Samsung India had filed an application with ITAT seeking a stay of the tax demand of ₹1,213 crore, which was dismissed by ITAT on the grounds that the application was premature since no coercive action for recovery had been initiated by the assessing officers. High Court on Monday held that given the fact that demand is outstanding, the Tribunal’s reasoning that the application is premature is not sustainable.
With this, now the Delhi High Court has restored that stay application filed by Samsung India before the ITAT with directions to expeditiously decide the said application on merits. The High Court order was pronounced by Justice Vibhu Bakhru and Justice Swarna Kanta Sharma, an order copy of which is awaited.
Also Read: Excise Policy Case | Delhi HC seeks ED reply to Manish Sisodia’s plea
The tribunal had argued that Samsung had not demonstrated any immediate recovery actions initiated by tax authorities at the time of filing or hearing the application. Citing the absence of an imminent threat, the ITAT dismissed the company’s request. This prompted Samsung to escalate the matter to the Delhi High Court, which ruled in its favour, setting aside the tribunal’s decision.
Commenting on the development, Amit Maheshwari, Tax Partner, AKM Global, a tax and consulting firm said, “The Delhi High Court has allowed the writ petition filed by Samsung India against ITAT order wherein ITAT had dismissed the stay petition of Samsung India being premature as no coercive action was yet initiated by the tax department.
The Delhi HC ruled that the tax demand was outstanding in the case of Samsung and hence, ITAT should have decided the stay petition on merits rather than dismissing it on grounds of being premature. In this case, the demand was already outstanding but no coercive action had been taken as yet to recover the demand.
Many similar stay petitions are either dismissed or delayed from hearing on the ground that recovery proceedings have not yet been initiated. This is a welcome ruling as taxpayers have been facing uncertainty as their bank accounts can be attached through recovery proceedings by the tax department, anytime by giving just a few day’s notice.
So even though, the department hasn’t taken any coercive measure the fact that the demand is outstanding, taxpayers can, as a pre-emptive measure, get a stay and would not have to worry about running to the courts when the department takes action.”
