Pavani Structurals Private Limited; Pavani Estates; Pavani Housing & Finance v. Commissioner of Income Tax (Central) & Anr.

1. FACTS OF THE CASE

The four Pavani petitions challenged recovery notices of 28 January 2005 and related ITAT stay orders. Appeals concerning assessment and revision orders had been heard on 27 August 2004 but judgments were awaited. Earlier proceedings involved restricted stay and instalment arrangements.

Source: PDF pp.4–6

2. DISCUSSION BY THE COURT

The Court declined to resolve disputed responsibility for adjournments. It relied on the completed hearing and the departmental representative’s recorded position concerning coercive recovery. As no counter-affidavit was called for, it expressly stated that petitioners’ allegations were not deemed admitted and its observations would not prejudice Revenue.

Source: PDF pp.4–6

3. JUDICIAL DECISION

The section 226(3) notices to Union Bank of India/Bharat Overseas Bank were directed to be withdrawn, with no coercive steps until pronouncement of the ITAT judgments. Recovery thereafter could proceed according to law depending on the appeal results. All four writs were disposed of without costs.

Source: PDF pp.4–6

4. OUTCOME

Temporary recovery protection through final disposal of the writs; no cancellation of the underlying tax liabilities or decision of the pending appeals.

Source: PDF pp.4–6

5. Expert Comments

AKHB editorial analysis, distinct from the Court’s findings.

The endpoint is pronouncement, not an unlimited recovery holiday

Protection was tied to appeals already heard and awaiting judgments. The Court expressly preserved lawful recovery afterwards according to their results. The note therefore distinguishes withdrawal of the identified bank notices from deletion of the tax demand itself.

Source: PDF p.5

The order turns on its particular procedural history

Earlier restricted stay, instalment directions and departmental statements before the Tribunal informed the intervention. The Court did not declare that filing any appeal automatically stays collection. Nor did it decide the contested allegation that Revenue had sought adjournments.

Source: PDF p.5

Four dockets and the evidentiary reservation both matter

The common order covers Pavani Structurals, Pavani Estates and two Pavani Housing & Finance writs. Keeping all four dockets prevents loss of distinct proceedings. Disposal without a counter-affidavit did not establish every affidavit allegation: the Court expressly protected the respondents against that inference.

Source: PDF p.5