JUDGMENT [ENTITY], J.
1. This appeal is directed against an order dated August 28, [SECTION]0[SECTION], passed by the learned single judge disposing of W. P. No. 941 of [SECTION]0[SECTION] (see . The writ petitioner/appellant-[ENTITY] ([ENTITY]) had assailed the notices issued under [SECTION] of the [ACT] ("the Act"), against the Andhra Pradesh Beverages Corporation Limited (APBCL) as debtor of [ENTITY], the garnishee against whom a notice under [SECTION] of the Act was issued, seeking to recover the tax due and payable by Visisth Chay Vyapar Limited (VCVL) in respect of the amount due and payable by [ENTITY], the garnishee to VCVL, the decree-holder, pursuant to a decree obtained by the latter against the former.
2. The case has a chequered history. A brief reference to the facts would be of great assistance to understand the situation and follow the erudite arguments advanced respectively by Mr. [ENTITY], senior counsel for the appellants, Mr. [ENTITY], Additional Solicitor General for the Income-tax Department, and Mr. [ENTITY], senior advocate for VCVL.
Facts :
[SECTION]. It appears that [ENTITY] obtained a loan from the decree-holder, VCVL. This loan, reflected in the return of [ENTITY], was held to be a sham transaction and was assessed and charged to income-tax in the assessment of income of [ENTITY] made by the income-tax authority at Calcutta. The tax payable on the said loan amount held to be an income of the assessee/appellant was being recovered from the appellant, [ENTITY], in instalments. Claiming to recover the said loan amount since held to be a sham transaction, the VCVL filed a suit against [ENTITY]. This suit was decreed. The decree-holder, VCVL, was assessed in respect of its own income. The tax payable by the decree-holder, VCVL, was sought to be recovered by the income-tax authority at Delhi where VCVL was assessed. VCVL, the decree-holder, offered the decree obtained by it against the appellant, [ENTITY], for recovery of the income-tax payable by VCVL. After a certificate was drawn up against VCVL, the Tax Recovery Officer (TRO) at Delhi through a notice under [SECTION] of the Act sought to recover the tax payable by the decree-holder, VCVL, from the appellant, [ENTITY], pursuant to the said decree. It appears that some amount has since been recovered from [ENTITY] pursuant to the notice under [SECTION]. Series of litigations ensued. [ENTITY] was all along objecting to the realisation under [SECTION]. However, the balance amount was again sought to be recovered from the debtors of [ENTITY], particularly from APBCL through a notice under [SECTION], which has since been challenged in the writ petition out of which the appeal arises. On an earlier occasion challenging the notice under [SECTION] issued upon [ENTITY], this court had observed as to whether [SECTION] could be applicable having regard to the facts and circumstances of the case or not should be determined by the Tax Recovery Officer. After this order, the Tax Recovery Officer determined that [SECTION] is applicable in the present case. Against this order, W. P. No. 941 of [SECTION]0[SECTION] was moved.
4. The learned single judge in the order dated August 28, [SECTION]0[SECTION] (see , disposing of W. P. No. 941 of [SECTION]0[SECTION] was pleased to observe that the provisions of [SECTION] do not apply against the debtor of the garnishee, inasmuch as upon default of the garnishee, he may be proceeded against under [SECTION] without [SECTION] as has been expressly provided by the Legislature in [SECTION]. But, however, the learned single judge was pleased to observe that this notice under [SECTION] issued to APBCL was, in fact, a notice of attachment with an intimation to APBCL pursuant to which the APBCL may pay the attached amount to the Tax Recovery Officer. The learned single judge was further pleased to grant liberty to the Tax Recovery Officer to intimate APBCL that if the attached amount is not paid within the specified time, the Tax Recovery Officer shall take steps to sell the attached debt.
