The Rajasthan High Court stayed the demand order and noted that the time of accrual for taxing income postpones till adjudication of dispute by the civil court. The counsel for the petitioner, Avin Chhangani submitted that the impugned penalty order and the consequential notice of demand have been passed against the present petitioner even when the civil rights regarding the property in question is under adjudication in Civil Suit No.12/2020 pending before the Civil Court, Mavli, District Udaipur.

The counsel for the petitioner in the grounds of writ petition has mentioned some of the judgments, which laid down the law, that the time of accrual for taxing income gets postponed till the dispute is adjudicated by the Civil Court. A Division Bench of Justices Munnuri Laxman and Dr Pushpendra Singh Bhati observed that “Issue notice to the respondents. Mr. Gajendra Chauhan appearing on behalf of Mr. K.K. Bissa accepts notice.

An advance copy has already been served upon him. Service is complete. In the meanwhile, effect and operation of the orders dated 21.09.2023 and 21.09.2023 shall remain stayed. The respondents shall be at liberty to file an application for vacation of the interim order.”