HC permits I-T dept. to revoke order on Christy Friedgram

‘Obtained through misrepresentation’

The Madras High Court has permitted the Income Tax Department to revoke a November 7 order passed by the latter in favour of Tiruchengode-based Christy Friedgram Industry, a major supplier of food items for the noon meal scheme in government schools, as it was reported that the order was obtained through “misrepresentation”.

A Division Bench of Justices T.S. Sivagnanam and N. Sathish Kumar granted the permission on an application filed by the Director General of I-T (Investigation) and six other officials of the department seeking the leave of the court to revoke the order passed by the Principal Director of I-T (Investigation) last month.

Explaining the case before the Bench, A.P. Srinivas, senior standing counsel for the I-T department, said the sleuths had raided various premises belonging to the proprietor of the firm, T.S. Kumarasamy, in July this year and seized several documents.

Subsequently, Mr. Kumarasamy had filed around 10 writ petitions before a single judge.

Payment of salaries

In one of those cases, he sought an interim order permitting him to operate his bank accounts for payment of salaries to his employees and other purposes.

Justice K. Ravichandrabaabu dismissed the interim application on October 24, and hence, he moved a writ appeal before the Division Bench alleging illegalities in procedures adopted during search and seizure.

The Bench on November 2 permitted the appellant to pursue the matter with the I-T officials concerned who, in turn, were ordered to reconsider the issue.

Accordingly, the Principal Director on November 7 revoked the attachment order partly on the basis of the appellant’s claim that his four firms were yet to receive ₹417.46 crore from government entities.

Subsequently, a notice was issued to the appellant on November 26, stating that information received from the Integrated Child Development Services (ICDS) and the Tamil Nadu Civil Supplies Corporation (TNCSC) revealed that the amount of receivables was only ₹179.75 crore and not ₹417.46 crore, as it had been “misrepresented” by the appellant.

Hence, the department wanted to revoke the November 7 order through which attachment orders were revoked partially.

Accepting the plea, the Division Bench permitted the officials to revoke the order and remanded the issue to the Principal Director for taking a fresh decision after giving an effective opportunity of hearing to the appellant.