WP/24448/1996 of HEH the Nizams Jewellery Trust AND HEH the Nizams Vs Asst. Commissioner of Income-tax, Circle-(3), on 29 December 2006

Conclusion

THE HON’BLE MR. JUSTICE B. SUDERSHAN REDDY

AND

THE HON’BLE MR. JUSTICE S. ANANDA REDDY

WRIT PETITION NO. 24448 OF 1996

DATED: 28-10-2005

BetweenHEH the Nizam’s Jewellery Trust &HEH the Nizam’s Supplemental Jewellery Trust,Rep. by its Trustee, Mr. M.A. Hadi, aged about 68 years,Single Mahal, Purani Haveli, Hyderabad.…………… PETITIONERAndAsst Commissioner of Income – tax,Circle _ 1(3), Ayakar Bhavan,Basheerbagh, Hyderabad and others.……………… RESPONDENTS

THE HON’BLE MR. JUSTICE B. SUDERSHAN REDDY

AND

THE HON’BLE MR. JUSTICE S. ANANDA REDDY

WRIT PETITION NO. 24448 OF 1996

ORDER:(per Sri S. Ananda Reddy, J)

The writ petition is filed by the petitioner – Trust praying for the issue of Writ ofMandamus declaring the adjustment of the amount of Rs.15.45 Crores which wasdeposited by the petitioner – Trust towards any tax payment other than the taxdemands relatable to the beneficial interest in the petitioner – Trust of any of itsbeneficiaries as illegal, arbitrary, unjust and unreasonable and consequently, soughtfor a direction to adjust the amount deposited by the Trust as indicated in its letter.

The grievance of the petitioner – Trust is that though the Trust has depositedRs.15.45 Crores towards the wealth tax liabilities with reference to the trust funds,but however, the said amount was adjusted or proposed to be adjusted against theindividual liabilities of the beneficiaries which is not permissible and therefore, thepetitioner sought for appropriate orders.

A counter has been filed on behalf of the respondents disputing the claim of thepetitioner with reference to the alleged adjustments of any part of the amountsagainst the tax liabilities of the individual beneficiaries. At the time of hearing,learned senior standing counsel represented on instructions that the Departmenthas been following the instructions issued by the Trust in its letter as to the mode ofadjustment. Therefore, there is no cause of action for the petitioner to seek any relief.

In view of the above representation, we consider it appropriate to dispose of the writpetition recording the said statement of the learned senior standing counsel for theDepartment and further directing the respondents to adjust the amount as indicatedin the letter of the petitioner – Trust and not otherwise.

It is also stated that the Department has passed orders prohibiting the payment ofRs.14.05 Crores which is lying in the State Bank of Hyderabad, Gunfoundry Branchcreating a lien to the Department. Out of the said amount, Rs.4.39 Crores wasreleased as per the instructions of the Department leaving an amount of rs.9.66Crores where the Department had created a lien and the said amount is lying in theBank. If the said amount is collected by the Department towards the tax liability ofthe Trust, it is open to the petitioner – Trust to convey its desire as to the mode ofadjustment as against the liabilities, perhaps in the same proportion as wasindicated in the trust deed and if such indication is made by the petitioner – Trust,the Department is directed to adjust in the same mode as indicated by the petitioner.

It is contended on behalf of the 4[th] respondent that though the trust funds wereadjusted against his tax liability by the Department, the Trust has collected theamount which was adjusted against his liability. Therefore, his interest requires to beprotected. This issue is outside the scope of the present writ petition. If the 4[th]respondent has got any grievance or claim against the trust, it is always open to the4[th] respondent to make a claim or initiate any other proceedings in accordance withlaw, which may have to be adjudicated on its own merits.

claims with reference to the amount collected from them individually but as the issuein the writ petition is not concerned with such issues, we decline to go into thosecontentions and it is open to the respondents to pursue their remedies that areavailable to them under law.

The Writ Petition is accordingly disposed of without any order as to costs.

(B. Sudershan Reddy, J)

28..10..2005

(S. Ananda Reddy, J)

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