M/S MEENAKSHY ENTERPRISES V. THE DY.COMMISSIONER OF INCOME TAX,CIRCLE-1 KOTTAYAM

WP(C)/3723/2012

AI Insights

The case involves M/S Meenakshi Enterprises, represented by its managing partner, who filed a writ petition challenging an assessment order and subsequent garnishee notice issued by the Income Tax Department. The assessment order, which was contested through an appeal, led to a significant demand for payment, resulting in the attachment of the petitioners' bank accounts. The petitioners argued that this action halted their business operations. The court, considering the circumstances and the pending appeals, ordered a stay on the garnishee notice contingent upon the payment of Rs.5 crores in installments and directed the appellate authority to expedite the appeal process.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 699726 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 15-02-2012
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH; N RAJAGOPALAN NAIR
• Assessee Lawyers: T M SREEDHARAN; NISHA JOHN; V P NARAYANAN; BOBY SEKHAR
• Keywords: Appeal; Assessment Order; Bank Account Attachment; Garnishee notice; Stay Petition
• Section: 226(3)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC WEDNESDAY, THE 15TH DAY OF FEBRUARY 2012/26TH MAGHA 1933 WP(C).No. 3723 of 2012 (M) -------------------------- PETITIONER(S): ----------------------- M/S MEENAKSHI ENTERPRISES, Y.M.C.A. ROAD, KOTTAYAM, REPRESENTED BY SHRI MURUKESH THEVAR, MANAGING PARTNER. BY SRI.T.M.SREEDHARAN, SENIOR ADVOCATE. ADVS. SMT.NISHA JOHN, SRI.V.P.NARAYANAN, SMT.BOBY M.SEKHAR. RESPONDENT(S): -------------------------- 1 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, KOTTAYAM. 2 THE COMMISSIONER OF INCOME TAX (APPEALS)-IV, AYYAKKAR BHAVAN, I.S. PRESS ROAD, COCHIN-682 018. 3. INDUSIND BANK LTD., KOTTAYAM BRANCH, REGENCY SQUARE, K.K. ROAD, COLLECTORATE, KOTTAYAM-686 002. 4. AXIS BANK, NO.LX-311, A2 CENTURY TOWERS, NEAR Y.W.C.A., KOTTAYAM-686 001. 5. PUNJAB NATIONAL BANK, P.B. NO.135, SHANGRI-LA PLAZA, T.B. ROAD, KOTTAYAM-686 001. 6. TAMIL NADU MERCHANTILE BANK LTD., CSI COMMERCIAL COMPLEX, BAKER JUNCTION, KOTTAYAM-686 001. 7. CORPORATION BANK, KOTTAYAM BRANCH, VALAYIL BUILDING, SHASTRI ROAD, KOTTAYAM-686 001. 8. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, PUBLIC LIBRARY BUILDING, SHASTRY ROAD, KOTTAYAM. R1, R2 & R8 BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX. R7 BY ADV. MR.N. RAJAGOPALAN NAIR, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15-02-2012, ALONG WITH WPC. 3724 OF 2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs. WP(C).No. 3723 of 2012 (M) APPENDIX PETITIONER'S EXHIBITS:- EXT.P1 COPY OF THE ASSESSMENT ORDER AND DEMAND NOTICE IN FORM NO.7 DATED 31/12/2010. EXT.P2 COPY OF THE MEMORANDUM OF APPEAL FILED BEFORE THE 2ND RESPONDENT DATED 28/01/2011. EXT.P3 COPY OF THE STAY PETITION DATED 21/07/2011 FILED BEFORE THE 2ND RESPONDENT. EXT.P4 COPY OF THE ORDER DATED 15/07/2011 REJECTING THE REQUEST FOR STAY. EXT.P5 COPY OF THE NOTICE NO.AIUPS3690L DATED 06/02/2012 ISSUED BY THE 8TH RESPONDENT. EXT.P6 COPY OF THE INSTRUCTION NO.96 DATED 21/08/1969. EXT.P7 COPY OF THE LETTER DATED 13/02/2012 SUBMITTED BY THE PETITIONER BEFORE THE 8TH RESPONDENT. RESPONDENT'S EXHIBITS:- NIL. //TRUE COPY// P.S. TO JUDGE rs. ANTONY DOMINIC, J. -------------------------------------------------- W.P.(C) Nos.3723 & 3724/2012 -------------------------------------------------- Dated this the 15th day of February, 2012 J U D G M E N T Writ petition(c).No.3723/2012 is filed by the partnership firm represented by its Managing Partner and Writ Petition(c). No.3724/2012 is filed by a person who is a partner in the firm and has been assessed in the capacity of legal heir2. . 2. Ext.P1 orders produced in these writ petitions are orders of assessment. According to the petitioner in writ petition (c).No.3723/2012, aggrieved by this order, they have already filed Ext.P2 appeal and Ext.P3 stay petition which are pending consideration of the 2nd respondent. In so far as the petitioner in writ petition(c).No.3724/2012 is concerned she too has filed Ext.P2 appeal challenging Ext.P1 order of assessment. 3. While the appeals are pending consideration of the appellate authority garnishee notice under Section 226(3) of the Income Tax Act(Ext.P5) had been issued demanding payment of an amount of Rs.26,19,34,991/- from the petitioners. As a result WPC.No. 3723 & 3724/2012 :2 : the Bank accounts of the petitioners stand attached which lead the petitioners to file these writ petitions. 4. I heard the Senior Counsel appearing for the petitioners and the Standing Counsel appearing for the respondents 1 and 5. As at present Ext.P2 appeals filed by the petitioners in these cases challenging Ext.P1 order of assessment are pending consideration of the 2nd respondent. Therefore it will be premature for this court to deal with the contentions raised by the learned Sr. Counsel for the petitioners and it is for the respective petitioners to urge these contentions before the appellate authority. 6. Presently petitioners' main grievance is regarding Ext.P5 notice issued under Section 226(3) attaching the bank accounts. As already seen, the demand contained in Ext.P5 is for more than Rs.26 crores and according to the Standing Counsel for the respondents substantial amounts are available in the Bank accounts of the petitioners. Petitioners contend that as a result of the notices above mentioned, the entire bank operations have WPC.No. 3723 & 3724/2012 :3 : been stopped and as a consequence there of, their business operations have also been stopped. In order to avoid such a situation and also taking note of the amount that is demanded from the petitioners and also the pendency of the appeals filed by the petitioners I direct that subject to the petitioners paying Rs.5 crores in two equal monthly installments payable on or before 28.2.2012 and 15.3.2012, Ext.P5 the notice issued by the respondent under Section 226(3) of the Income Tax Act will stand stayed on the payment of the Ist installment. 7. The appellate authority, the 2nd respondent is also directed to dispose of Ext.P2 appeals with notice to the petitioners, as expeditiously as possible and at any rate within 8 weeks of receipt of a copy of the judgment. Writ petition is disposed of as above. (ANTONY DOMINIC) JUDGE vi/ WPC.No. 3723 & 3724/2012 :4 : "