Visakhapatnam Port Trust, Administrative Office V. Union of India, Ministry of Finance,

WP/5010/2009

AI Insights

The case involves the Visakhapatnam Port Trust (petitioner) challenging the actions of the Assistant Commissioner of Income Tax (respondent) in issuing attachment notices for tax dues. The petitioner, having merged with the Visakhapatnam Dock Labour Board, inherited its tax liabilities and contested the demands through various appeals and requests for installment payments. The respondent's insistence on immediate payment led to the filing of this writ petition under Article 226 of the Constitution, seeking to declare the respondent's actions as illegal and arbitrary. The court's decision to quash the garnishee notices was based on the ongoing legal proceedings and the financial capability of the petitioner to settle the dues in installments.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 741221 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 13-03-2009
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Major Port Trusts Act, 1963, Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: A REDDY; SPL G P FOR COMMERCIAL TAXES
• Assessee Lawyers: C RAM
• Keywords: Attachment Notices; Coercive Steps; Disputed tax; Garnishee notices; Income Tax; Writ of Mandamus
• Section: 226(3); 12(A)

Judgement Text

" IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE THIRTEENTH DAY OF MARCH TWO THOUSAND AND NINE PRESENT THE HON'BLE SMt. JUSTICE T.MEENA KUMARI and THE HON'BLE SRI JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION NO : 5010 of 2009 Between: Visakhapatnam Port Trust, Administrative Office Building, Port Area, Visakhapatnam -530035, represented by its Chairman. ..... PETITIONER AND 1 Union of India, Ministry of Finance, New Delhi, represented by its Secretary. 2 The Assistant Commissioner of Income Tax, Circle 1(1), Range 1(1) Direct Taxes Building, Opposite Rythu Bazar, MVP Colony, Visakhapatnam. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a writ, order or direction, more particularly one in the nature of a Writ of Mandamus, declaring the acts of the 2nd respondent in issuing the attachment notices dated 6.3.2009 to the employers/debtors of the petitioner directing them to remit the amounts payable to the petitioner to the 2nd respondent as illegal, arbitrary, violative of the petitioners rights guaranteed under Article 19(1)(g) of the Constitution of India in the light of the fact that the petitioner has already approached the C.O.D. seeking permission to challenge the orders of the 2nd respondent, and pass such other orders. Counsel for the Petitioner: M/SC.KODANDA RAM Counsel for the Respondent No.1: MR.A.RAJASHEKAR REDDY (ASST SOLICITOR GEN) Counsel for the Respondent No.2: Spl. G.P. for Commercial Taxes The Court made the following : THE HON'BLE SMT. JUSTICE T.MEENA KUMARI and THE HON'BLE SRI JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION NO. 5010 OF 2009 ORDER : (Per Hon’ble Smt. Justice T. Meena Kumari) Heard the learned counsel appearing for the petitioner and the learned Special Government Pleader for Commercial Taxes. Assailing the action of the 2nd respondent in issuing the attachment notices dated 6.3.2009, the petitioner filed the present writ petition. The facts in brief are that the petitioner-Organisation is an authority constituted under the Major Port Trusts Act, 1963. According to the petitioner, the Union of India through its Gazette Notification dated 26.9.2008, has merged the Visakhapatnan Dock Labour Board(VDLB) with the petitioner, and as a consequence, all the assets and liabilities of the VDLB has devolved upon the petitioner. Petitioner states that during the assessment year 2002-03, the assessing officer while holding that the VDLB cannot be registered under Section 12(A), had raised a demand of Rs. 44,14,55,306/- for the assessment years 1998-99, 1999-2000, 2000-01, 2001-02 and 2003-04. Aggrieved by the same, the VDLB has filed an appeal before the Commissioner of Income Tax and the Commissioner while upholding the orders of the assessing authority, has rejected the appeal. Aggrieved, the petitioner again filed an appeal before the Income Tax Appellate Tribunal, Visakhapatnam and the same is said to be pending. However, it appears, after the dismissal of the appeal by the Commissioner of Income Tax, the 2nd respondent has been continuously demanding the VDLB to pay the outstanding dues and the VDLB also requested the 2nd respondent to permit it to pay the demanded amount in instalments. Subsequently, the 2nd respondent through its letter dated 16.11.2007 while accepting the request of the VDLB, permitted it to pay the outstanding amount in monthly instalments @ Rs. 17,00,000/-. It appears, the VDLB has increased the instalment amount from 17,00,000/- to Rs. 20,00,000/-. However, the 2nd respondent, for the reasons best known to him, having come to know of the merger of VDLB with the petitioner, has withdrew the said facility and called upon the petitioner to pay the dues at once. Petitioner pleaded its inability and requested for extending the facility of payment of the demanded amount in instalments. However, the 2nd respondent without considering the request of the petitioner, has issued the demand notices dated 1.1.2009 and 30.1.2009. Aggrieved, the petitioner filed an appeal before the Income Tax Appellate Tribunal. Along with the appeal, it also filed an application for stay and the said application seems to have been posted to 20.3.2009. The petitioner also approached the Committee on Disputes, New Delhi seeking to challenge the orders of the 2nd respondent dated 30.1.2009. This fact was also informed to the ITAT as well as the 2nd respondent. While so, the 2nd respondent issued notices under Section 226(3) of the Income Tax Act, 1961 on 6.3.2009 to the employers/debtors of the petitioner directing them to remit the amounts payable to the petitioner to the 2nd respondent. Hence, the present writ petition. Leaned counsel for the petitioner contends that even when the appeal filed against the order of the assessing authority is pending before the Income Tax Appellate Tribunal and even though the matter is referred to COD, the 2nd respondent issued the garnishee notices contemplating to take coercive steps for recovery of the disputed tax. He, therefore, prayed that the impugned notices be set aside and appropriate directions be issued. We have gone through the record. We feel that ends of justice would have been met if stay was granted pending appeal subject to deposit of certain amount. Therefore, we quash the impugned garnishee notices dated 6.3.2009 and direct the petitioner to pay Rs. 4.00 crores (Rupees Four Crores only), out of which, the petitioner shall pay Rs. 2.00 crores on or before 31.3.2009 and the remaining amount of Rs. 2.00 crores on or before 30.6.2009. The deposit of amount shall be without prejudice to the rights of the petitioner in the appeal. If any amount has already been paid by the petitioner, the same shall be given credit to. The Writ Petition is accordingly disposed of. No costs. ___________________ T. MEENA KUMARI,J DATE: 13th March, 2009 _________________________ C.V. NAGARJUNA REDDY,J Note: Furnish c.c. in three days. B/o pnb "