Limited interim protection against garnishee recovery granted while directing expeditious Tribunal consideration of the stay application.

Writ jurisdiction was used to grant only limited interim protection against garnishee recovery under section 226(3) while preserving the bank account attachment. The assessee was directed to first seek an out-of-turn hearing before the Tribunal, and the Tribunal was asked to consider the stay application, and if possible the appeal, expeditiously on filing of the certified copy and application. The bank was restrained from acting on the recovery notice for one month, unless the amount had already been remitted, but the attachment itself was continued.

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Issues: (i) whether a direction could be issued to the Tribunal for early hearing and expeditious disposal of the stay application or appeal; (ii) whether coercive recovery under the garnishee notice under section 226(3) of the Income-tax Act, 1961 should be kept in abeyance for a limited period.

Issue (i): whether a direction could be issued to the Tribunal for early hearing and expeditious disposal of the stay application or appeal.

Analysis: The writ petition was filed while the stay application before the Tribunal had been moved only shortly earlier. The Court found that, in fairness, the petitioner ought first to have approached the Tribunal for an out-of-turn hearing instead of invoking writ jurisdiction. At the same time, it considered it appropriate to permit the petitioner to seek such early hearing before the Tribunal and to require expeditious consideration once a proper application and certified copy of the order were placed before it.

Conclusion: The petitioner was directed to move the Tribunal for early hearing, and the Tribunal was directed to decide the stay application, and if possible the appeal itself, within three weeks of filing of the certified copy and application.

Issue (ii): whether coercive recovery under the garnishee notice under section 226(3) of the Income-tax Act, 1961 should be kept in abeyance for a limited period.

Analysis: The recovery notice had been issued while the stay application was pending. The Court balanced the interests of recovery with the pendency of the stay request by granting only limited interim protection. It permitted the bank not to act on the notice for a short period, while expressly maintaining the attachment over the bank account.

Conclusion: The bank was restrained from acting on the notice for one month, unless the amount had already been remitted, but the attachment of the petitioner's bank account was continued.

Final Conclusion: The writ petition was disposed of by granting limited protective relief and by directing expeditious consideration of the pending stay matter before the Tribunal, without vacating the attachment.

Ratio Decidendi: In writ jurisdiction, limited interim protection against recovery may be granted while preserving attachment and directing the assessee to seek expeditious relief before the statutory appellate forum.

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