Submissions on behalf of the appellant :
5. Mr. [ENTITY] had assailed this judgment on various grounds : (1) [SECTION] cannot be proceeded with when the garnishee [ENTITY] has disputed the liability under the decree since put to execution, the stay whereof has been asked for and granted in the appeal against the decree filed by [ENTITY], in view of [SECTION] Assuming but not admitting that [SECTION] is maintainable against [ENTITY], even then on account of default of [ENTITY], the Tax Recovery Officer cannot exercise his power under [SECTION] against the garnishee/debtor of the garnishee [ENTITY] in view of the express provision contained in [SECTION]. In support of this contention, Mr. [ENTITY] relied on Smt. [ENTITY] v. Asst. CIT ; ([SECTION]) [SECTION] contemplates recovery of tax in default by a garnishee in the manner prescribed in [SECTION] and not in the manner provided under [SECTION] since expressly omitted by the Legislature in the clause itself ; (4) Except as provided in the Act and the Rules, no step can be taken to recover the dues as against the debtor of the garnishee even if the provisions seem to be ambiguous, inasmuch as a tax statute is to be interpreted in case of ambiguity in favour of the assessee. To support this contention, he relied on Union of India v. [ENTITY] ; (5) An act or thing prescribed to be done in a particular manner in the statute has to be done in that particular manner as prescribed and no other. To support this contention, he relied on [ENTITY] v. King-Emperor , since followed in [ENTITY] v. Mahavir Prasad ; (6) When one officer of the same department has held the transaction to be a sham transaction, another officer of the same Department is bound by the decision in respect of the transaction since held to be sham and, therefore, cannot proceed to recover the amount out of a decree obtained in respect of the same transaction held to be sham by the Department. To support this contention, he relied on [PRECEDENT] followed in [PRECEDENT], ; [PRECEDENT] and [PRECEDENT], [PRECEDENT] ; (7) The dispute with regard to the claim is apparent from the pendency of the appeal, grant of stay in the appeal is immaterial, stay against execution closes the chapter under [SECTION] and pendency of the appeal takes away the collusiveness of the decree though execution may not be resisted since the execution is available only to the decree-holder. In support he relied on [PRECEDENT], ; [PRECEDENT] , where it was held that an appeal is a continuation of the suit and on appeal the whole matter is at large ; (8) The attachment contemplated in [SECTION] refers to the debt payable by the garnishee not by the debtor of the garnishee. The Tax Recovery Officer cannot proceed against the debtor of the garnishee on the strength of the notice under [SECTION] issued against the garnishee on the basis of the certificate drawn up against the assessee ; (9) Even if any attachment is to be effected then a 15 days notice in terms of [SECTION] for recovery of tax due as prescribed in the [SECTION] of the Act is to be given and then a warrant under [SECTION] is required to be issued for effecting attachment in terms of [SECTION] thereof ; (10) The attachment contemplated in [SECTION], refers to the debt due to the defaulter as contemplated in [SECTION] of the [SECTION] since defined in [SECTION] meaning the assessee mentioned in the certificate ; (11) Under [SECTION] the jurisdiction of the Tax Recovery Officer is confined only to the adjudication as to the genuineness of the claim and excepting falsity of the claim it cannot proceed under [SECTION] and then again the recovery is limited to the amount mentioned in the certificate. In support he relied on [PRECEDENT] and [PRECEDENT] , which followed [PRECEDENT] ; (12) The law being crystal clear the court could not convert a notice under [SECTION] issued to the debtor of the garnishee as a notice of attachment of debt not contemplated in Clause (x) thereof nor can it direct nor can it grant liberty either to the debtor of the garnishee to pay or to the Tax Recovery Officer to sell the debt in default nor can it direct the Tax Recovery Officer to act in a particular manner in exercise of its jurisdiction since it would amount to an action intended to land the court in the shoes of the Tax Recovery Officer, a quasi-judicial authority having its independent discretion within the scope and ambit of the statute that empowered him to take such action. On these grounds, Mr. [ENTITY] submits that the appeal should be allowed and the recovery under [SECTION] should be stayed, the judgment and order appealed against should be set aside to the extent it has treated the notice as one for attachment refusing to quash the same and granted liberty to the debtor of the garnishee to pay and to the Tax Recovery Officer to intimate the debtor of the garnishee in default of the payment within the time stipulated, the debt would be sold, and to sell the debt, as well as the recovery from the appellant garnishee [ENTITY] on the basis of the decree obtained by VCVL under [SECTION].
