Writ challenge to interest on delayed tax payment under DRC-01 after recovery began; petition dismissed, 20% deposit ordered.

The dominant issue was whether a writ could be entertained to challenge interest liability for belated tax payment under a DRC-01 show cause notice after recovery proceedings had been initiated. The HC held that the petitioner approached the Court only after commencement of recovery and therefore was not entitled to the writ relief sought; consequently, the writ petition was liable to be dismissed. However, since the petitioner's bank account had been attached, the HC directed deposit of 20% of the disputed amount in cash within one month, conditional upon the pending statutory appeal not having already been dismissed, and disposed of the petition on those terms.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the writ petition challenging confirmation of interest liability for belated tax payment deserved to be entertained when filed after initiation of recovery proceedings and long after the impugned order.

(ii) Whether, notwithstanding dismissal of the writ on the relief sought, the Court should grant conditional protection against recovery (including bank account attachment) pending disposal of a statutory appeal that was filed, acknowledged, and not shown to have been decided.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Entertainability of writ challenge to the interest confirmation order in view of delay and recovery-stage approach

Interpretation and reasoning: The Court examined the timing of the writ petition and noted that the petitioner approached the Court only after recovery proceedings were initiated, filing the writ substantially later than the impugned order confirming interest liability. On this factual assessment, the Court held that the writ petition was liable to be dismissed "for the relief sought for," treating the delayed, recovery-stage challenge as a sufficient ground to deny the principal writ relief.

Conclusion: The Court declined to entertain the writ challenge to the impugned interest confirmation order and held the writ to be dismissible insofar as the primary relief was concerned.

Issue (ii): Conditional relief pending disposal of the statutory appeal and consequential lifting of bank attachment

Interpretation and reasoning: The Court took note of (a) an appeal having been filed and acknowledged, with no indication on record that it had been disposed of, and (b) the petitioner's bank account having been attached. Balancing these circumstances, the Court directed a conditional course: the petitioner was required to deposit 20% of the disputed amount in cash within one month, provided the pending appeal had not already been dismissed. Upon such compliance, the Appellate Authority was directed to decide the appeal on merits expeditiously and in accordance with law. The Court further ordered that, subject to compliance, the bank attachment would stand lifted/vacated and any excess amount paid or recovered would be refunded subject to the final outcome of the appeal. Conversely, non-compliance would entitle the revenue to proceed with recovery as if the writ had been dismissed in limine. The Court also clarified that if the appeal had already been dismissed, the petitioner could pursue remedies available in law against the appellate order.

Conclusion: While not granting the substantive writ relief, the Court disposed of the petition by granting conditional protection linked to a 20% deposit, directing expeditious appellate adjudication, lifting the bank attachment upon compliance, permitting refund of excess subject to appellate outcome, and allowing recovery to proceed in case of default.

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