M/S JINDAL STEEL AND POWER LTD vs. ASSISTANT COMMISSIONER OF INCOME TAX, HISAR CIRCLE & ANR

Facts

The petitioner, M/s Jindal Steel & Power Ltd., is challenging Garnishee Notices dated 13.02.2014 and 20.03.2014 issued by the Assistant Commissioner of Income Tax, Hisar. These notices were addressed to the Managing Director of Chhattisgarh State Power Distribution Co.Ltd. and the Chairman-cum-Managing Director of Bharat Heavy Electricals Ltd. for the recovery of Rs.28,21,94,177/-. This amount represents income tax, penalty, and interest levied on the petitioner for the assessment year 2008-2009. The petitioner had filed an appeal before the Income Tax Appellate Tribunal against an order under Section 263 of the Income Tax Act, 1961. Subsequently, further orders were passed under Section 143(3)/263 and Section 271(1)(C)/143(3)/263 of the Act. The petitioner's stay application before the Commissioner of Income Tax (Appeals) was declined, leading to the issuance of the Garnishee Notices.

Held

The High Court declined to interfere in the matter, holding that the petitioner admittedly has an alternative remedy to approach the Income Tax Appellate Tribunal. The Court disposed of the writ petition with a direction to the Commissioner of Income Tax (Appeals) to supply a copy of the appellate order passed in the penalty matter within two days. This would enable the petitioner to approach the Income Tax Appellate Tribunal or any other appropriate forum. The Court did not decide on the merits of the Garnishee Notices or the underlying tax demand, focusing solely on the availability of alternative remedies. The issue of whether the petitioner's appeal against the penalty order had been dismissed or disposed of by the CIT(A) was noted as a fact not disclosed in the writ petition but was not adjudicated upon.

Key Issues

1. Whether the High Court should entertain a writ petition when the petitioner has an alternative remedy of appeal before the Income Tax Appellate Tribunal, particularly concerning the Garnishee Notices issued for recovery of tax, penalty, and interest for assessment year 2008-2009. Assessee's Contention: The petitioner is impugning the Garnishee Notices and argues that these notices were issued with the intent to pre-empt the petitioner from availing statutory remedies of appeal. The petitioner had approached the High Court after its stay application was declined and before receiving the order on its appeal concerning the penalty. Revenue's Contention: The judgment does not explicitly record any specific arguments made by the revenue. However, the context implies that the revenue was pursuing recovery of the tax demand through the Garnishee Notices.