Court Orders Statement on Oath, Hearing on Due Amount

The court directed the petitioners to file a statement on oath by a specified date to clarify their position regarding the amount due, emphasizing compliance with procedural requirements. The Tax Recovery Officer was instructed to give a hearing, decide the matter, and provide reasons by a specified date. The prohibitory order and account attachment were to continue until a specified period post the Officer's decision, allowing the petitioners time for legal recourse. The court noted the request for lifting the attachment on furnishing a bank guarantee but required a formal application to be made to the Tax Recovery Officer. The writ petition was disposed of based on these directives, with an emphasis on procedural regularity.

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Issues:
1. Challenge to notice issued under section 226(3) of the Income-tax Act, 1961.
2. Liability denial by petitioners.
3. Prohibitory order issued by Tax Recovery Officer.
4. Requirement of filing statement on oath under section 226(3)(vi).
5. Direction for hearing and decision by Tax Recovery Officer.
6. Continuation of prohibitory order and account attachment.
7. Request for lifting attachment on furnishing a bank guarantee.
8. Disposal of the writ petition.

Analysis:
1. The petitioners sought to challenge a notice dated December 24, 2002, issued under section 226(3) of the Income-tax Act, 1961, directing the Branch Manager of Standard Chartered Bank to pay an amount due from the petitioners as an assessee in default. The court noted that the petitioners did not file objections as required under section 226(3)(vi) but the Tax Recovery Officer did not declare them as assessee in default. The court ordered the assessee to file a statement on oath by a specified date, failing which the Tax Recovery Officer could proceed as per the relevant sections of the Income-tax Act.

2. The petitioners, in reply dated December 17, 2002, denied their liability for the amount mentioned in the notice. Despite the denial, the Tax Recovery Officer issued a prohibitory order on December 17, 2002, restraining the petitioners from making payments to another entity. The court directed the petitioners to file a statement on oath under section 226(3)(vi) to clarify their position regarding the amount due.

3. The Tax Recovery Officer issued a prohibitory order on December 17, 2002, preventing the petitioners from making payments to a specific entity. The court ordered the continuation of this prohibitory order and the attachment of the petitioners' account in Standard Chartered Bank until a specified period after communication of the decision by the Tax Recovery Officer, allowing the petitioners time to challenge the order if advised to do so.

4. The court directed the petitioners to file a statement on oath under section 226(3)(vi) by a specified date, emphasizing the importance of complying with the procedural requirements outlined in the Income-tax Act. Failure to do so could result in further action by the Tax Recovery Officer under the relevant provisions of the Act.

5. The court directed the Tax Recovery Officer to give a hearing to the petitioners if they filed the statement on oath as required. The Officer was instructed to decide the matter in accordance with the law and provide reasons for the decision by a specified date. This direction aimed to ensure procedural fairness and adherence to legal requirements in resolving the dispute.

6. The court clarified that the prohibitory order and the attachment of the petitioners' account in the bank would continue to operate for a specified period after the Tax Recovery Officer's decision was communicated to the petitioners. This provision allowed the petitioners time to take necessary legal steps, such as challenging the decision or seeking a stay order from the appropriate authority.

7. The petitioners requested the lifting of the attachment on furnishing a bank guarantee, which was noted by the court. However, as no formal application was made to the Tax Recovery Officer as required by the relevant rule, the court stated that the petitioners could still make such an application. The decision on the application would be made by the Tax Recovery Officer in accordance with the law.

8. The writ petition was disposed of based on the court's orders and directions regarding the filing of statements, continuation of prohibitory orders, and the possibility of lifting the attachment on furnishing a bank guarantee. The court expedited the issuance of a certified copy upon compliance with the specified requirements, emphasizing the need for procedural regularity in legal proceedings.

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