TMI Blog2014 (6) TMI 1042X X X X Extracts X X X X X X X X Extracts X X X X ..... h interest from the date of withdrawal, to the date of repayment, at the rate applicable in the account of the petitioner; if the account is interest bearing. The refund shall be made without looking at the result of the appeal, which is said to have been heard on 20th March, 2014, since the same is only a first appeal and substantial amounts are already recovered and allowed to be retained with the Revenue as per the interim order of this Court. This Court does not intend to go into the conduct of the individual officer, since the learned standing counsel points out that she is new to office and had only acted in anxiety to protect Revenue. This Court cannot also discount the pressure brought upon subordinate officers; when, as referred to in UTI Mutual Fund [ 2012 (3) TMI 333 - BOMBAY HIGH COURT ] the Chairman, CBDT, himself, has addressed the Chief CIT, Director Generals, etc., of the IT Department, requiring speedy recovery and consequent weightage in the normal incidence of service. This Court has to necessarily practise the judicial restrain, it preached at the beginning. Suffice it to observe that the zeal to serve the nation shall not cross the bounds of law and result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the officers of the Department did not bring to the notice of the first appellate authority that the earlier order was not complied with. Again the petitioner defaulted in complying with the order granted as revealed in Exh. P9 and on 7th Nov., 2013, paid an amount of ₹ 10 lakhs. 4. The petitioner rested contend and it is stated that the appeal was heard finally on 20th Feb., 2014. The present writ petition was filed, on 26th March, 2014, obviously, on coming to know of a garnishee order issued by the 3rd respondent to the additional 4th respondent, in whose branch the petitioner maintains an account. The writ petition came up for admission on 27th March, 2014 and an interim order was passed, keeping in abeyance further proceedings pursuant to Exh. P11; being the garnishee proceedings initiated under s. 226(3) of the IT Act, 1961. Exhibit P11 directed the additional 4th respondent to draw a demand draft for an amount of ₹ 22,48,38,500, payable to the IT Department Government of India. 5. The interim order passed by this Court on 27th March, 2014 was on condition that Exhs. P5 and P9 would be complied, and in addition directing similar payments for the months of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered in the despatch register; nor was it actually sent by post or any other mode of service. 8. It was in this context that this Court examined in detail the manner in which .recovery was attempted. An encapsulated list .of dates and events, as revealed from the affidavit, was also placed on record by the learned standing counsel. From the averments in the additional affidavit filed by the petitioner, the affidavit filed by the additional 4th respondent as also the 3rd respondent what comes to fore is this. Admittedly the petitioner did not comply with Exhs. P5 and P9 orders passed by the first appellate authority; nor were any proceedings taken to challenge the same. According to the 3rd respondent, in the month of November, 2013 the AO submitted a status report regarding the dues from the petitioner and on 29th Nov., 2013. the AO was required to initiate recovery proceedings immediately, by the CIT. On 4th Dec, 2013, the AO issued Exh. R3(B) notice to the petitioner, which was responded to, seeking deferment of the instalments, by a letter dt. 17th Dec, 2013. More than three months thereafter, on 25th March, 2014 the AO served Exhs. R4(a) and R4(b), both dt. 25th March, 2014, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rust to be an association of persons (AoP); and finding the petitioner to be a member, who is jointly and severally liable. The assessment made as an AOP was appealed against by the trust, and the demand was sought to be stayed by an application before the AO; the latter of which was ordered, directing payment of 50 per cent. The petitioner moved the AO as also the CIT, for stay. The AO rejected the stay application on 9th March, 2012 and took proceedings under s. 226(3) on 12th March, 2012 calling upon the petitioner's bankers to pay up ₹ 26.70 crores. The Division Bench refused to go into the merits of the demand, but it was of the view that on facts the Revenue had made an unfortunate and hasty attempt to recover money, from the petitioner; due on the demand made against the trust, without affording a reasonable opportunity. The Revenue was restrained from taking action pending appeal and for a period of six weeks of disposal of the appeal. The notice of attachment made under s. 226(3) was also set at naught. 12. Director of IT (Exemption) (supra) was a challenge by the Revenue against an order of the Tribunal, directing refund of ₹ 159 crores, recovered under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gain filed a writ appeal from the writ petition which was dismissed earlier, and got a stay of the demand for the year 2005-06. That, however, is a matter concerning the asst. yr. 2005-06 and would have to be raised appropriately in the relevant proceedings. Here we are concerned with the asst. yr. 2006-07 and the garnishee proceedings initiated thereon. 14. Allegations and counter allegations are made by the 3rd respondent and additional 4th respondent, into which this Court would not go into, at this stage. What is to be emphasized is, that a recovery, which had been lying dormant from June, 2013 was revived just prior to the close of the financial year and recovery effected of the entire amounts demanded under the assessment order. A conditional order passed by the CIT(A) in August, 2013 was not complied with and the same was not reported to the appellate authority when the same was reviewed in October, 2013 or action taken. The further conditional order was also not complied with and no action thereon was taken for recovery. The CIT(A) is said to have directed the AO to expedite the recovery proceedings in November, 2013. The AO issued a letter to the petitioner, which was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er s. 226(3)(iii). This Court is inclined to find that the provision definitely mandates that notice should be forwarded to the assessee and though a hearing is not contemplated, the specific provision cannot be treated as dead-letter. It is intended, at least, to alert the assessee so as to bring to the notice of the recovery officer any anomalies in making such demand and also to avail of the statutory remedies available to the assessee and for arranging its affairs to deal with the contingency of the bank accounts being frozen and debited off the amounts; against the demand. Herein there were two conditional orders of stay in the first appeal and the assessee would have been persuaded to comply with the condition, on notice under s. 226(3)(iii). 