Wa/1653/2023 Of P R Combines v. Assistant Commissioner Of Income Tax

-:1:- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE DR. JUSTICE KAUSER EDAPPAGATH THURSDAY, THE 21 DAY OF SEPTEMBER 2023 / 30TH BHADRA, 1945 WA NO. 1653 OF 2023 AGAINST THE JUDGMENT DATED 5.9.2023 IN WP(C) 28145/2023 OFHIGH COURT OF KERALA APPELLANT/PETITIONER: M/S.P R COMBINES, 19/1780, NARAYANA, P V SAMY ROADCHALAPURAM, KOZHIKODE, REPRESENTED BY ITS PARTNER - K N GOPALAKRISHNAN, PIN - 673002 M/ BY ADV R.JAIKRISHNA RESPONDENTS: 1ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, NORTH BLOCK, NEW ANNEXE BUILDING, MANANCHIRA, KOZHIKODE, PIN - 673001 2COMMISSIONER OF INCOME TAX (APPEALS), OFFICE OF COMMISSIONER OF INCOME TAX (APPEALS,CR BUILDING, IS PRESS ROAD, KOCHI-682 018 3ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, NORTH BLOCK, NEW ANNEXE BUILDING, MANANCHIRA, KOZHIKODE, PIN - 673001 -:2:- 4VIJAYA BANK, AFTER MERGER - BANK OF BARODA, KALLAIROAD JUNCTION CHALLAPURAM, INDUS AVENUE BUILDING KOZHIKODE - 673002 REPRESENTED BY ITS - BRANCH MANAGER5PUNJAB NATIONAL BANK, SHATADBHI BHAVAN, SERVICE BLOCK MINI BYE PASS ROAD, GOVINDAPURAM KOZHIKODE REPRESENTED BY ITS - BRANCH MANAGER, PIN - 673007BY ADV BEPIN VIJAYAN ADV NAVANEETH N NATH SC IT THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON21.09.2023, THE COURT ON THE SAME DAY DELIVERED THEFOLLOWING: J U D G M E N T Dr. A.K.Jayasankaran Nambiar, J This appeal impugns the judgment dated 5.9.2023 in W.P.(C).No. 28145 of 2023. 2.The brief facts necessary for the disposal of the writappeal are as follows: The appellant had approached the writ court through the writpetition aforementioned aggrieved by the recovery steps pursued bythe 3[rd] respondent for realisation of the disputed income and interestpertaining to the assessment years 2015-2016, 2016-2017, 2017-2018and 2018-2019. It would appear that, as part of the recovery stepsinitiated by the 3[rd] respondent, garnishee proceedings were initiatedagainst the bank accounts maintained by the appellant with the 4[th]and 5[th] respondent banks. Inasmuch as the appellant was preventedfrom operating the said bank accounts, it approached the writ courtwith a prayer for lifting the garnishee proceedings, pending disposalof the statutory appeals preferred by it against the order of the 3[rd]respondent. 3.The learned Single Judge who considered the matterrecorded the submission of the learned counsel for the appellant that it was willing to deposit 20% of the assessed tax amount subject to thefinal outcome of the appeals and as a condition for refraining fromenforcing the garnishee orders. The writ petition was thereforedisposed of with a direction to the appellant to deposit 20% of theassessed amount in Exts. P1 to P4 assessment orders, within a periodof one month, making it clear that on such deposit, the appellateauthority could proceed with the hearing of the applications forcondoning delay and the appeals expeditiously and decide the same inaccordance with law. It was also made clear that till disposal of theappeals, Exts. P5 to P8 demand notices and Exts.P17 and P18recovery-cum-garnishee orders would be kept in abeyance. 4.In the appeal before us, the submission of the learnedcounsel for the appellant Sri. Jaikrishna R. is that while the appellanthas a month's time to make the deposit of 20% of the assessedamount, the 4[th] and 5[th] respondent banks have not lifted theattachment over the bank accounts pursuant to the garnishee ordersreceived by them and hence, the appellant is unable to operate thosebank accounts during the one month that it has to make the paymentsdirected by the learned Single Judge. 5.On a consideration of the said submission of the learnedcounsel for the appellant, we find that the stand taken by the 4[th] and 4.In the appeal before us, the submission of the learnedcounsel for the appellant Sri. Jaikrishna R. is that while the appellanthas a month's time to make the deposit of 20% of the assessedamount, the 4[th] and 5[th] respondent banks have not lifted theattachment over the bank accounts pursuant to the garnishee ordersreceived by them and hence, the appellant is unable to operate thosebank accounts during the one month that it has to make the paymentsdirected by the learned Single Judge. 