAMASUBRAMANIAN AND HON BLE SMT. JUSTICE T. RAJANI WRIT PETITION Nos.6508 and 12271 of 2017 COMMON ORDER: (Per VRS,J) Kakatiya Urban Development Authority, which is statutory authority constituted in terms of Section 3 of Andhra Pradesh Urban Areas (Development) Act, 1975, has come up with these writ petitions, challenging action of respondents in taking coercive steps and recovering sum of more than Rs.14.00 crores. 2. Heard Mr. A. V. Krishna Koundinya, learned senior counsel for petitioner, and Mr. T. Vinod Kumar, learned senior standing counsel for Income Tax Department, appearing for 1st respondent. 3. For assessment years 2009-2010 to 2013-2014, petitioner was assessed and series of demands for amounts ranging from Rs.6,70,00,000/- to Rs.33,35,00,000/- was made. All these assessments are subject matter of five different appeals pending on file of Income Tax Appellate Tribunal in I.T.A.Nos.326 to 330/Hyd/2017. 4. Though appeals were filed in February, 2017 within period of limitation, garnishee orders were issued to Bank by 2 VRS,J & TR,J WP Nos.6508 & 12271 of 2017 proceedings, dated 20.02.2017. Challenging garnishee orders, dated 20.02.2017, petitioner came up with first writ petition, W.P.No.6508 of 2017. In said writ petition, this Court granted interim order to following effect: Heard Mr. A.V.Krishna Koundinya, learned senior counsel appearing for petitioner. Mr. T. Vinod Kumar, learned standing counsel for Income Tax Department (Telangana), takes notice for 1st respondent. Issue notice to respondents 2 and 3, returnable by two (2) weeks. petitioner is statutory authority created under Andhra Pradesh Urban Areas (Development) Act, 1975. By order of attachment, 1st respondent has already taken away sum of Rs.6,81,77,548/-. petitioner is not either individual or corporate assessee, but statutory authority. If bank accounts are not permitted to be operated and if entire account is drained out of funds, functioning of statutory authority will come to grinding halt. Therefore, there will be interim stay of further recovery, until next date of hearing, and petitioner is permitted to operate bank accounts. Post after two (2) weeks. 5. said order was later clarified by subsequent order, dated 22.03.2017, by Bench of this Court. order passed on 22.03.2017 reads as follows: Adjourned by two weeks. In meantime, it is clarified that Appellate Authority is free to pass orders on stay application. 6. Pursuant to second order, Tribunal took up applications for stay and passed order on 30.03.2017. operative portion of said order reads as follows: We have carefully considered rival contentions and perused record. On conspectus of matter, we are of view that it is fit case for granting conditional stay. Since all appeals are already posted for hearing on 13.06.2017, 3 VRS,J & TR,J WP Nos.6508 & 12271 of 2017 we hereby direct assessee to pay sum of Rs.8 crores, for all years under consideration, on or before 31st March, 2017 and subject to payment thereon balance outstanding demand is stayed. Assessee shall not seek any adjournment on date fixed for hearing. Learned counsel for assessee submitted that order of Commissioner (Exemptions) having been served upon assesee on 28.03.2017 it has to file appeals against that order and same has to be clubbed along with present appeals and at least on account of that factor it may take some time, as Act stipulates two months time to file appeals and to prosecute matters. No doubt, Law permits time to file appeals within 02 months but we only advise assessee to file appeals at earliest so that same can be clubbed along with present appeals and can be taken up together. However, if there are genuine reasons for seeking adjournment, Bench can take decision to extend stay already granted. With these observations, stay applications filed by assessee are treated as partly allowed. 7. Immediately after pronouncement of order on 30.03.2017, Assistant Commissioner of Income Tax wrote letter to Bank on very same day, directing Bank to remit sum of Rs.8.00 crores. Challenging said communication, dated 30.03.2017, petitioner came up with second writ petition, W.P.No.12271 of 2017. 8. grievance of petitioner in both these writ petitions is that before taking coercive action, respondents did not follow procedure prescribed by law and did not also grant breather. Admittedly, appeals were filed within period of limitation. grievance of petitioner is that even before orders could be passed on petitions for stay, garnishee notice was issued first and then conditional order of stay was granted by Tribunal. 4 VRS,J & TR,J WP Nos.6508 & 12271 of 2017 garnishee order was effected to extent of condition imposed by Tribunal in stay petitions. 