B.V. Sreenivasa Reddy Vs CIT (Karnataka High Court)
Pragmatic Ruling: HC Allows Maintenance Costs from Attached Assets for Better Revenue Realisation- Keep Windmills Running to Maximize Tax Recovery -HC Orders Balanced Approach in Windmill Revenue Case- Revenue Protection Through Asset Preservation
The petitioner sought a mandamus directing the Income Tax Department to allow him to utilise part of the revenues generated from his windmills for operational expenses such as maintenance, salaries, insurance & income tax payments. Petitioner’s windmills, operated by Suzlon Global Services Ltd., had been attached by the tax authorities against outstanding dues of about ₹35.75 crore & the entire revenue was being appropriated by the Department. Petitioner argued that unless maintenance charges were paid, the windmills would stop functioning, thereby eliminating the only source of income & ultimately harming revenue recovery.
The Court noted that the petitioner had made representations in 2018 & 2024, but no effective decision was taken. It observed that keeping the windmills operational was in the interest of both parties-ensuring continued revenue generation for the petitioner & enabling the Department to recover dues. The Court also considered the operating agency’s stand that they would not maintain the windmills unless paid.
The High Court allowed the writ petition & issued a mandamus to the respondents to consider the petitioner’s representations within four weeks. The Court directed that maintenance expenses should be paid directly to Suzlon to keep the windmills running, & the balance revenue should continue to be appropriated towards the petitioner’s income tax liabilities. This arrangement, the Court emphasized, would maximize revenue recovery while safeguarding the assets’ functionality.
