COCA COLA INDIA PRIVATE LIMITED vs. THE DEPUTY COMMISSIONER OF INCOME-TAX AND ORS.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL APPELLATE JURISDICTION CIVIL APPELLATE JURISDICTION WRIT PETITION NO.652 OF 2007 WRIT PETITION NO.652 OF 2007 WRIT PETITION NO.652 OF 2007 Coca Cola India Pvt. Ltd., a Company ) incorporated under the Companies Act, ) 1956 and having its registered office ) at Plot No.1109-1110, Pirangut, Tal. ) Mulshi, Pune - 412 108. )..Petitioner. V/s. 1) The Deputy Commissioner of ) Income-tax, having office at ) Range 1, Pune "A" Wing, 2nd ) Floor, PMT Building, Shankar ) Sheth Road, Swargate, ) Pune - 411 037. ) ) 2) The Commissioner of Income-tax-I, ) having office at Range 1, Pune ) "A" Wing, 2nd Floor, PMT ) Building, Shankar Sheth Road, ) Swargate, Pune - 411 037. ) ) 3) The Union of India, having its ) office at Aaykar Bhavan, Marine ) Lines, Mumbai. ) ) 4) Citibank NA having its office at ) Bombay Mutual Building 293, D.N. ) Road, Fort Branch, Mumbai-411 001.) ) 5) Bank of Maharashtra having its ) Office at Sindh Society Branch, ) Aundh, Pune -07. ) ) 6) ABN Amro Bank NV having its ) branch office at 327, M.G. Road, ) Pune - 411 007. ) ) 7) ABN Amro Bank NV having its ) branch at DLF Centre, Sansad ) Marg, New Delhi. ) ) 8) ICICI Bank Limited having its ) branchy office at Shangrila ) Garden, Bund Garden Road, ) Pune - 01. )..Respondents. CNR No : HCBM010026482007 Uploaded on - 22/08/2020 Downloaded on - 28/10/2026 06:15:48

-= : 2 : =- Mr.Soli Dastoor, senior counsel with R.Murlidhar and Arun Siwach i/b. Amarchand & Mangaldas & Suresh A. Shroff & Co. for petitioner. Mr.A.S.Kotangale for respondent Nos.1 & 2. Mr.K.R.Bujle for respondent No.4. Mr.S.R.Srinivas i/b.Puranik & Co. for respondent No.8. Mr.Abhinay Kumbhar, Noticee in person present. CORAM : F.I.REBELLO CORAM : F.I.REBELLO CORAM : F.I.REBELLO AND AND AND J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. DATED : 25TH JULY, 2007. DATED : 25TH JULY, 2007. DATED : 25TH JULY, 2007.

ORAL JUDGMENT (PER J.P.DEVADHAR, J.) ORAL JUDGMENT (PER J.P.DEVADHAR, J.) ORAL JUDGMENT (PER J.P.DEVADHAR, J.) 1. This petition is filed basically to challenge the orders passed by the Dy. Commissioner of Income Tax and the Commissioner of Income Tax whereby the application of the petitioner seeking stay of recovery of the penalty levied in assessment years 1999-2000, 2000-01 and 2001-02 has been rejected and the bank accounts of the petitioner have been attached. Since the stay order passed by the I.T.A.T. has been ultimately implemented, the petitioner is not pressing the petition to that extent. However, the petitioner strongly objects to the high handed action of Shri Abhinay Kumbhar, Dy. C.I.T., Circle I (1), Pune, presently working as Dy.Director of Income Tax (INV) (I) Pune in recovering the amounts lying in the bank Uploaded on - 22/08/2020 Downloaded on - 28/10/2026 06:15:48

