High Court Declines Intervention in Income Tax Recovery Amid Pending Tribunal Proceedings

The Gauhati High Court dismissed a writ petition filed by the Assam Co-operative Apex Bank Ltd, which had challenged income tax recovery orders demanding about Rs. 4,63,06,10,541 for the assessment year 2022-23.

The bank had also sought protection from coercive recovery steps, including possible attachment of its bank accounts.

The bank argued that it is a cooperative institution serving nearly 10 lakh depositors, mostly from economically weaker sections, and that freezing its accounts would severely affect public interest. It further submitted that its appeal is already pending before the Income Tax Appellate Tribunal along with a stay application, and therefore, recovery action should be kept on hold.

It was also argued on behalf of the bank that the Tribunal is not sitting regularly, due to which it had approached the High Court seeking urgent relief. The bank contended that immediate recovery of such a huge demand, which is stated to be far higher than its net worth, would seriously impact its functioning and financial stability.

On the other hand, the Department argued that the High Court should not entertain the writ petition.

After hearing both sides, the High Court held that the petitioner had already approached the appropriate statutory forum, and therefore, there was no justification for invoking writ jurisdiction.

The Court stated that “the plea that the Tribunal is not sitting regularly cannot justify interference by this court in a matter that is sub judice before a competent statutory forum, particularly when the Tribunal is stated to be functional.”

Finally, the Court dismissed the writ petition but directed that the ITAT should take up and decide the pending stay application expeditiously.