Recovery proceedings barred by departmental circular threshold where the amount was small and already paid with interest.

Proceedings for recovery or assessment were held unsustainable where the disputed amount was below the threshold in the applicable departmental circular and had already been paid with interest long ago. The circular dated 7 February 1992 applied to amounts below Rs. 25,000, and on that basis the proceedings ought not to have been initiated. The refusal to quash by the High Court was therefore found unsustainable, and the proceedings against the appellants were quashed.

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Issues: Whether proceedings for recovery/assessment could be continued when the amount involved was below the threshold in the applicable departmental circular and had already been paid with interest.

Analysis: The amount involved was small, had already been paid with interest long ago, and the circular dated 7 February 1992 applied where the amount was below Rs. 25,000. On that basis, the proceedings ought not to have been initiated. The High Court's refusal to quash the proceedings was therefore unsustainable.

Conclusion: The proceedings against the appellants were quashed and the challenge succeeded.

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