The Madras High Court has granted a breather to Vasan Healthcare, which is facing a demand of around ₹400 crore towards income tax dues. The court permitted the firm to desposit ₹35 crore in 12 equal monthly instalments after which the Commissioner of Income Tax (Appeals) would take up a statutory appeal preferred against the assessment order and dispose of it within six months. A Division Bench of Justices M.M. Sundresh and N. Anand Venkatesh heard the plea agreed with A.P. Srinivas, standing counsel for IT department, that a blanket stay could not be granted on deposit of tax dues. However, considering the financial constraints cited by the firm, they directed it to be deposit an initial amount of ₹ 35 crore in instalments and then proceed with the statutory appeal.
Initially, the CIT(A) had directed the firm to deposit 20% of the total tax demand as a pre-condition for entertaining the statutory appeal. However, when the order was challenged by way of a writ petition, a single judge of the court disposed of the case by directing the firm to deposit 5% of the total demand raised by the assessing officer and hence the present writ appeal.
During the course of arguments, the firm’s counsel contended that it was facing a severe financial crisis since all its banks accounts had been frozen though it had to regularly pay salaries to its 5,000 employees in 120 branches across the country.
