Civil suit barred by tax statute where interest claim would interfere with statutory proceedings and refund determination.

A civil suit seeking recovery of interest on amounts deposited with the Income Tax Department was treated as barred by Section 293 of the Income-tax Act, 1961 because the claim would indirectly interfere with the consequences of proceedings and orders under the Act. The court noted that a recovery claim tied to computation and refund determined in a settlement order should have been pursued within the statutory framework or by challenge in the proper forum. Section 9 of the Code of Civil Procedure could not confer jurisdiction where the Act itself imposed an express bar. The civil court therefore had no jurisdiction to entertain the suit.

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Issues: Whether the civil suit for recovery of interest on amounts deposited with the Income Tax Department was barred by Section 293 of the Income-tax Act, 1961 and therefore not maintainable before the civil court.

Analysis: The suit sought relief which would effectively alter the consequences of proceedings under the Income-tax Act, because the plaintiff's claim for interest on the unpaid drafts was connected with the computation and refund determined in the settlement and consequential order under the Act. Section 293 creates an express bar against civil proceedings that would set aside, modify, or indirectly interfere with proceedings or orders under the Act. The claim, even if framed as a recovery suit, was one that ought to have been raised and pursued in the statutory proceedings or by challenge to the order in the appropriate forum. Section 9 of the Code of Civil Procedure, 1908 does not confer jurisdiction where such a statutory bar exists.

Conclusion: The suit was barred by Section 293 of the Income-tax Act, 1961 and the civil court had no jurisdiction to entertain it.

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