Submissions on behalf of the Income-tax Department :
6. Mr. [ENTITY], Additional Solicitor General, on the other hand, had sought to support the judgment and contend that, (1) the definition of "assessee" defined in [SECTION] of the Act includes an assessee in default. [SECTION], in default of compliance with the notice under [SECTION], makes the garnishee an assessee in default and as such [SECTION] can be applied against the debtor of the garnishee as soon the garnishee becomes an assessee in default ; (2) In terms of [SECTION] as soon there is a failure to pay within the time mentioned in the notice under [SECTION], the assessee shall be deemed to be in default. As soon a notice of demand is issued under [SECTION] to any person mentioned in the notice, such person has to pay the amount within the time stipulated in the notice, in default such person should be liable to pay interest [[SECTION] prescribes for imposition of penalty on the assessee in default in the circumstances specified therein. It is the question of recovery of tax due from the assessee and the question is to be looked into on the basis of harmonized construction of the entire scheme of the statute without confining oneself within the expression used in a particular portion of the enactment ; (4) [SECTION] empowers the Tax Recovery Officer to recover tax in any of the modes mentioned in [SECTION] in accordance with the rules laid down in the [SECTION], which includes attachment and sale of the assessee's movable property and attachment and sale of the assessee's immovable property. Since the definition of "assessee" provided in [SECTION] includes an assessee in default, non-compliance with the notice under [SECTION] makes the garnishee an assessee in default attracting the mischief of [SECTION]. [SECTION] empowers the Tax Recovery Officer to recover the amount under [SECTION] as if the due is a certificate due in the manner prescribed. Admittedly, VCVL was in default and it has offered the decree against [ENTITY] for recovery and, therefore, there is no bar in recovering the amount from [ENTITY] pursuant to the decree even to the extent of attachment of the debt payable by the debtor of the garnishee [ENTITY] ; (5) In this case a certificate has already been issued against the assessee VCVL, which satisfies the test for proceeding to recover the amount pursuant to such certificate against the garnishee as well as the debtor of the garnishee ; (6) [SECTION] prescribed that where a certificate has been drawn up under [SECTION], the Tax Recovery Officer may without prejudice to the modes of recovery specified in that section recover the tax by any one or more of the modes provided in [SECTION]. Therefore, the provisions contained in [SECTION] are in addition to the provisions contained in [SECTION]. In view of the expression used in [SECTION], there is no bar on the part of the Tax Recovery Officer to recover the tax due by resorting to any of the modes provided in [SECTION] once a certificate is drawn up under [SECTION]. This provision does not specify that such certificate is to be drawn up against the garnishee or against the debtor of the garnishee. The statute never contemplated drawing up of successive certificate for recovering the same amount of tax from the assessee as defined in [SECTION]. Once this certificate is drawn up against the assessee, the Tax Recovery Officer is free to proceed to recover his tax due under any of the modes provided under [SECTION] and [SECTION] or under [SECTION], as the case may be, either from the assessee or from its garnishee or the debtor of the garnishee under [SECTION] makes it clear in respect of salaried persons to obtain recovery from the person liable to pay the salary is an indicator that the power conferred on the Tax Recovery Officer for recovery of tax is of wide amplitude as would be apparent from the scheme of the recovery provided in [SECTION] Under [SECTION] the Tax Recovery Officer may request the garnishee to pay the dues payable to the assessee to the Tax Recovery Officer and the modes how such recovery is to be made or the payment by the garnishee is to be made ; (9) The dispute within the contemplation of [SECTION] has to be put on oath. Whereas in the present case, the statement is not supported by any oath or there is no clear stand taken by the garnishee [ENTITY] with regard to its denial of liability to pay under the decree and, therefore, the Tax Recovery Officer had rightly decided that [SECTION] is applicable in the present case. Only in a case where the denial is clear and until it is found to be false, the prohibition of Clause (vi) would be applicable and not otherwise ; (10) Clause (x) makes the garnishee to whom a notice under [SECTION] is issued, a deemed assessee in default upon non-compliance with the notice in respect of the sums specified in the notice and the same can be recovered as if it were an arrear of tax due from such garnishee in the manner prescribed in [SECTION] and the notice shall have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his power under [SECTION]. Since [SECTION] is in addition to [SECTION], the omission of [SECTION] in Clause (x) would not denude the Tax Recovery Officer from exercising its power under [SECTION] in addition to its power under [SECTION] There is no infirmity in the judgment appealed against and the notice being a notice of attachment by fiction created by Clause (x), the debtor of the garnishee is bound by the same and the debt payable by the debtor to the garnishee becomes attached with the issue of the notice under [SECTION] in the same manner such notice operates as a notice of attachment under [SECTION]. To support his contention, he relied on the decision in [PRECEDENT] [ENTITY] did not prefer any appeal despite the execution having been levied until the notice under [SECTION] was issued and the decree having been based on admission ; there is no scope of success in the appeal. The attempt of [ENTITY] is aimed at thwarting the recovery of tax due and for no other purpose. In these circumstances, the appeal should be dismissed and the order of the learned single judge should be affirmed.
