Law:

Section:

2008] 303 ITR 166 [2008] 170 TAXMAN 497 (MAD.) HIGH COURT OF MADRAS Roshan Commercial Traders (P.) Ltd. v. Tax Recovery Officer K. RAVIRAJA PANDIAN, J. WRIT PETITION NO. 10120 OF 2007 AND M.P. NOS. 1 AND 2 OF 2007 MARCH 21, 2007 Section 226 of the Income-tax Act, 1961 - Collection and recovery of tax - Other modes of recovery - Petitioner purchased goods from a company 'D', which had some disputes in respect of income-tax payable by it - In course of recovery of that amount, revenue issued a garnishee notice to petitioner requiring it to pay amount due to 'D' to department towards tax due from 'D' - A copy of notice had also been marked to petitioner's bankers which paid certain amount to department towards tax due of 'D' - Petitioner filed writ petition challenging validity of notice - Whether notice issued under section 226(3) to petitioner was in accordance with law and same could not be said to be illegal merely because bankers had paid certain amount to department without petitioner's knowledge - Held, yes FACTS The petitioner-company purchased goods from a company 'D' which had some dispute in respect of income-tax payable by it. In the course of recovery of the tax amount from 'D', the TRO issued a garnishee notice under section 226(3) to the petitioner requiring it to pay the amount due to 'D' to the department towards the tax due from 'D'. A copy of the notice had also been marked to the petitioner's bankers. The petitioner filed instant writ petition contending that notice was not valid as in view of that notice, the bankers of the petitioner had paid the amount due from 'D' to the department towards tax due from 'D' even without knowledge of the petitioner which was impermissible in law. HELD The notice issued to the petitioner was strictly in accordance with law. Hence, the issuance of notice under section 226(3) could not be found fault with. If the petitioner was having any grievance about making the payment, without its knowledge, it was for it to agitate the matter separately against the bankers. The notice had been issued strictly in accordance with the statutory provisions and, there was no illegality or irregularity in the issuance of notice.…

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