2017 PLP (Trib (PTD)

S. 131(5)

Grant of stay of recovery of tax demand by Appellate Tribunal

Principles

Stay of recovery demand by the Tribunal, could be granted, if it was proved that taxpayer was facing hardships or financial constrains

In the present case, it was not proved by the taxpayer, that the department had initiated any coercive measures for recovery of the demand

Stay could not be granted on the basis of general rule, but applicant had to prove its case

Stay could be granted if party seeking stay had a prima facie case; that in case of refusal of stay party could suffer irreparable loss and the balance of convenience or inconvenience, if the stay was not allowed

Section 131(5) of the Income Tax Ordinance, 2001, unequivocally provided that the Tribunal could stay the recovery proceedings, if the recovery proceedings caused undue hardship to the taxpayer

Applicant/taxpayer had failed to make out a case for grant of stay as no hardship was seen to have been caused to the taxpayer

Applicant/taxpayer had filed vexatious and frivolous applications and by doing so, he had not only wasted the time of the court, but also dragged unnecessarily the revenue

Taxpayer having not shown that any coercive measures were being initiated by the department, neither any notice of hardship was issued, nor any recovery proceedings were seen to have been initiated by the department against the taxpayer, application for grant of stay was rejected by the Tribunal in circumstances.

S. 131

Appeal

Powers of Appellate Tribunal

Scope

Power to grant stay, pending appeal before Tribunal

Powers of Appellate Tribunal, were of widest amplitude in dealing with appeals before it

Tribunal had the power of granting stay during the pendency of the appeal before it

Stay would be granted for a limited and specified period

No automatic stay

Mere filing of and pendency of appeal, would not operate as suspension or stay

No provision in the Income Tax Ordinance, 2001 existed that an assessment would become provisional or non-existent with the filing of an appeal against it

Mere fact of pendency of an appeal would not operate as stay of execution, nor would it affect the executability of the decision appealed against

Matter of grant of stay, no doubt was one of discretions with the Appellate Tribunal, but such power was to be exercised judicially

Primary consideration, should be "undue hardship caused to the taxpayer"

Appellate Tribunal was obliged to form opinion that the recovery of tax in question would cause undue hardship to the taxpayer.

S. 131(5)

Stay, grant of by the Tribunal

Principles

Points to be considered before grant of stay/injunction were; (a) granting of any injunction under the rule, was purely within the discretion of the court; said discretion should be exercised in favour of the party, who would come with clean hands; (b) injunction was a form of equitable relief; it was to be issued in aid of equity and justice, but not in aid of injustice; in order to obtain an interim relief, the applicant, had not only to establish that he had strong prima facie case, but also to show that the balance of convenience, was in his side and that he would suffer irreparable injury unless he was protected during the pendency of his appeal; applicant had to prove that he would be caused undue hardship, if necessary proceedings were not stayed; and (c) where no serious controversy was raised in the application for stay, mere allegation without producing any prima facie material to establish the same or pointing out circumstances to justify it, could hardly lead to the conclusion that there was a prima facie case justifying grant of injunction.