Submissions on behalf of VCVL :
7. Mr. [ENTITY], learned counsel for VCVL, adopted the submissions made by Mr. [ENTITY] and added that the decree having been passed on admission under [SECTION] of the Original Side Rules and on account of the delay and non-filing of security in terms of this court's order, the recovery cannot be objected to by [ENTITY]. The appeal should therefore fail.
8. Learned counsel for the respective parties had argued for days together and had made erudite submissions and dealt with the matter both in law and fact in detail referring to various materials placed on record. Each of them had almost opened up all the points available in the writ petition. However, we are not required to deal with all such questions so raised by the respective counsel except what are relevant for the purpose of the present case. We, however, would like to confine overselves only to the relevant points without endeavour to answer all the questions raised.
Whether [SECTION] applies to a debtor of garnishee :
9. So far as the question as to whether the provisions of [SECTION] could be applied against the debtor of a garnishee or in other words upon a garnishee of a garnishee, is concerned, the learned single judge had decided that it does not. This part of the decision has not been assailed in the appeal by the appellant [ENTITY]. Neither has any cross-objection been filed by the Department assailing this finding. Therefore, this finding is no more open to the agitated in this appeal. Admittedly, [SECTION] contemplates recovery of the tax in the modes provided under [SECTION] expressly omitting [SECTION]. This is indicative of the intention of the Legislature. As rightly contended by Mr. [ENTITY] relying upon [ENTITY] , this statute has to be interpreted in favour of the assessee in case of any ambiguity where two views are possible, as is apparent in the present case. As such we are not supposed to hold otherwise. The learned single judge appears to have held the law correctly. That apart, in Smt. [ENTITY] , it was held that [SECTION] does not apply to a debtor of garnishee and that in default of the garnishee the amounts specified in the notice can be recovered as if a tax due from him deeming the garnishee an assessee in default in the manner provided under [SECTION] on the reasoning that if the Legislature had intended that [SECTION] would also be applicable, in that event, it would have stopped before the phrase "in the manner provided under [SECTION]". We do not find any reason to differ from the view taken by the Gujarat High Court. We may buttress the said view with the reason following. Since Clause (x) prescribes a particular mode of recovery through the procedure prescribed under [SECTION] in case of default by a garnishee, the recovery is to be made in accordance with those provisions and not otherwise, as was held in [ENTITY] , followed in [ENTITY] . When Clause (x) does not include [SECTION], it is to be presumed that the Legislature had deliberately and intentionally omitted and had intended to exclude the application of [SECTION] in a case contemplated under [SECTION]. Therefore, we are of the view that the learned single judge has correctly decided the question.
