Petitioner Pays Rs. 75 Lakhs, Attachment Order Lifted, Department Prohibited from Further Pursuit

The High Court ordered the petitioner to pay the outstanding amount of Rs. 75 lakhs to the Tax Recovery Officer towards the dues of DPS Commodities. The attachment order on the petitioner's bank account was lifted upon payment of this sum, and the department was prohibited from pursuing the petitioner for any further dues, thus conclusively resolving the matter.

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Issues:
Challenge to notice issued by Tax Recovery Officer under section 226(3) of the Income Tax Act.
Dispute regarding the amount due from the petitioner to a creditor for income tax dues.
Validity of the attachment order on the petitioner's bank account.
False declaration made by the petitioner regarding the amount owed to the creditor.
Resolution of the matter and lifting of the attachment order.

Analysis:

1. The petitioner challenged a notice issued by the Tax Recovery Officer under section 226(3) of the Income Tax Act, claiming that they were not served with the notice initially and only became aware of it when one of their cheques was returned due to the attachment of their bank account. The petitioner denied owing any money to the creditor mentioned in the notice, DPS Commodities.

2. The High Court, in an interim order, noted the petitioner's contentions and grievances, stating that the petitioner had no substantial connection with DPS Commodities beyond normal business relations. The attachment order on the petitioner's bank account was stayed temporarily.

3. The department contended that the petitioner had borrowed and repaid a total of Rs. 2 crores from DPS Commodities, with the last installment of Rs. 75 lakhs being repaid after the attachment order. The High Court expressed displeasure at the petitioner's false declaration in an affidavit that no money was owed to DPS Commodities when in fact Rs. 75 lakhs was due and was only repaid after the order.

4. Despite the petitioner's repayment from another unattached account, the High Court emphasized that the petitioner was fully aware of the attachment order and the amount owed. The Court highlighted the petitioner's false declaration and the fact that the department could not recover the amount due to the repayment from a different account.

5. The High Court ordered the petitioner to pay the outstanding amount of Rs. 75 lakhs to the Tax Recovery Officer towards the dues of DPS Commodities. The attachment order was to be lifted upon payment of this sum, and the department was barred from pursuing the petitioner for any further dues. The petition was disposed of, resolving the matter conclusively.

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