18. It is as against this mandate, that the 3rd respondent in para 11 of her affidavit, contends that the additional 4th respondent-bank, on service of the garnishee order on 25th March, 2014 made attempts to delay enforcement and communicated the attachment to the petitioner herein, prompting the officers of the petitioner to meet the CIT with a request to withdraw the garnishee order. Hence, it is clear that the intention of the 3rd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra). Apposite are the guidelines laid down by the Division Bench of the Bombay High Court, which are as hereunder : 1. No recovery of tax should be made pending (a) expiry of the time-limit for filing an appeal; (b) disposal of a stay application, if any, moved by the assessee and for a reasonable period thereafter to enable the assessee to move a higher forum, if so advised. Coercive steps may, however, be adopted where the authority has reason to believe that the assessee may defeat the demand, in which case brief reasons may be indicated; 2. The stay application, if any, moved by the assessee should be disposed of after hearing the assessee and bearing in mind the guidelines in KEC International Ltd. v. B.R. Balakrishnan (2001) 170 CTR (Bom) 415: (2001) 251 ITR 158 (Bom); 3. If the AO has taken a view contrary to what has been held in the preceding previous years without there being a material change in facts or law that is a relevant consideration in deciding the application for stay: 4. When a bank account has been attached, before withdrawing the amount, reasonable prior notice should be furnished to the assessee to enable the assessee to make a representa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded could have been kept in abeyance, especially when the assessee had informed both the 3rd respondent as also her superior officer that the assessee is intending to move this Court. 23. It would have been, in the fitness of things, for the 3rd respondent to have contacted the standing counsel for Government of India (Taxes) whose office is maintained in the High Court building; only for the purpose of conducting litigation, on behalf of the Department; before the High Court. Evidently the attempt was to pre-empt any orders issued in a . writ petition. This Court is not unaware of the acute, but unjustified, consternation harboured by, at least certain authorities, when superior Courts interdict their professedly legal methods of recovery. Such consternation is not justified in the context of the constitutional scheme under which the executive and the judiciary functions; which scheme reflects the anxiety of the framers to protect individual rights over arbitrary action of the State. The State's power to make laws, implement them and interpret it have been with definite design conferred separately. The authorities would do well to imbibe the spirit of the observation in Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity on the 25th of March, 2014, apparently due to the close of the financial year. There is an appalling haste shown by the recovery officers of the Revenue Department, both of the Union and the State, to hastily attempt conclusion of recovery before the close of the year, not necessarily in the interest of the State; but more in the interest of achieving targets for personal aggrandizement. However, such goals of fulling targets shall not be the consideration of a quasi-judicial authority. The word judicious means in simple terms good judgment. It's synonyms are - reasonable, sober, sagacious, considered and so on and so forth. The antonym, as revealed from the dictionaries, are imprudent, silly, unreasonable, etc. Any judicial or quasi-judicial action should be proceeded with or done with good judgment and good sense. 27. Taxation is the prerogative of the legislature and Courts fight shy of interfering with that immunity subject only to Art. 265 of the Constitution of India. The legislature, in its innate wisdom, has provided for checks and balances in effectuating levy and collection of tax. This earmarks the concern of the legislature, Parliament herein, in providing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted without deliberation or due cause and the unavoidable consequence is a direction for the refund of amounts withdrawn under s. 226(3), after deducting ₹ 4 crores, as stipulated in the conditional order passed by this Court on 27th March, 2014. The refund shall be made within a period of two weeks with interest from the date of withdrawal, to the date of repayment, at the rate applicable in the account of the petitioner; if the account is interest bearing. The refund shall be made without looking at the result of the appeal, which is said to have been heard on 20th March, 2014, since the same is only a first appeal and substantial amounts are already recovered and allowed to be retained with the Revenue as per the interim order of this Court. 31. This Court does not intend to go into the conduct of the individual officer, since the learned standing counsel points out that she is new to office and had only acted in anxiety to protect Revenue. This Court cannot also discount the pressure brought upon subordinate officers; when, as referred to in UTI Mutual Fund (supra), the Chairman, CBDT, himself, has addressed the Chief CIT, Director Generals, etc., of the IT Department ..... X X X X Extracts X X X X X X X X Extracts X X X X
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