TAMILNAD MERCANTILE BANK LTD. vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

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WP(C)/13530/2017HC KeralaKLHC01061477201712 February 2019Author: HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU4 pages
AI SummaryDisposed of

What did the High Court hold?

The High Court noted the submission made by the learned Standing Counsel for the respondent Department that the provisional attachment against the petitioner's secured assets no longer subsists. The Court accepted this submission. Regarding the petitioner's request for intimation to the registration authorities about the ceased attachment, the Court directed that the petitioner could produce a copy of the judgment before them as a judicial assertion that no attachment is in force. Consequently, the writ petition was disposed of on these submissions.

What were the facts?

The petitioner, Tamilnad Mercantile Bank Ltd., filed a writ petition challenging a provisional attachment made under Section 281B of the Income Tax Act. The bank contended that the attachment had continued beyond the statutory period of two years. The bank also referred to Section 31B of the SARFAESI Act, arguing that the prolonged attachment was unsustainable. The respondent, Assistant Commissioner of Income Tax, through its Standing Counsel, submitted that the attachment had ceased by efflux of time and no attachment, provisional or otherwise, was in force even before the writ petition was filed. The petitioner then requested the respondent to inform the registration authorities about the cessation of the attachment.

What were the issues?

1. Whether the provisional attachment under Section 281B of the Income Tax Act, which allegedly continued beyond two years, is sustainable? (Question of law) Assessee's Contention: The petitioner bank argued that the provisional attachment under Section 281B of the Income Tax Act, if it continued beyond the statutorily permitted period of two years, could not be sustained. They also invoked Section 31B of the SARFAESI Act to support their contention against prolonged attachment. Revenue's Contention: The respondent, through its Standing Counsel, fairly submitted that the attachment had ceased by efflux of time and that no attachment, provisional or otherwise, was subsisting even prior to the filing of the writ petition.

Which sections of the Income-tax Act were involved?

Section 281B,Section 31B

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU TUESDAY ,THE 12TH DAY OF FEBRUARY 2019 / 23RD MAGHA, 1940 WP(C).No. 13530 of 2017 PETITIONER: TAMILNAD MERCANTILE BANK LTD. REPRESENTED BY ITS CHIEF MANAGER,ERNAKULAM BRANCH, AND POWER OF ATTORNEY HOLDER,K. VENKADESAN, S/O.KUMARA SWAMY,D.NO. 64/3334 A, CHITTOOR ROAD,KACHERIPADY, ERNAKULAM, KOCHI 682018 BY ADV. SRI.V.V.SURENDRAN RESPONDENT/S: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 2 (2) CR BUILDING,IS PRESS ROAD, KOCHI 682018 2 V.P. RASHEED M/S.E ORIENTAL TIMERS,KAVYA MAHAL, OPP. CHAITHANYA MARBLES,N.H. BYE PASS, EDAPPALLY 682024 BY ADVS. SRI.M.T.AJITH SMT.SAJITHA GEORGE SRI.SHAIJAN C.GEORGE OTHER PRESENT: SC SRI. CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 12.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.13530 of 2017 2

JUDGMENT The petitioner bank suffered provisional attachment under Section 281B of the Income Tax Act. Contending that the attachment continued beyond two years—that is, the statutorily permitted period— the petitioner has filed this writ petition.

2.

The petitioner's counsel has brought to my notice not only Section 281B of the Income Tax Act but also Section 31B of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (the SARFAESI Act). Thus he contends that the prolonged provisional attachment cannot be sustained.

3.

The learned Standing Counsel has, however, fairly submitted that the attachment, by efflux of time, ceased long back. According to him, there had been no attachment, provisional or otherwise, even before the petitioner filed this writ petition.

4.

In this context the petitioner's counsel wants the respondent Department to intimate the registration authorities about the ceased attachment. Under these circumstances, I record the submissions made by the learned Standing Counsel for the respondent Department that the WPC No.13530 of 2017 3 provisional attachment against the petitioner's secured assets no longer subsists. As to the intimation to the registration authorities, the petitioner can produce a copy of this judgment before them as a judicial assertion that there is no attachment in force. Thus, the writ petition stands disposed of. DAMA SESHADRI NAIDU JUDGE

WPC No.13530 of 2017 4

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE PROVISIONAL ATTACHMENT ORDER DATED 27.11.2013 EXHIBIT P2 A TRUE COPY OF THE PROVISIONAL ATTACHMENT ORDER DATED 27.11.2013 EXHIBIT P3 A TRUE COPY OF THE PROVISIONAL ATTACHMENT ORDER DATED 27.11.2013 EXHIBIT P4 A TRUE COPY OF THE PROVISIONAL ATTACHMENT ORDER DATED 27.11.2013 EXHIBIT P5 A TRUE COPY OF THE PROVISIONAL ATTACHMENT ORDER DATED 27.11.2013 EXHIBIT P6 TRUE COPY OF THE LETTER ISSUED BY THE PETITIONER DATED 24.12.2013 EXHIBIT P7 TRUE COPY OF THE COMMUNICATION EXTENDING ATTACHMENT DATED 22.07.2014 EXHIBIT P8 TRUE COPY OF THE REPRESENTATION BY 2ND RESPONDENT TO THE DIRECTOR GENERAL OF INCOME TAX DATED 14.08.2014 EXHIBIT P9 A TRUE COPY OF THE REPRESENTATION BY 2ND RESPONDENT TO COMMISSIONER OF INCOME TAX DATED 14.08.2014 EXHIBIT P10 TRUE COPY OF THE EXTENSION ORDER DATED 26.05.2015 EXHIBIT P11 TRUE COPY OF THE PROVISIONAL ATTACHMENT ISSUED BY DEPUTY COMMISSIONER OF INCOME TAX DATED 23.03.2015 Css/

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