Delhi High Court
Blueblood Ventures Limited vs Deuty Commissioner Of Income Tax on 24 May, 2021
$~20
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 24.05.2021
+ W.P.(C) 5460/2021
BLUEBLOOD VENTURES LIMITED ..... Petitioner
Through: Mr. Rohit Bohra, Advocate.
versus
DEPUTY COMMISSIONER OF INCOME TAX ..... Respondent
Through: Mr. Sanjay Kumar with Ms. Easha
Kadiyan, Advocates.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MR. JUSTICE TALWANT SINGH
[Court hearing convened via video-conferencing on account of COVID-19]
RAJIV SHAKDHER, J.: (ORAL)
1. Issue notice.
1.1. Mr. Sanjay Kumar, who appears on advance notice, on behalf of the
respondent/revenue, accepts service.
2. Mr. Kumar says that, he does not wish to file a counter-affidavit in the
matter, in view of the directions that we propose to pass.
2.1. Accordingly, with the consent of the parties, the writ petition is taken
up for hearing and final disposal, at this stage itself.
3. Briefly, the backdrop in which the petitioner has approached this
court by way of the instant writ petition is, as follows:
3.1. It is the petitioner's case that it owed monies to an entity, going by the
name, Shridham Distributors Private Limited [in short 'SDPL']. According
to the petitioner, the debt owed to SDPL was defrayed, by transferring Zero
Signature Not Verified
Digitally Signed W.P. (C) 5460/2021 Page 1 of 4
By:VIPIN KUMAR RAI
Signing Date:27.05.2021
13:26:28
Coupon Optionally Convertible Debentures [in short 'ZOCD'] of another
entity, namely Devoted Construction Limited, amounting to
Rs.21,37,00,000/-. This transaction, the petitioner avers, was completed on
28.03.2019.
3.2. According to the petitioner, as on 01.04.2019, it owed nothing to
SDPL. It is, therefore, the petitioner's case that, on 01.04.2019, a letter was
addressed by the petitioner to SDPL to obtain balance confirmation.
3.3. The respondent/revenue, however, issued a garnishee notice, dated
07.02.2020, under Section 226(3) of the Income Tax Act, 1961 [in short 'the
Act']. Via this notice, the respondent/revenue called upon the petitioner, to
remit the amount owed by it to SDPL.
3.4. The petitioner claims that, in response to the garnishee notice dated
07.02.2020, a communication dated 19.02.2020 was addressed to the
respondent/revenue. It is the petitioner's case that, in the said
communication, it, inter alia, indicated that as on 01.04.2019 nothing was
owed by it to SDPL.
3.5. The respondent/revenue, however, did not stop with the issuance of
the garnishee notice dated 07.02.2020. The respondent/revenue, thereafter,
issued a notice dated 13.03.2020 under Section 226(3) of the Act to the
petitioner's banker [i.e. South Indian Bank Ltd.], directing the said bank to
freeze the petitioner's current account bearing number 358073000002442.
3.6. It appears, thereafter, the petitioner, vide communication dated
10.06.2020, addressed to the respondent/revenue, reiterated the stand, which
was taken by it, as noticed above, on 19.02.2020.
3.7. The aforesaid communication was followed, by the petitioner, by a
letter dated 22.07.2020 to the respondent/revenue. With this letter, in
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Digitally Signed W.P. (C) 5460/2021 Page 2 of 4
By:VIPIN KUMAR RAI
Signing Date:27.05.2021
13:26:28
compliance with Section 226(3)(vi) of the Act, the petitioner submitted a
statement on oath, wherein it reiterated its earlier stand, which is, that, as on
01.04.2019, the petitioner's account with SDPL stood settled.
3.8. Since there was no movement in the matter, on 26.11.2020, the
petitioner once again approached the respondent/revenue for lifting the
freeze order qua its aforementioned bank account.
4. In these circumstances, the petitioner has approached this court.
5. According to us, the respondent/revenue needs to hear the petitioner
and thereafter, pass a speaking order, given the stand taken by the petitioner
that, as on 01.04.2019, its account with SDPL stood settled. The
respondent/revenue needs to reach a finding, as to whether or not the
petitioner owes any amount to SDPL.
5.1. Needless to add, if the petitioner does not owe any amount to SDPL,
the impugned notices will have to be recalled. Continuance of the order
directing a freeze on the petitioner's bank account, without reaching a
finding, is obviously detrimental to the petitioner's interest.
5.2. Therefore, the writ petition is disposed of with the direction to the
respondent/revenue, to treat the instant writ petition as a representation, and
pass a speaking order, albeit, as per law.
5.3. Before passing the said order, the respondent/revenue will hear the
authorised representative of the petitioner. For this purpose, in view of the
fact that the pandemic is on, the respondent/revenue will take recourse to the
video-conferencing [VC] mechanism. The respondent/revenue will fix a date
and time for according the hearing, and in this behalf, will give prior notice
of at least three days, to the petitioner. The respondent/revenue will also
send a VC link to the authorised representative of the petitioner, to enable
Signature Not Verified
Digitally Signed W.P. (C) 5460/2021 Page 3 of 4
By:VIPIN KUMAR RAI
Signing Date:27.05.2021
13:26:28
hearing in the matter.
5.4. Since the impugned notices were issued more than a year ago, the
respondent/revenue will complete the aforesaid exercise within the next four
weeks.
6. The writ petition is disposed of in the aforesaid terms.
RAJIV SHAKDHER, J.
TALWANT SINGH, J.
MAY 24, 2021
tr/sh
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Signature Not Verified
By:VIPIN KUMAR RAI
Signing Date:27.05.2021
13:26:28
