Raja Ram Dalmia v. Commissioner Of Income Tax, Kolkata-I & Ors

ORDER SHEETWPO/213/2013IN THE HIGH COURT AT CALCUTTACONSTITUTIONAL WRIT JURISDICTIONORIGINAL SIDE RAJA RAM DALMIA VS COMMISSIONER OF INCOME TAX, KOLKATA-I & ORS. BEFORE:The Hon'ble JUSTICE MD. NIZAMUDDINDate : 21[st] April, 2022. Appearance:Mr. Pujon Chatterjee, Adv.…For the PetitionerMs. Smita Das De, Adv.…For the respondentMs. Debjani Mitra, Adv.….for Official Liquidator The Court : In compliance of my order dated 16[th] March, 2022,Official Liquidator has filed a report through its learned advocatewhich may be kept with the records. This writ petition has been filed against the impugned twogarnishee notices dated 18[th] February, 2009 for recovery of the incometax demand in question against the petitioners who were the directorsof one M/s. Basant Udyog (P) Ltd. at the relevant period relating toassessment years 1983-84, 1984-85 and 1985-86 relating to whichthe demand in question arises and against the recovery of which theimpugned garnishee notices were issued. Petitioner has challenged theimpugned garnishee notices on the ground that at the time ofinitiation of impugned recovery proceeding and the issuance ofgarnishee notices they were no more attached to the company andhad retired in 1990 and in view of Section 179 of the Income Tax Act,1961 respondent Income Tax Authority should have taken steps only if they could not recover from the company. It is an admitted positionthat the petitioners were directors of the company during the periodrelating to which demand in question arises and garnishee noticeswere issued. In view of the report of the Official Liquidator dated 8[th]April, 2022 which has been filed in Court it appears that the companyhas already gone into liquidation on 11[th] August, 1997 and further onperusal of the aforesaid report of the Official Liquidator it appears thathe has got no fund in his hand. Since it is a Government revenuearises out of a valid assessment order which was never challengedbefore any authority, it is the bounden duty of the Income TaxAuthority concerned to take steps for recovery of the demand arisesfrom such assessment order and law empowers them to take recoverysteps against the persons who were directors at the relevant point oftime. This Court cannot shut its eyes towards ground reality thatdepartment is not in a position to recover this genuine and validGovernment revenue from the company since the same is no more inexistence. Though learned advocate appearing for the petitionercontends that no claim was lodged before the Official Liquidator inaccordance with law though learned advocate appearing for therespondent submits that claim was lodged before the OfficialLiquidator on the basis of instruction from the respondent Authorityconcerned. Without going into these disputed facts that whether claim waslodged before the Official Liquidator, admitted position today whichexists on the basis of report of the Official Liquidator is that even if therespondent Income Tax Authority wants to recover the demand from the said company, it is not in existence and has already beendissolved in March 2013 upon formal advertisement in the newspaperas stated in the report of the Official Liquidator and no fund is lyingwith it. Considering these facts, this Court cannot interfere with theimpugned recovery proceeding and garnishee notices in this writpetition and stop the respondent from realising valid Governmentrevenue from the petitioners since at present there is no option beforethem to recover this demand except from the petitioners. Considering the facts and circumstances of the case, this writpetition being WPO 213 of 2013 is dismissed. No order as to costs. TR/ (MD. NIZAMUDDIN, J.)