Court quashes Warrant of Arrest for non-compliance with Income Tax Act rule

The court found the Warrant of Arrest procedurally ultra-vires as it did not comply with the requirements of Rule 73(1) of the Income Tax Act, 1961. The court quashed the warrant, ordering the immediate release of the petitioner upon depositing the Passport before the Recovery Officer. Respondent No.1 was permitted to take further legal action if advised. The pending interlocutory application was dismissed, and the writ petition was disposed of, concluding the case.

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Issues:
1. Validity of the Warrant of Arrest dated 10.10.2018 issued in TRC.No.187/2017 (DCP No.9471/2016) in O.A.No.1074/2013 by Recovery Officer-I, Debts Recovery Tribunal-II, Bengaluru.

Analysis:
The petitioner challenged the validity of the Warrant of Arrest, arguing that the provisions of Rules 73 and 74 of the Income Tax Act, 1961 were not complied with before its issuance. The petitioner contended that the impugned Warrant of Arrest was procedurally ultra-vires.

The respondent, on the other hand, claimed that a notice was issued to the petitioner, asking him to appear before respondent No.1, which indicated compliance with the relevant provisions. The respondent argued that the petitioner was a defaulter, justifying the impugned order.

The court examined Rule 73(1) of Schedule II of the Act, which outlines the requirements for the arrest and detention of a defaulter. It mandates that no order for arrest shall be made without issuing a notice to show cause and satisfying specific conditions.

The court found that the notice dated 21.11.2017 did not meet the requirements of Rule 73(1) as it did not specifically ask the petitioner to show cause for potential detention in civil prison. Consequently, the court deemed the impugned order procedurally ultra-vires and quashed it, ordering the petitioner's immediate release on the condition of depositing the Passport before the Recovery Officer.

The court allowed respondent No.1 to proceed against the petitioner in accordance with the law if advised to do so. The pending interlocutory application was dismissed, and the writ petition was disposed of, concluding the legal proceedings.

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