The Income-Tax Appellate Tribunal (ITAT) has directed the IT department to refund the amount it has recovered from Mumbai-based brewing company, Skol Breweries.
Rs 2.68 crore was recovered from Skol while an interim stay order passed by ITAT was in operation. ITAT, the quasi-judicial body for settling tax disputes, determined that IT department’s action was beyond its jurisdiction. The extraordinary order was approved by vice-president of ITAT, G E Veerabhadrappa, and its judicial member, Madhavi Devi.
As per case facts, on March 27, 2007, Skol Brewery requested the Tribunal, by moving an emergency stay petition, to intervene as the department had attached all its bank accounts after the I-T Commissioner rejected its stay petition.
The emergency petition was scheduled for hearing before the ITAT on March 27. After examining documents, the Tribunal asked the department not to implement recovery of the disputed tax dues till March 30.
On March 30, Skol’s counsel told ITAT that despite the stay order, the department has recovered the disputed dues from Skol Brewery. Then, ITAT looked for assessing officer explanations who recovered the money. The assessing officer told ITAT, on April 2, he was willing to refund the amount to Skol Breweries if so directed by ITAT. He pleaded that he did not want to enter into any contempt of its order.
Next day, cheque drawn in favor of Skol Brewery was presented to the Tribunal by the assessing officer, the I-T Commissioner and the department representative. They also pleaded to drop the case since the recovery was made with a good intention of recovering the outstanding tax arrears. The counsel for the assessee also stated that he did not want to prolong the issue any further and offered his support for an early disposal of the case.
Later on, the ITAT granted an “absolute stay” to Skol Brewery for 180 days or till the disposal of the appeal, whichever is earlier.