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TMI Blog1971 (4) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... ny Ltd. on the other, inter alia, were that a sum of Rs. 35,000 should be paid as advance and the balance against the arrival of invoices ; a stipulated time of delivery was prescribed and that erection should be carried out by Messrs. Textool Company Ltd. free of cost. We are not extracting or referring to the other terms of the contract as they are not relevant. It is common ground that Messrs. Textool Company Ltd. supplied certain machinery which is characterised by the petitioner as five ring frames. The further case of the petitioner is that, thereafter, Messrs. Textool Company Ltd, did not supply further machinery under the contract nor the spare parts annexed to such a supply and did not erect the frames as contemplated under the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efects and we learn that they will shortly be sending their technicians to set right the matter so as to enable us to commission the frames. Until then, we are sorry that we may not be able to pay them anything. Till the defects are set right, they cannot demand any money for the supply. We shall certainly arrange to pay the amount to you on their account when the company becomes entitled to claim the same from us." Here, the petitioner's case is that it is true that a large sum or at any rate the sum demanded was due to Messrs. Textools. But, they negatived their responsibility to pay the sum claimed by the revenue on the ground, that though it was debited in praesenti it has to be solved in futuro due to certain defects in the supply and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This is a case in which the revenue has raised a demand against the petitioner who is undoubtedly in the position of a garnishee as populary, understood. But the petitioner's case is that as at present no amount is due and payable by the petitioner to Messrs. Textools and as the liability is denied no process can be issued by the Income-tax Officer under the provisions of section 226 of the Income-tax Act or under any other provision thereunder. Their case is that they have rejected the goods and, though the affidavit glibly says that the amount was payable by the petitioner to Messrs. Textools, yet, in reality, no such amount is payable either under the contract or otherwise. That is a matter which has to be investigated. We, exercising j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he falsity or otherwise of such particulars made available before him. In those circumstances and as we are not inclined in our discretion to engage ourselves in such an enquiry for discovery, we refrain from making the rule absolute but would give a direction instead so that the matter may be readverted to by the Income-tax Officer in the correct perspective as required by law. We direct the Income-tax Officer to hear both the petitioner and the assessee and consider all the materials placed by the petitioner in particular and discover whether any or all of the statements made by the petitioner before the Income-tax Officer is or are false in any material particulars. If he discovers in the way indicated, then, he shall proceed under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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