Arc Associates vs. The Assistant Commissioner
Original PDF →Facts
The petitioner, ARC Associates, a proprietorship concern represented by its proprietor Madhava Bhandari, filed a writ petition before the High Court of Karnataka. The petitioner sought to quash an Order-in-Original (Order No.88/2021-22) passed by the Assistant Commissioner of Central Tax on March 30, 2022, pertaining to the period April 2015 to June 2017. Additionally, the petitioner prayed for a direction to the respondents to lift the attachment placed on its bank account with the Central Bank of India, Bengaluru, pursuant to a garnishee notice dated February 21, 2025, issued by the Assistant Commissioner for the recovery of outstanding penalty. The respondents are the Assistant Commissioner of Central Tax, the Superintendent of Central Tax, and the Principal Commissioner of Central Tax.
Held
The High Court allowed the petition. It quashed the impugned Order-in-Original dated March 30, 2022, passed by the Assistant Commissioner of Central Tax. The Court reasoned that the controversy was squarely covered by the judgment in M/s. Karnataka Chinmaya Seva Trust (supra). Following the precedent, the Court directed the respondents to lift the attachment placed on the petitioner's bank account immediately upon receipt of the order. The ratio decidendi is that where a Co-ordinate Bench of the High Court has already decided an issue, subsequent petitions with similar facts and issues should be disposed of in line with that precedent. The operative direction was to quash the Order-in-Original and lift the bank account attachment.
Key Issues
1. Whether the Order-in-Original passed by the Assistant Commissioner of Central Tax on March 30, 2022, for the period April 2015 to June 2017, is liable to be quashed? 2. Whether the attachment placed on the petitioner's bank account should be lifted? The petitioner contended that the Order-in-Original and the subsequent garnishee notice for recovery of penalty were illegal and sought their quashing and lifting of the attachment. The respondents, represented by counsel, presented their arguments. The Court noted that the issue was directly covered by a previous judgment of a Co-ordinate Bench of the same High Court in the case of M/s. Karnataka Chinmaya Seva Trust Vs. Joint Commissioner of Central Tax in WP No.11154/2023 & connected matters dated July 3, 2024.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL ORDER
In this petition, the petitioner seeks the following reliefs: “ i. Issue a writ of certiorari or any other writ as the Hon’ble Court may deem fit and quash the following:- ANNEXURE-H Impugned Order-In-Original passed by the Respondent No.1 on 30.03.2022 for the period April 2015 to June 2017 in Order No.88/2021- 22 and DIN:20220357YU0000000DCC ii. To issue the writ of mandamus or any other appropriate writ in the nature of mandamus writ, order or direction to the Respondent to lift the attachment placed on the bank account No. 1208870631 of the Petitioner maintained with Central Bank of India, Kamalanagar Branch, Bengaluru for recovery of the outstanding penalty payable in pursuance to garnishee notice dated 21.02.2025 issued by Respondent No.1 to Petitioner’s bank vide Annexure-M;
iii. To issue any other order(s), direction(s), writ(s) or any other relief(s) as this Hon’ble Court deems fit and proper in the facts and NC: 2025:KHC:14957 circumstances of the case and in the interest of justice; iv. For the cost of the present petition.”
Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.
Though several contentions have been urged by both sides in support of their respective claims, the issue in controversy between the parties is directly and squarely covered by the judgment of the Co-ordinate Bench of this Court in the case of M/s.Karnataka Chinmaya Seva No.11154/2023 & connected matters dated 03.07.2024, wherein it was held as under; "
Accordingly, the following: ORDER In light of observations made above, the writ petitions relating to challenge to show-cause notice, such matters will stand relegated to the officers to be designated in terms of the observations made in para 8 above, at the same NC: 2025:KHC:14957 stage. Accordingly, such of the petitions at Sl.No.1 to 5 in Column No.1 of the table relating to challenge to show-cause notice are disposed off. Insofar as such writ petitions as detailed in Column 2 of the table relating to challenge to Orders-in-Original, in light of the discussion made above, the Orders-in-Original stand set aside and the matters are relegated to the Officers to be designated to be reconsidered from the stage of show-cause notice. Accordingly, such of the petitions at Sl.No.1 to 35 in Column No.2 of the table relating to challenge to Orders-in-Original are disposed off. The petitioners who are now relegated before the authorities concerned are at liberty to file their pleadings within a reasonable time as may be fixed by the Officers concerned. Wherever the matters are pending in appeal in light of the arrangement that is made, petitioners to file a memo for withdrawal of appeal and accordingly, the orders- in-original in question would also receive the same treatment, i.e. be set aside as per the directions made above. Wherever demands have been made pursuant to the impugned orders, such proceedings are also set aside."
Under these circumstances, the present petition is also liable to be disposed of in terms of the aforesaid NC: 2025:KHC:14957 Order dated 03.07.2024 passed by this Court in W.P.No.11154/2023 and connected matters.
Accordingly, the following: ORDER (i) The petition is allowed. (ii) The impugned Order-in-original at Annexure – H dated 30.03.2022 is hereby quashed. (iii) Respondents are hereby directed to lift the attachment placed on the bank account No. 1208870631 of the petitioner maintained with Central Bank of India, Kamalanagar Branch, Bengaluru for recovery of the outstanding penalty payable in pursuance to garnishee notice dated 21.02.2025 issued by Respondent No.1 to Petitioner’s bank vide Annexure-M, immediately upon receipt of copy of this order. (S.R.KRISHNA KUMAR) JUDGE
sac List No.: 1 Sl No.: 78
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.