5.On a consideration of the said submission of the learnedcounsel for the appellant, we find that the stand taken by the 4[th] and 5[th] respondent cannot be said to be unreasonable since there is alwaysa danger that if the appellant is permitted to operate the bankaccount during the period of one month granted to him to make thedeposit of 20% of the assessed tax, he may deplete the said accountsand thereby render the whole exercise of tax recovery futile.Confronted with the said situation, the learned counsel for theappellant sought time to get instructions as to whether alternativesecurity could be offered to the Income Tax Department, through the4[th] and 5[th] respondent banks, to secure the amounts demanded by theDepartment. When the matter was taken up today, it is brought toour notice by the learned counsel for the appellant that there arethree fixed deposit accounts in the name of Sri.K.N. Gopalakrishnan,the partner of the appellant firm, and the amounts in those depositsare as follows: Punjab National Bank (5[th] Respondent)-Fixed Deposit Details 6.Finding that the total amount of ₹28,25,000/- covered bythe three fixed deposit accounts aforementioned would approximateto the 20% of assessed tax amount directed to be deposited by thelearned Single Judge, we dispose of this writ appeal with the followingdirections: 1) The appellant shall intimate the 5[th] respondent bank with a copyto the 4[th] respondent bank and the 3[rd] respondent, that the fixeddeposit accounts standing in the name of its partner with the 5[th]respondent bank shall not be operated by the account holderpending disposal of the appeals of the appellant by the 2[nd]respondent. The said intimation letter issued by the appellantshall be counter signed by Sri.K.N. Gopalakrishnan, its partnerin whose personal name the fixed deposits aforementionedstand. The said Sri.K.N. Gopalakrishnan shall also ensure thatthe fixed deposit accounts aforementioned are kept alive duringthe pendency of the appeals aforementioned.to the 4[th] respondent bank and the 3[rd] respondent, that the fixeddeposit accounts standing in the name of its partner with the 5[th]respondent bank shall not be operated by the account holderpending disposal of the appeals of the appellant by the 2[nd]respondent. The said intimation letter issued by the appellantshall be counter signed by Sri.K.N. Gopalakrishnan, its partnerin whose personal name the fixed deposits aforementionedstand. The said Sri.K.N. Gopalakrishnan shall also ensure thatthe fixed deposit accounts aforementioned are kept alive duringthe pendency of the appeals aforementioned. 2) On receipt of the said intimation from the appellant/Sri.K.N.Gopalakrishnan, the 4[th] and 5[th] respondent banks, as also the 3[rd]respondent Assistant Commissioner of Income Tax, shall treatthe amount covered by the aforementioned fixed depositGopalakrishnan, the 4[th] and 5[th] respondent banks, as also the 3[rd]respondent Assistant Commissioner of Income Tax, shall treatthe amount covered by the aforementioned fixed deposit -:7:- accounts as the security directed to be deposited by the learnedSingle Judge in the judgment impugned in this writ appeal. 2) On receipt of the said intimation from the appellant/Sri.K.N.Gopalakrishnan, the 4[th] and 5[th] respondent banks, as also the 3[rd]respondent Assistant Commissioner of Income Tax, shall treatthe amount covered by the aforementioned fixed depositGopalakrishnan, the 4[th] and 5[th] respondent banks, as also the 3[rd]respondent Assistant Commissioner of Income Tax, shall treatthe amount covered by the aforementioned fixed deposit -:7:- accounts as the security directed to be deposited by the learnedSingle Judge in the judgment impugned in this writ appeal. 3) On the appellant complying with the condition '1' above, it shallbe free to operate all other bank accounts standing in its namewith the 4[th] and 5[th] respondents. The 2[nd] respondent shallthereafter proceed to consider the appeals preferred by theappellant on merits, after condoning the delay of 433 daysoccasioned in filing the same.be free to operate all other bank accounts standing in its namewith the 4[th] and 5[th] respondents. The 2[nd] respondent shallthereafter proceed to consider the appeals preferred by theappellant on merits, after condoning the delay of 433 daysoccasioned in filing the same. 4) The fate of the garnishee orders issued by the 3[rd] respondentshall be determined by the outcome of the appealsaforementioned.shall be determined by the outcome of the appealsaforementioned. sd/- DR. A.K.JAYASANKARAN NAMBIARJUDGE sd/- DR. KAUSER EDAPPAGATHJUDGE