Wa/1643/2021 Of The Deputy Director Of Income Tax (Inv) v. Ms.sigapi Muthiah

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 10.08.2021CORAM :THE HON'BLE MR. JUSTICE T.S. SIVAGNANAMAND THE HON'BLE MR. JUSTICE SATHI KUMAR SUKUMARA KURUPW.A.Nos.1643, 1644 & 1647 of 2021andC.M.P.Nos.10364, 10324 & 10368 of 2021The Deputy Director of Income Tax (Inv),Unit 4(2), Chennai,Room No.125, New Building (First Floor),New No.46, Old No.108,Nungambakkam High Road,Chennai – 600 034.... Appellant/1[st] Respondent in all the appealsVs. 1.Ms.Sigapi Muthiah, Represented by her Power Agent, Mr.M.A.M.R.Muthiah, Chettinad House, Rajah Annamalaipuram, Chennai – 600 028. ...1[st] Respondent/Petitioner in W.A.No.1643 of 2021 2.M/s.Indian Bank, Represented by its Branch Manager, Thousand Lights Branch, Chennai. ...2nd Respondent/2[nd] Respondentin W.A.No.1643 of 20211.Ms.Sigapi Muthiah, Represented by her Power Agent, Mr.M.A.M.R.Muthiah, Chettinad House, Rajah Annamalaipuram, Chennai – 600 028. ...1[st] Respondent /Petitioner2.M/s.State Bank of India, Represented by its Branch Manager, Gopalapuram Branch, Chennai. ... 2[nd] Respondent/2[nd] Respondentin W.A.No.1644 of 2021 1.Ms.MeyyammaiMuthiah, Represented by her Power Agent, Mr.M.A.M.R.Muthiah, Chettinad House, Rajah Annamalaipuram, Chennai – 600 028. ...1[st] Respondent/Petitioner2.M/s.State Bank of India, Represented by its Branch Manager, Gopalapuram Branch, Chennai. ... 2[nd] Respondent/2[nd] Respondent inW.A.No.1647 of 2021 Prayer : Writ Appeals in W.A.Nos.1643, 1644 & 1647 of 2021 filedunder Clause 15 of the Letters Patent to set aside the order,dated 09.04.2021, passed in W.M.P.Nos.9469, 9452 & 9423 of 2021in W.P.Nos.8927, 8893 & 8869 of 2021 respectively. Common Prayer in W.P.Nos.8927, 8893 and 8869 of 2021: Calling for the records on the file of the 1st respondentof F.No.132(9B)/ Chettinad/ U-4(2)/ 2020-21 in issuing thewarrant for attachment of properties under Section 132(9B) ofthe Income Tax Act 1961 dated 22.03.2021 and quash the same asillegal, arbitrary and devoid of merit. Common Prayer in WMP No.9469, 9452 and 9423 of 2021: To direct the 1st respondent to lift the attachment noticespursuant to the warrant for attachment of the properties underSection 132(9B) of the Income Tax Act 1961 by the 1strespondent in F.No.132(9B)/ Chettinad/ U-4(2)/ 2020-21 dated22.03.2021 to the bankers of the petitioner namely the 2ndrespondent pending the disposal of the writ petition. For Appellant : Mr.R.Sankara Narayanan Additional Solicitor General and Mr.A.P.Srinivas Senior Standing Counsel in all the appealsFor R1: Mr.A.L.Somiyaji Senior Counsel for Mr.R.Sivaraman in all the appeals C O M M O N J U D G M E N T (Judgment was delivered by T.S. SIVAGNANAM, J.) Heard Mr.R.Sankara Narayanan, learned Additional SolicitorGeneral appearing for Mr.A.P.Srinivas, learned Senior StandingCounsel for the appellant, and Mr.A.L.Somiyaji, learned SeniorCounsel appearing for Mr.R.Sivaraman, learned counsel for the 1[st]respondent. 2.These Writ Appeals have been preferred by the Revenue,challenging the correctness of an interim order granted inW.P.Nos.8441, 8451, 8447, 8869, 8893, 8927 & 8952 of 2021 andW.M.P.Nos.8991, 8992, 8994, 9001, 9002, 9006, 9007, 9421 to9423, 9449, 9450, 9452, 9467 to 9469, 9480 & 9481 of 2021, dated09.04.2021. C O M M O N J U D G M E N T (Judgment was delivered by T.S. SIVAGNANAM, J.) Heard Mr.R.Sankara Narayanan, learned Additional SolicitorGeneral appearing for Mr.A.P.Srinivas, learned Senior StandingCounsel for the appellant, and Mr.A.L.Somiyaji, learned SeniorCounsel appearing for Mr.R.Sivaraman, learned counsel for the 1[st]respondent. 2.These Writ Appeals have been preferred by the Revenue,challenging the correctness of an interim order granted inW.P.Nos.8441, 8451, 8447, 8869, 8893, 8927 & 8952 of 2021 andW.M.P.Nos.8991, 8992, 8994, 9001, 9002, 9006, 9007, 9421 to9423, 9449, 9450, 9452, 9467 to 9469, 9480 & 9481 of 2021, dated09.04.2021. 3.We find from the said order, the writ petitions are stillpending and the request made by the Revenue for granting timefor filing counter affidavit was acceded to by the learnedSingle Bench and the matter was directed to be listed on02.06.2021. The orders which are impugned in the writ petitionsare orders of attachment of properties under Section 132(9B) ofthe Income Tax Act, 1961 ("the Act" for brevity). The interimorder enures in favour of the two writ petitioners, who havefiled three writ petitions, viz., W.P.Nos.8927, 8893 and 8869 of2021. The learned Single Bench, on perusal of the records whichwere called for from the Department, has recorded a finding thatthe provisional attachment of the property envisaged underSection 132(9B) is of property 'belonging to the assessee' andthat the two writ petitioners have not been subjected to searchand seizure under Section 132 of the Act, and therefore, heldthat there is no justification for provisional attachment oftheir assets. 