Notice under [SECTION] : Attachment of debt : Extent and scope :
10. Now let us examine as to whether the notice issued to APBCL under [SECTION] could be treated to be a notice of attachment under [SECTION] in respect of the debt payable by such debtor APBCL to the garnishee [ENTITY] for the purpose of recovery of tax due from the assessee VCVL. In order to examine this question, we may refer to the different provisions contained in the statute. The definition of "assessee" given in [SECTION] of the Act includes a person deemed to be an assessee in default under any of the provisions of the Act. [SECTION] makes the garnishee in default of compliance with the notice under [SECTION] a person deemed to be an assessee in default against whom the amount specified in the notice under [SECTION] can be realised as if it were an arrear of tax due from the garnishee in the manner provided in [SECTION] and the notice under [SECTION] issued to the garnishee shall have the same effect as an attachment of debt by the Tax Recovery Officer in exercise of his power under [SECTION]. Thus, Clause (x) creates a fiction by which the notice under [SECTION] becomes a notice of attachment under [SECTION] in respect of the debt payable by the garnishee to the assessee and such debt is recoverable in the manner provided in [SECTION]. The expression used in Clause (x) clearly indicates that this provision is confined only within the assessee and its garnishee and not beyond. Whether [SECTION] can be applied against the garnishee of a garnishee after the provisions provided in [SECTION] is undergone against the garnishee or not is not a question, which we are required to answer in this case, since it is not a question falling within the scope of determination of the issues involved. Clause (x) as it stands expressly omitting [SECTION] and referring to [SECTION] clearly indicates the intention of the Legislature that the garnishee is to be proceeded against under the provisions contained in [SECTION] in default on the basis of the notice under [SECTION] treating the same to be a notice under [SECTION] attaching the debt payable by the garnishee to the assessee. This attachment cannot extend to any other debt, which was not contemplated in the notice under [SECTION]. The attempt to extend the attachment effected under [SECTION] deeming it to be a notice under [SECTION] to the debt due to the garnishee from its debtor would be stretching the provision too far beyond the comprehension of the express provision contained in Clause (x). It is the garnishee, who is deemed to be the assessee in default from whom the tax can be recovered as an arrear of taxes due from him, but until the provisions of [SECTION] are resorted to against the garnishee and a certificate is drawn against him, we do not think that there is any scope of resorting to [SECTION] as against the debtor of the garnishee or attach the debt payable by the debtor of the garnishee to the latter without following the provisions provided in [SECTION] read with the provisions contained in the [SECTION] providing detailed procedure related to recovery of tax due. Therefore, the notice under [SECTION] could not be issued on the debtor of the garnishee. If no such notice could be issued on the debtor of the garnishee, such notice cannot be treated to be a notice under [SECTION] having the effect of attachment of the debt due to the garnishee from its debtor. It is only a valid notice under [SECTION], which has the effect of a notice under [SECTION] in respect of the debt specified in the notice under [SECTION]. Since no notice under [SECTION] could be contemplated to be issued against the debtor of the garnishee, the alleged notice cannot be converted into a notice under [SECTION] until the procedures prescribed in [SECTION] read with the procedure prescribed in the [SECTION] are resorted to and undergone and complied with.
11. [SECTION] can be resorted to as against an assessee in default or a person deemed to be in default (assessee in default). Under this provision, the Tax Recovery Officer is supposed to draw up a certificate and then proceed to recover the amounts specified in the certificate by one or more of the modes provided in Clauses (a) to (d), notwithstanding that proceedings for recovery of the arrears by any other modes have been taken. These modes include attachment and sale of the assessee's movable and immovable property. Admittedly, debt due to the assessee is a movable property and can be attached. Once attached, it can also be sold and the debt so attached is recoverable as if it were a certificate debt due. Irrespective of this provision, the Tax Recovery Officer is at liberty where a certificate is drawn up to recover the debt through modes prescribed in [SECTION]. Clause (x) prescribes attachment of the debt due from the assessee deemed to be in default. Admittedly, APBCL is not an assessee deemed to be in default. Though the definition of "assessee" defined in [SECTION] includes assessee in default but this has to be read in the context of [SECTION], which bears a different connotation in view of the provision contained in the [SECTION]. We cannot read the provisions of the Act in relation to recovery of tax without reference to the [SECTION]. When the Act prescribes the procedure for recovery of tax in the [SECTION], the same cannot be overlooked and the manner in which the recovery is prescribed. In view of the ratio decided in [ENTITY] , the provisions contained in the [SECTION] are to be followed. This is clear because of the omission of [SECTION] in [SECTION]. The certificate issued against the assessee in default cannot be treated as a certificate issued against a person deemed to be in default. Admittedly, no certificate has been issued against [ENTITY] under [SECTION] as an assessee deemed to be in default. [SECTION] prescribes issue of notice upon the defaulter requiring the defaulter to pay the amount specified in the certificate within 15 days from the date of service of the notice, intimating the defaulter that in default, steps would be taken to realise the amount under the [SECTION]. [SECTION] prescribes that no step in execution of a certificate shall be taken until the period of 15 days elapses from the date of the service of the notice issued under [SECTION] except in exceptional cases mentioned in the proviso. In the present case, no such exceptional case has been made out by the Department for attracting the provisions provided in the proviso. [SECTION] prescribes that when a movable property is to be attached a warrant written and signed by the Tax Recovery Officer is to be furnished specifying the name of the defaulter and the amount to be realised and such warrant is to be served under [SECTION] on the defaulter. If after service of the warrant the amount is not paid forthwith, under [SECTION] the Tax Recovery Officer shall proceed to attach the movable property of the defaulter. The mode of attachment of different kinds of property has been prescribed in diverse rules. We are concerned with the debt, which comes within the scope [SECTION] prescribing attachment by a written order, prohibiting the creditor from recovering the debt and the debtor from making payment until further order of the Tax Recovery Officer. Such order is to be affixed on some conspicuous part of the office of the Tax Recovery Officer and also to be sent to the debtor. A debtor prohibited under [SECTION], [SECTION], [SECTION], may pay the amount of his debt to the Tax Recovery Officer and such payment shall discharge him as effectually as payment to the party entitled to receive the same.
