Court finds no surviving order under Section 281B, allowing respondents to proceed as per law. Writ petition disposed.

The court concluded that there was no surviving order under Section 281B as of the date of the judgment. The respondents were given the liberty to proceed in accordance with the law, and the writ petition was disposed of without costs.

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Issues Involved:
1. Validity and extension of provisional attachment under Section 281B of the Income Tax Act, 1961.
2. Entitlement to refunds claimed by the petitioner.
3. Impact of the Supreme Court's stay on block assessment proceedings.
4. Applicability of the third proviso to Section 281B inserted by Finance (No. 2) Act, 2009 with retrospective effect.
5. Requirement of communication of extension orders under Section 281B.

Issue-wise Detailed Analysis:

1. Validity and Extension of Provisional Attachment under Section 281B:
The petitioner challenged the order dated 28th July, 2005, which provisionally attached refunds due to the petitioner under Section 281B of the Income Tax Act, 1961. The initial order was valid for six months, expiring on 25th January, 2006. The petitioner contended that they were not informed about any extensions beyond this date. The court noted that the first attachment order was issued on 28th July, 2005, and the total period for which extension can be granted under Section 281B is two years and six months. Therefore, the provisional attachment period ended on 24th January, 2008. No further orders extending the provisional attachment were passed after this date.

2. Entitlement to Refunds Claimed by the Petitioner:
The petitioner claimed refunds amounting to Rs. 3,85,35,158/- for various assessment years. The court observed that the petitioner had not challenged the extensions of the provisional attachment and noted that the petitioner had not been communicated about these extensions. The court also highlighted that the petitioner argued the spirit behind Section 281B is not to deprive the assessee of the refund beyond the maximum period of attachment.

3. Impact of the Supreme Court's Stay on Block Assessment Proceedings:
The block assessment proceedings against the petitioner were stayed by the Supreme Court, and it was directed that no final assessment order would be passed until the disposal of the appeal. The court noted that the block assessment proceedings were to be completed by 25th August, 2007, but due to the stay granted by the Supreme Court, the proceedings were still pending. The court acknowledged the connection between the block assessment proceedings and the refunds due to the petitioner.

4. Applicability of the Third Proviso to Section 281B Inserted by Finance (No. 2) Act, 2009:
The third proviso to Section 281B, inserted by Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 1988, states that the period during which assessment/reassessment proceedings are stayed by a court order shall be excluded from the period specified in the first proviso. The court noted that no order under Section 281B was passed after the insertion of the third proviso. Therefore, the court did not examine the applicability of the third proviso in detail, leaving it to be addressed in an appropriate case if a fresh order under Section 281B is passed by the Revenue.

5. Requirement of Communication of Extension Orders under Section 281B:
The petitioner argued that extension orders under Section 281B were required to be communicated, citing various judicial decisions. The court did not delve into this aspect as no extension orders were passed after 24th January, 2008. The court also noted that the Revenue did not argue that the third proviso incorporates a deeming provision for the continuation of the provisional attachment order beyond the stipulated period.

Conclusion:
The court concluded that there was no surviving order under Section 281B as of the date of the judgment. The court accepted the respondents' prayer that the writ petition should not be treated as dismissed but recorded that no order under Section 281B was in operation. The respondents were given the liberty to proceed in accordance with the law, and the writ petition was disposed of without costs.

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