4.The argument of the learned Additional Solicitor Generalis that the appellant/Revenue/Department was not grantedreasonable opportunity to put forth the facts in the form ofcounter affidavit, and to support such a submission, the learnedcounsel has referred to the order passed by the learned SingleBench, dated 01.04.2021. It is submitted that, on the saiddate, the learned Standing Counsel for the Revenue acceptednotice and sought time to obtain instructions and file counter.Though such was the request made by the Department, the Hon'bleCourt directed the production of records, as it was inclined toperuse the records. Therefore, the case was directed to belistedon08.04.2021immediatelyafteradmission.Counter/written instructions were to be filed by the Department by then with advance copies served on the counsel for therespondents/writ petitioners. In the same order, the Courtdirected the counsel for the respondents/writ petitioners toserve a copy of the writ petitions and its annexures upon thelearned counsel for the Department. The order reads as follows : “W.P.Nos.8441, 8451 and 8447 of 2021andWMP. Nos.8991, 8992, 8994, 9001,9002, 9006 and 9007 of 2021 Mr.A.P.Srinivas learned Senior Standing Counselaccepts notice for the respondents and seeks some timeto obtain instructions and file a counter. 2.Let records be produced as the Court isinclined to peruse the reasons on the basis of whichthe impugned orders under Section 132(9B) of theIncome Tax Act, 1961 have been passed. 3.List on 08.04.2021 immediately after admission.Counter/written instructions by then with an advancecopy served upon the petitioner. Learned counsel forthe petitioner is directed to serve a copy of the WritPetitions and its annexures upon the learned counselfor the respondents.” 5.As directed, the case was listed on 08.04.2021 and theCourt has passed the following order : “W.P.Nos.8441, 8451 and 8447 of 2021andWMP. Nos.8991, 8992, 8994, 9001, 9002, 9006 and 9007 of 2021 Mr.A.P.Srinivas learned Senior Standing Counselseeks a few days for production of records as directedon 01.04.2021, since he states that the concernedofficer has returned from election duty onlyyesterday. 3.List on 08.04.2021 immediately after admission.Counter/written instructions by then with an advancecopy served upon the petitioner. Learned counsel forthe petitioner is directed to serve a copy of the WritPetitions and its annexures upon the learned counselfor the respondents.” 5.As directed, the case was listed on 08.04.2021 and theCourt has passed the following order : “W.P.Nos.8441, 8451 and 8447 of 2021andWMP. Nos.8991, 8992, 8994, 9001, 9002, 9006 and 9007 of 2021 Mr.A.P.Srinivas learned Senior Standing Counselseeks a few days for production of records as directedon 01.04.2021, since he states that the concernedofficer has returned from election duty onlyyesterday. 2.A specific clarification is sought as towhether any warrant has been issued in the names ofMs.Sigapi Muthiah and Ms.Meyyammai Muthiah, daughtersof Mr.M.A.M.R.Muthiah and Mrs.Geetha Muthiah. 3.List on 09.04.2021 along with W.P.Nos.8869,8893, 8927 and 8952 of 2021 at the end of admissionlist.” https://hcservices.ecourts.gov.in/hcservices/ From the above order, it is seen that the learned StandingCounsel for the Department sought few days for production ofrecords as directed on 01.04.2021, as the concerned officer hasreturned from Election duty only the previous day (07.04.2021).After recording the above submission, the Court proceeds torecord by observing that a specific clarification is sought foras to whether any warrant has been issued in the names of thetwo writ petitioners, who are the respondents before us in theseappeals. The case was directed to be listed on the next day,i.e., 09.04.2021 at the end of admission list. 6.In obedience to the directions issued by the Court, therecords appear to have been produced before the Court and theCourt has passed the interim order lifting the attachmentforthwith. In Para No.3 of the impugned order, the Courtrecords that the learned Standing Counsel has also confirmed thefact that the respondents/writ petitioners have