Auction based on quashed Exparte ITAT Order: Punjab & Haryana HC imposes Cost on Income Tax Authorities [Read Order]

The Punjab and Haryana High Court declared auction proceedings, based on a quashed ex-parte ITAT order by the tax recovery officer, void ab initio. M/s Gokal Chand Rattan Chand, the petitioner, contested the auction of their HUF's assets to recover taxes assessed against them. \r

Despite the assessment being challenged and ultimately upheld, auction proceedings continued. The court ruled that action based on the quashed order was void from the beginning. Income Tax Authorities were directed to refund auction proceeds to purchasers with 15% annual interest, applicable in 1985. Failure to comply within one month would result in contempt proceedings. \r

Additionally, the petitioner was awarded costs of Rs. 1,00,000.