9. As we have pointed our earlier, first writ petition challenges proceedings of Assistant Commissioner, dated 20.02.2017, by which Bank was directed to remit sum of Rs.54,72,00,000/-. By time petitioner came up before this Court, sum of Rs.6,81,00,000/- had already been recovered by Department. Therefore, by interim stay granted on 23.02.2017, we directed further recovery to be put on hold. Though we modified said order permitting Tribunal to dispose of stay petitions, stay of further recovery was not lifted. 10. In view of liberty granted by this Court, Tribunal disposed of stay petitions granting time to petitioner up to 31.03.2017 to make payment of Rs.8.00 crores. From order of Tribunal, it is not clear whether Tribunal took note of recovery already made to extent of Rs.6,81,00,000/-, to come to conclusion that Rs.8.00 crores should be paid by petitioner for grant of stay. In any case, Tribunal granted time up to 31.03.2017 for petitioner to comply with conditional order. 11. Therefore, any letter that ITO wanted to issue to garnishee, could have been done only after expiry of deadline, namely, 31.03.2017. Assistant Commissioner of Income Tax had no business to write letter on 30.03.2017 itself, asking Bank to 5 VRS,J & TR,J WP Nos.6508 & 12271 of 2017 remit amount of Rs.8.00 crores so as to enable petitioner to comply with conditional order. letter written by statutory authority, especially in form of garnishee notice, is coercive action. No such coercive action could have been taken, when petitioner had 24 hours more time to comply with condition. Therefore, we are of considered view that letter written on 30.03.2017 by Assistant Commissioner of Income Tax, directing Bank to remit sum of Rs.8.00 crores was completely violative of stay granted by us and conditional stay granted by Tribunal, for compliance of which, petitioner had time till 31.03.2017. 12. question that now remains is as to what should be done. According to Mr. T. Vinod Kumar, learned senior standing counsel for Department, more than Rs.86.00 crores is due under orders of assessment, which are subject matter of five different appeals before Tribunal. Therefore, learned senior standing counsel submitted that in light of arguments advanced before Tribunal, condition imposed by Tribunal to remit sum of Rs.8.00 crores should be taken to be in addition to amount of Rs.6.81 crores already recovered. 13. But unfortunately, we cannot take note of what transpired in Court, from anything other than what is reflected in proceedings before Court or Tribunal. In order passed on 30.03.2017 by Tribunal, there is no indication whether amount of Rs.8.00 6 VRS,J & TR,J WP Nos.6508 & 12271 of 2017 crores was arrived at, after taking note of amount already recovered. We cannot go on presumptions and surmises. best way of resolving this issue is to remit matter back to Tribunal to address this question. But, we do not intend to do that, in view of fact that appeals were posted to 03.10.2017 for final disposal, and order of remand to take fresh look at stay petitions, would only postpone final hearing of appeals. 14. Therefore, in light of two things, namely, (a) that letter written by Assistant Commissioner of Income Tax, dated 30.03.2017, was clearly violative of two stay orders, one passed by this Court and another passed by Tribunal, and (b) that order of Tribunal is not indicative of whether amount already recovered was taken note of for imposing condition, we are left with no alternative except to direct Department to refund amount of Rs.6.81 crores. Hence, Writ Petitions are disposed of, directing Department to refund amount of Rs.6.81 crores to petitioner. However, same shall be subject to final orders passed by Tribunal in appeals. Consequently, miscellaneous petitions if any pending in writ petitions shall stand dismissed. No order as to costs. V. RAMASUBRAMANIAN, J T. RAJANI, J. 16th August, 2017 cbs 7 VRS,J & TR,J WP Nos.6508 & 12271 of 2017 HON BLE SRI JUSTICE V. RAMASUBRAMANIAN AND HON BLE SMT. JUSTICE T. RAJANI Writ Petition Nos.6508 and 12271 of 2017 (disposed of) 16th August, 2017 cbs 8 VRS,J & TR,J WP Nos.6508 & 12271 of 2017 *THE HON BLE SRI JUSTICE V. RAMASUBRAMANIAN AND *THE HON BLE SMT. JUSTICE T. RAJANI +W.P.Nos.6508 & 12271 of 2017 % 16-08-2017 # M/s. Kakatiya Urban Development Authority, Hanamkonda, Warangal. .. Petitioner Vs. $ Assistant Commissioner of Income Tax, Warangal and others .. Respondents HEAD NOTE: ! Counsel for petitioner : Mr. A.V.Krishna Koundinya ^ Counsel for 1st respondent : Mr. T. Vinod Kumar, learned senior standing counsel for Income Tax Department ^ Counsel for 2nd respondent : Mr. B.S. Prasad ^ Counsel for 3rd respondent : None ? CASES REFERRED : 9 VRS,J & TR,J WP Nos.6508 & 12271 of 2017 Kakatiya Urban Development Authority v. Assistant Commissioner of Income-tax, Warangal and other