not beensubjected to search and seizure under Section 132 of the Act. 7.In our considered view, the order lifting the attachmentforthwith would amount to allowing the writ petition itself, aswhat was impugned in the writ petition is the order ofattachment under Section 132(9B) of the Act. If the order ofattachment is lifted, then the respondent/assessee would get theentire relief as prayed for in the main writ petition. Thus, inour considered view, the prayer for interim stay of the order ofattachment, if granted before filing the counter and beforeadjudicating the issues, would result in granting the mainrelief at the interim stage itself, which is normally notgranted unless and until the pleadings are complete and thearguments are heard on the prayer for interim relief. 8.In the Memorandum of Grounds of Writ Appeal, it is statedthat the scope of provisional attachment under Section 132(9B)is wide and should not be construed to be limited to thesearched persons alone, as the scheme of search assessment underthe Act is not limited to the searched persons alone and it willinclude any other person to whom the seized materials mayrelate. Several other grounds have also been raised touchingupon the merits of the matter pointing out that search wasconducted under Section 132 of the Act in the group case andevidences indicating generation of unaccounted income to thetune of Rs.650 Crores have been found and the tax liabilityalong with interest and penalty leviable would be approximatelyRs.455 Crores, and the Department has proceeded to attach assets worth nearly Rs.260 Crores which is to the extent of the likelytax liability only, and the investigation in the group case isstill in progress and the order of attachment is only aprovisional order of attachment, which is of temporary nature. worth nearly Rs.260 Crores which is to the extent of the likelytax liability only, and the investigation in the group case isstill in progress and the order of attachment is only aprovisional order of attachment, which is of temporary nature. 9.The above ground and the other grounds raised in the WritAppeals are touching upon the merits of the matter, which needto be agitated in the writ petitions, for which, a counteraffidavit of the Department is essential. At the time when theWrit Appeals were entertained, noting that the order ofattachment has been raised, the respondents/writ petitionerswere directed not to liquidate the Fixed Deposits till thedisposal of the Writ Appeals. After considering the submissionsmade on either side and perusing the orders passed by the Courton 01.04.2021 and 08.04.2021 and the order impugned before us,we are of the view that, reasonable opportunity was not affordedto the appellant/Department to place their submissions on recordin the form of counter affidavit. In fact, in the impugnedorder, the Court has directed counter to be filed. Therefore,we are inclined to interfere with the impugned order. 10.For the reasons set out, these Writ Appeals are allowedand the impugned common order is set aside. No costs.Consequently, connected miscellaneous petitions are closed. 11.Further, we note that, pursuant to the impugned ordergranted in the writ petitions, the appellant has addressed theIndian Bank, Thousand Lights Branch, Chennai, vide communicationdated 20.04.2021, withdrawing the warrant of attachment againstthe respondents/writ petitioners. Therefore, we direct thatthose Fixed Deposits, which are 9 in number, shall continue toremain in the Indian Bank and the respondents/writ petitionersare prohibited from withdrawing the said amount or liquidatingthe Fixed Deposits, and the Indian Bank, Thousand Lights Branch,shall await the orders to be passed in the main writ petitions.The appellant/Department is granted eight weeks' time to filetheir counter affidavit and after serving copies of the counteralong with Annexures, if any, in the form of Typed Set ofPapers, the counter is to be filed in the Registry. List thewrit petitions before the appropriate Single Bench after twelveweeks. s/d- Assistant Registrar(CS-III) True Copy Sub-Assistant Registrar mknTo 1.The Deputy Director of Income Tax (Inv), Unit 4(2), Chennai, Room No.125, New Building (First Floor), New No.46, Old No.108, Nungambakkam High Road, Chennai – 600 034.2.The Branch Manager, Indian Bank, Thousand Lights Branch, Chennai.Copy to The Section Officer,Writ Section,High court, Madras.(for Posting) +3ccs to Mr.A.P.Srinivas, Advocate sr.39513 W.A.Nos.1643, 1644 and 1647 of 2021 ak-ii[co]srg 19/08/2021