Law:

Section:

Section 226 of the Income-tax Act, 1961 - Collection and recovery of tax - Other modes of recovery - Petitioners were employees of company A but were working with company B - Income-tax Department issued garnishee notice to company B for recovery of tax dues from company A - Petitioners challenged said garnishee notice on ground that amounts to be paid by company B to company A were to be utilised towards payment of salary to them by company A and, if tax was recovered from that amount, their rights would be affected - They claimed immunity from attachment of amount payable by company B to company A under section 226(2) as it partook character of salary - Whether original petition was not maintainable for reason that petitioners had no locus standi to question impugned notice which was nothing but recovery proceeding initiated by income-tax authorities against petitioners' employer - Held, yes - Whether since petitioners could not establish their claim of priority over income-tax dues and had no direct grievance against garnishee notice, they could not challenge said notice - Held, yes - Whether, since attachment was neither of salary of petitioners nor notice was served on their employer, proviso to section 226(2) had no application and petitioners could not claim immunity from attachment under said proviso - Held, yes FACTS The petitioners were the employees of the third respondent-company which supplied security personnel to various companies including the second respondent. Income-tax Department issued recovery notice (a garnishee notice) to the second respondent, with which the petitioners were working, for recovery of tax dues from third respondent, i.e., the petitioner's employer. On writ petition, the petitioners challenged that notice on the ground that the amounts to be paid by the second respondent to the third respondent were to be utilised towards payment of salary to the petitioners and if income-tax was recovered from that amount, the petitioner's rights would be affected. The petitioners relied on the protection conferred under the proviso to section 226(2) and claimed immunity from attach-ment of a part of salary exempt from attachment under…

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