-= : 3 : =- accounts of the petitioner by way of demand drafts in spite of the fact that the recovery has been stayed by the I.T.A.T., Pune. 2. The penalties levied upon the petitioner under section 271(1) (c) of the Income Tax Act, 1961 relating to the assessment years 1999-00, 2000-01 and 2001-02 were the subject matter of appeals before I.T.A.T., Pune. Admittedly, at about 4.00 p.m. on 19/1/2007, Shri Abhinay Kumbhar came to know from a letter dated 19/1/2007 addressed by Dy. C.I.T. (I.T.A.T.), Pune to the effect that the I.T.A.T. Pune had directed that till the next date of hearing viz. 2/2/2007 no coercive action should be taken by the assessing officer to recover the outstanding demand from the petitioner, otherwise it will be treated as contempt of Court. 3. It is pertinent to note that the bank accounts of the petitioner were attached by Shri Abhinay Kumbhar on 19/1/2007. On coming to know that the I.T.A.T., Pune has stayed the recovery, Shri Abhinay Kumbhar addressed a letter to the petitioner’s bankers on 19/1/2007 stating therein that the balance amount lying in the petitioner’s account be remitted and further stated that the attachment levied on the petitioner’s Uploaded on - 22/08/2020 Downloaded on - 28/10/2026 06:15:48

-= : 4 : =- account stands lifted with immediate effect. It is not in dispute that it is only after collecting the demand draft from the petitioner’s bankers at about 6.55 p.m. on 19/1/2007 the aforesaid letter of Shri Abhinay Kumbhar dated 19/1/2007 was handed over to the petitioner’s bankers. 4. From the tenure of the letter dated 19/1/2007 addressed to the petitioner’s bankers, it is evident that Shri Abhinay Kumbhar was determined to enforce the demand in spite of he being aware that the recovery of the demand raised against the petitioner has been stayed by the I.T.A.T., Pune. 5. By an order dated 19/10/2005 passed in Appellate Side Writ Petition No.7072 of 2005 we had deprecated the conduct of Shri Abhinay Kumbhar in rejecting similar application filed by the petitioner seeking stay of recovery of tax ignoring the parameters laid down by this Court in the case of KEC KEC KEC International Ltd. V/s. B.R. Balkrishnan International Ltd. V/s. B.R. Balkrishnan International Ltd. V/s. B.R. Balkrishnan reported in 251 I.T.R. 158 251 I.T.R. 158 251 I.T.R. 158 and purporting to attach the bank accounts of the petitioner even before communicating the order passed by him rejecting the stay application filed by the petitioner. Uploaded on - 22/08/2020 Downloaded on - 28/10/2026 06:15:48

-= : 5 : =- 6. In spite of the warning given in the aforesaid order, Shri Abhinay Kumbhar has once again sought to enforce the demand and recover the amount from the bank account of the petitioner despite the knowledge that the recovery has been stayed by the I.T.A.T., Pune. Shri Abhinay Kumbhar in his affidavit duly affirmed on 20/7/2007 has stated that he has neither flouted nor had any intention to flout the order of I.T.A.T. and further stated that as the demand draft received from the petitioner’s bankers has not been encashed, his unconditional apology be accepted and proceedings be dropped. We are not impressed by the said affidavit, in the light of the events narrated hereinabove. 7. In these circumstances, we direct the concerned Disciplinary Authority to hold a preliminary inquiry against Shri Abhinay Kumbhar, presently working as Dy. Director of Income Tax (INV) (I), Pune regarding his conduct in enforcing the demand by collecting the amounts from the bank account of the petitioner by way of demand drafts despite the knowledge that the recovery was stayed by the I.T.A.T., Pune on 19/1/2007 and if it prima facie came to the finding that there is misconduct, to take suitable action in law which is permissible. A report of the enquiry be submitted to this Court within 6 weeks from Uploaded on - 22/08/2020 Downloaded on - 28/10/2026 06:15:48

-= : 6 : =- today. 8. Mr.Kotangale, learned counsel for the revenue is directed to communicate this order to the concerned Disciplinary Authority immediately. 9. Since the matter is pending before the I.T.A.T., we are not expressing any opinion on the merits of the case. The Writ Petition is disposed of in the above terms, however, the petition be placed on board before us on 10/9/2007 for perusal of the compliance report. 10. At this stage, Mr.Kotangale orally applies for stay of the order. Application is rejected. (F.I.REBELLO, J.) (F.I.REBELLO, J.) (F.I.REBELLO, J.) (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.)

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