12. It may be noted that the provisions refer to the expression "defaulter" at every stage. The word "defaulter" has been expressly defined in [SECTION] to mean "the assessee mentioned in the certificate". When a particular expression is used in an enactment and the same is clearly defined, the court has no alternative but to give the meaning to the expression as defined in the statute and not otherwise. Therefore, when the procedure for recovery uses the expression "defaulter" instead of the "assessee in default" and the expression "defaulter" has been defined to mean "the assessee mentioned in the certificate", then by no stretch of imagination can a certificate issued against the assessee be treated to be a certificate issued against the deemed assessee in default until a certificate is issued under [SECTION] in default of the garnishee in terms of Clause (x) deeming him an assessee in default. A notice of attachment of a debt cannot be issued against a person who is not a defaulter within the meaning of [SECTION]. At the same time, no attachment can be made until the expiry of 15 days of such notice. An attachment can be effected only after a warrant written and signed by the Tax Recovery Officer is furnished. Therefore, a notice issued under [SECTION] upon a garnishee though by fiction of Clause (x) may be deemed to be a notice under [SECTION] as soon he becomes a defaulter and a deemed assessee in default, yet that will not enable the Tax Recovery Officer to attach the debt due to the garnishee from its debtor without following the provisions contemplated in [SECTION] read with the [SECTION] following [SECTION], [SECTION], [SECTION], [SECTION], [SECTION] and [SECTION]. Therefore, by no stretch of imagination could the notice under [SECTION] be issued upon the debtor of the garnishee. A notice could be issued on the debtor of the garnishee only after compliance with [SECTION] and the rules contained in the [SECTION] as discussed above and not otherwise. Therefore, the alleged notice served upon the debtor of the garnishee APBCL under [SECTION] cannot be treated to be a notice of attachment under [SECTION]. Therefore, the notices under [SECTION] issued upon the debtors of the garnishee cannot be sustained and are liable to be quashed. However, the amount already paid by APBCL and realised by the Tax Recovery Officer shall grant full discharge with regard to the debts due to [ENTITY] so far as APBCL is concerned. The recovery of such amount shall be subject to the final determination of the proceedings under [SECTION] as against [ENTITY] following the provisions of [SECTION] read with the rules prescribed in the [SECTION].
[SECTION] : Clause (vi) : Scope and extent :
1[SECTION]. Under [SECTION] the provisions of [SECTION] can be resorted to by the Assessing Officer if no certificate is drawn up. In this case a certificate having been drawn up and [SECTION] having been resorted to by the Tax Recovery Officer, Sub-section (1) is in no way concerned in this case. The [ACT] enforced with retrospective effect from April 1, 1988, substituting Sub-section (1A), enabled the Tax Recovery Officer to resort to [SECTION] where a certificate has been drawn up under [SECTION]. Here a certificate has since been drawn up under [SECTION] against the assessee VCVL. Therefore, the Tax Recovery Officer is competent to resort to [SECTION] against [ENTITY] under Sub-section ([SECTION]) thereof. The only remedy open to [ENTITY] is to avoid the liability under Clause (vi) by objecting to it by a statement on oath until such statement on oath was found to be false in material particular.
14. [ENTITY] claims to have made a statement on oath. This statement of oath was not accepted by the Tax Recovery Officer on the grounds mentioned in the order itself. We do not express our opinion with regard to the validity thereof. However, having gone through the order, we are of the view that the Tax Recovery Officer has travelled beyond the scope of his jurisdiction contemplated under Clause (vi). The only thing the Tax Recovery Officer could go into upon such statement having been filed on oath is as to (a) whether the statement is supported by oath or not ; (b) whether there are sufficient materials disclosed on oath enabling the garnishee to deny its liability ; (c) whether the statement is genuine ; and (d) whether the statement is false in any material particular or not. The Tax Recovery Officer is not supposed to decide the merits of the claim in between the parties. The limited power conferred on the Tax Recovery Officer does not create jurisdiction to determine disputed questions of fact relating to the merits of the claim raised, he cannot sit in appeal within the scope and ambit of the Clause (vi).
