Garnishee recovery under tax law is limited where liability is disputed and the same debt cannot be recovered twice.

Section 226(3) permits garnishee recovery only where money is due to an assessee in default, but a prima facie objection by the garnishee must be met with material showing the claim to be false before recovery can continue. The Tax Recovery Officer cannot decide disputed civil liability between the decree-holder and the garnishee, or bypass the executing court where the underlying decree obligation is contested. Recovery must also be aligned with any company forum scheme and interim restraint affecting the debt, and the same amount should not be pursued from multiple sources. The operative effect is that garnishee recovery is confined to the liability admitted or otherwise properly established, with credit for sums already recovered.

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Issues: Whether notice under section 226(3) of the Income-tax Act, 1961 could be enforced against the petitioners as garnishees when they disputed the extent of liability under the decree, a company-forum scheme and interim restraint were in place, and the tax recovery would otherwise operate from multiple sources.

Analysis: Section 226(3) authorises recovery from a person from whom money is due to an assessee in default, but clause (vi) permits the garnishee to object. Once a prima facie objection is raised, the Tax Recovery Officer cannot treat the claim as false without material showing falsity, nor can he usurp the jurisdiction of the executing court or decide the underlying civil dispute between the decree-holder and the garnishee. The record also showed that the petitioners did not admit the entire decretal liability and that recovery had to be harmonised with the company proceedings and the scheme affecting the decree. The Court also accepted that recovery should not be pursued from two sources for the same amount.

Conclusion: The garnishee notice could not be enforced for the whole decree amount. Recovery was confined to the amount specified by the petitioners in terms of the company forum or scheme, with adjustment of sums already recovered, and the balance could not be recovered under section 226(3).

Ratio Decidendi: Under section 226(3) of the Income-tax Act, 1961, a garnishee's prima facie objection to liability must be independently shown to be false before recovery can proceed, and the Tax Recovery Officer cannot determine disputed civil liability or recover the same amount from multiple sources.

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