15. Mr. [ENTITY] had contended that [ENTITY] did not submit any statement of oath taking a particular stand, denying its liability within the scope and ambit of [SECTION]. Whereas Mr. [ENTITY] pointed out from the materials from the paper book that such objection was raised on oath and that there is no finding that this objection was false. On the other hand, the Tax Recovery Officer had gone into the merits of the objection so raised. The Tax Recovery Officer is not competent to go into such question. He can only look into as to whether the claim is a genuine one or false. He cannot decide the merits of the claim raised. In support of his contention Mr. [ENTITY] had relied on the decision in [PRECEDENT] . But this decision does not help us in the context. Inasmuch as in the said decision, the LJCI had informed the Tax Recovery Officer only about the assignment of the policy but did not make any statement on oath denying its liability in the manner as specified in Clause (vi). Since the objection was not raised in the manner it ought to be, the objection was held to be invalid. This invalidity was arrived at also on another ground that the objection was raised after inordinate delay. Whereas the Madras High Court in [PRECEDENT] had held that the Income-tax Officer is powerless to proceed under [SECTION] where the third party does not admit or denies that the debt is owing to the assessee and the officer cannot sit in judgment over the denial and come to his own conclusion, though, however, if there is an admission the notice under [SECTION] can be proceeded with. In [PRECEDENT] , the Calcutta High Court followed the decision in [PRECEDENT] and held that the Income-tax Officer cannot by an unilateral decision decide the question of the benami character of the business and give himself jurisdiction under [SECTION] of the Act. We fully agree with these two decisions and hold that the jurisdiction conferred on the Assessing Officer (AO) or the Tax Recovery Officer under [SECTION] is limited within the scope of the clause as expressly provided. The expression used in Clause (vi) is very simple. Where a person served with a notice under [SECTION] raises an objection on oath that the sum demanded is not due to the assessee or that he does not hold any money for or on account of the assessee then nothing contained in [SECTION] shall require such person to pay any such sum or part thereof. But only if it is discovered that such statement was false in any material particular then such person shall be personally liable to the Tax Recovery Officer to the extent of his own liability to the assessee on the date of the notice and to the extent of the assessee's liability for any sum due under the Act whichever is less. This expression clearly indicates that the jurisdiction of the Tax Recovery Officer is confined only to the extent of discovery of any falsity in the denial and ascertaining its genuineness. Clause (vi) does not confer any jurisdiction on the Tax Recovery Officer to determine the merits of the objection and sit in appeal to delineate the entitlement of the parties.
16. Admittedly, an appeal has been preferred against the decree though belated and a stay has been granted against the principal assessee restraining it from executing the decree. As such the decree having become in executable and the liability having been denied, there is no scope for the Tax Recovery Officer to proceed further in the matter. Mr. [ENTITY] had relied on [PRECEDENT] to contend that an appeal is a continuation of the suit and the whole matter becomes at large before the appellate court and as such there is no finality of the decree. The same principle was laid down in [PRECEDENT], . In the present case, thus the pendency of the appeal has opened the decree at large before the appeal court and until the stay is vacated, the decree cannot be executed and until the decree becomes executable, the same cannot be proceeded against by the Tax Recovery Officer unless admitted by the [ENTITY].
Admission of one officer whether binding on other officer of the same Department :
17. We are unable to accept the contention of Mr. [ENTITY] that when one officer of the Department has held the transaction to be a sham transaction, another officer of the same Department would be bound by such decision in the context of this case. Inasmuch as in the proceeding for assessment of [ENTITY], VCVL was not a party, any finding by the income-tax authority in an assessment against [ENTITY] would not bind VCVL. The relation between VCVL and [ENTITY] is independent of the decision by the income-tax authority. VCVL has every right to recover the amount from [ENTITY] through due process. [ENTITY] can defend such claim of VCVL only through appropriate process in the suit independent of the finding of the income-tax authority. The decision in [PRECEDENT], [PRECEDENT] , therefore, would not help us, inasmuch as the facts of the case, dealt with in the said decision, are clearly distinguishable from the case at hand. On similar reasons the decision in [PRECEDENT] is also distinguishable and not applicable having regard to the facts and circumstances of the case, inasmuch as in an identical situation the customs authorities had taken two different views in a lis between the customs authorities and the assessee. The principle of estoppel as enunciated in [PRECEDENT], , relied upon by Mr. [ENTITY], also does not help us in the present facts and circumstances of the case, inasmuch as VCVL was not a party in the assessment of [ENTITY] by the income-tax authority and at the same time the income-tax authority was not a party in the suit to recover the claim by VCVL against [ENTITY] against whom the suit was decreed. Therefore, there is no infirmity in issuing the notice under [SECTION] on the basis of the decree offered by VCVL for recovery of the tax due from it being an amount payable under the decree by [ENTITY] to VCVL and thus on facts the principle sought to be advanced by Mr. [ENTITY] cannot be deduced from this decision. On a similar principle the decision in [PRECEDENT] is inapplicable since both the War Office and the Minister of Pensions were agents of the Crown and were entrusted with the function of administering Royal Warrant issued by the Crown they could not differ in a lis between the Crown and the claimant, which is a case distinct from the one at hand.
Maintainability of the writ petition :
18. Mr. [ENTITY] had raised an objection as to the maintainability of the writ petition on the ground that [SECTION] and [SECTION] provides for appeal and revision. But when question of jurisdiction is raised, the writ petition can be maintained despite existence of alternative remedy. In this case as we have found that the action taken by the income-tax authority was in clear violation of the jurisdiction conferred on it and as such despite [SECTION] and [SECTION] providing adequate alternative remedy, the writ petition is maintainable.
Order :
19. In these circumstances, the notice under [SECTION] (annexures P29 to P[SECTION]4 of the writ petition) issued upon APBCL and the other debtors of [ENTITY] (respondents Nos. 9 to 18) in the facts and circumstances of the case, is incompetent and cannot be treated to be a notice of attachment as discussed above. But since, however, some amount has already been recovered by reason of voluntary payment by APBCL, the same may not be interfered with at this stage. However, this amount shall be held by the Income-tax Department without prejudice to the rights and contention of the parties and subject to the ultimate decision in the appeal filed by [ENTITY] in relation to the decree obtained against it by VCVL and the ultimate decision in the proceeding, under [SECTION] of the Act as against [ENTITY]. It would be open to the Income-tax Department to proceed to recover the amount from [ENTITY] pursuant to the decree if the appeal is decided in favour of VCVL, affirming the decree or as soon the decree becomes executable, as the case may be. The decision by the Tax Recovery Officer rejecting the objection raised under [SECTION] by [ENTITY] on the merits cannot be sustained unless any ingenuinity of the objection is found or any falsity in the statement is discovered. Therefore, the order impugned (annexure P62 of the writ petition) is set aside with liberty to the Tax Recovery Officer to exercise his jurisdiction within the scope and ambit of [SECTION] as discussed above namely with regard to the genuineness or the falsity of the objection raised without sitting in appeal over the merits of the objection itself after giving opportunity to [ENTITY].
[SECTION]. The appeal thus stands allowed to the extent indicated above. The notices (annexures P29 to P[SECTION]4 of the writ petition) issued to APBCL and the other debtors of [ENTITY] (respondents Nos. 9 to 18) under [SECTION] and the order (annexure P62 of the writ petition) passed by the Tax Recovery Officer on the objection of [ENTITY] under [SECTION] are hereby quashed subject to the order passed above. Let a writ of certiorari do issue accordingly. The Tax Recovery Officer shall decide the objection of [ENTITY] under [SECTION] before proceeding under [SECTION] against [ENTITY] in the light of the observation made hereinbefore. Let a writ of mandamus do issue accordingly. The Tax Recovery Officer is restrained from proceeding with the proceedings under [SECTION] against [ENTITY] till the decree becomes executable and a fresh decision on the objection under [SECTION] is taken. Let a writ of prohibition do issue to that extent.
[SECTION]. There will, however, be no order as to costs.
[SECTION]. Urgent xerox certified copy of this judgment be made available to the parties, if applied for.
[ENTITY] J.
2[SECTION]. I agree.