Judgment : The facts inter alia leading to this writ petition are that the petitioner No. 1 is a Company duly incorporated under the Indian Companies Act, 1956 and is a manufacturer and dealer, inter alia, of mild steel and alloy ingot, bars and rounds and other structurals. 2. A Scheme has been framed by the State of West Bengal for refund of sales tax already paid as loan to the eligible industrial units to be set up and/or expanded in the State and as a part of its Industrial policy decided to grant on merits of each case incentive at its discretion as announced and provided in its resolution No. 2536-Ind PL dated 6.4.83 as amended from time to time. The said scheme is known as West Bengal Incentive Scheme, 1983. It is the contention of the petitioners that the petitioner No. 1-Company was and is facing a tremendous recession ill its trade. In order to boost it up it needed some governmental help. it, therefore, availed of the aforesaid incentive scheme and entered into an agreement with the West Bengal Industrial Development Corporation Ltd., the authority appointed by the State of West Bengal to grant the aforesaid loans on 21st March, 1992. By the said agreement the aforesaid Corporation agreed to give a loan of Rs. 31,91,000/- which was already paid by the Company towards the sales tax for the period from 1st July, 1988 to 31st March, 1991. West Bengal Industrial Development Corporation Ltd. (hereinafter referred to as a Corporation) after considering all the factors, after being satisfied that the petitioner company had actually paid the aforesaid account of Rs. 31,91,000/- as sales tax for the aforesaid period and after finding the petitioner company to be an eligible unit under the aforesaid Incentive Scheme, entered into the aforesaid agreement dated 21st March, 1992 to disburse an amount of Rs. 31,91,000/- as loan to the petitioner. 3. The petitioner-company in the meantime applied to the Board for industrial and financial re-construction for declaring the company as a sick unit under section 15 of Sick Industrial Companies (Special Provisions) Act. 1985. The Board, however, after a prolong hearing was pleased to pass an order keeping the matter pending. The petitioner preferred an appeal before the Appellate Authority and the said appeal is still pending. 1985. The Board, however, after a prolong hearing was pleased to pass an order keeping the matter pending. The petitioner preferred an appeal before the Appellate Authority and the said appeal is still pending. In the meantime, Industrial Re-construction department of the Government of West Bengal, on 1st January, 1993 granted the petitioner company the status of relief undertaking for a period of six months or till the date of the disposal of the case by the Board, whichever is earlier. 4. In the middle of the month of March, 1993, the petitioner company came to know that out of the aforesaid amount of Rs. 31,91,000/-. The West Bengal Industrial Development Corporation Ltd. had ear-marked a sum of Rs. 20 Lakhs approximately for disbursement to the petitioner Company. Accordingly, a cheque was also prepared by the aforesaid Corporation to be handed over to the petitioner Company. Suddenly on 29th March, 1993. It came to the knowledge of the petitioner company that the aforesaid amount of Rs. 20 Lakh, which was ear-marked by the aforesaid Corporation for disbursement to the petitioner company as loan was being given to the Commissioner of Commercial Taxes towards the alleged arrears of sales tax subsequent to the period 31st March, 1991, This payment the Corporation was making, as the petitioner came to know, on a request made by the Commercial Tax Department. Immediately the instant writ petition was prepared and moved before this Court and an interim order was passed by me on 30th March. 1993 and on 1st April, 1993 directing the aforesaid Corporation to hold the aforesaid amount of Rs. 20 Lakhs and directions were given for filing affidavits and for final hearing. 5. Petitioner-company, however, could not file its sales tax returns for some period and pay sales tax according to such returns. Such periods for which the petitioner company could not file its return under the Bengal Finance (Sales Tax) Act, 1941 and pay taxes according to returns were for the period from fourth quarter ended June, 1991 till December, 1992. It may also be noted that on few occasions the petitioner company was granted installments by the Commercial Tax Department which also the petitioner company failed to pay. Certain commitments were made from the end of the petitioner company which also it was not possible for the petitioner company to honour at times. It may also be noted that on few occasions the petitioner company was granted installments by the Commercial Tax Department which also the petitioner company failed to pay. Certain commitments were made from the end of the petitioner company which also it was not possible for the petitioner company to honour at times. In order to pressurise the petitioner company coercive actions were also taken by the Commercial Tax department against it. Such, instances are stopping the issuance of declaration forms, road permits and sales tax clearance certificates but for which it is entirely impossible for the petitioner company to carryon its day to day business. Since without the declaration forms, road permits and sales tax clearance certificates it became impossible for the petitioner company to run its business the petitioner company made an application under Section 8 of the West Bengal Taxation Tribunal Act, 1987 before the West Bengal Taxation Tribunal which was registered as R. N. 64 of 1993. After hearing the petitioners and the Learned State Representative appearing for the Commercial Tax Department, Government of West Bengal, the West Bengal Taxation Tribunal by an order dated 23rd April, 1993 was pleased to frame a scheme of payment of arrear sales tax for the period from the middle of June, 1991 till 31st December, 1992. This is exactly the same period for which the Commercial Tax Department has asked the aforesaid Corporation to pay directly to them the sum of Rs. 20 Lakhs. Under the said order of the Tribunal the petitioner company had to pay an amount of Rs. 5 Lakhs towards the arrears and file current returns and pay taxes according to such returns which make the total payment of a sum of Rs. 9 Lakhs inclusive of the aforesaid amount of Rs. 5 lakhs. 6. It is the contention of the learned Advocate for the petitioner that it is for exactly this period i.e. 30th June, 1991 to 31st December, 1992, that the West Bengal Taxation Tribunal had framed the Scheme for payment by its Order dated 23rd April, 1993. The Commercial Tax Department bas not preferred any appeal against the said order and the said order is binding on the Commercial Tax Department. The Commercial Tax Department bas not preferred any appeal against the said order and the said order is binding on the Commercial Tax Department. Moreover, no recovery can be made until and unless the assessments are made and notices of demand in Form VII under the Bengal Finance (Sales Tax Act, 41) are served upon he dealer; demand of tax thus made can only be enforced by a Certificate or garnishee proceeding. Therefore, the action to recover the money from West Bengal Industrial Development Corporation is not at all in accordance with law. 7. It has been submitted that the Commercial Tax Department has no authority, competence and/or jurisdiction to pounce upon the money which has been sanctioned as loan by the aforesaid Corporation. Whatever may be the assessed dues of the petitioner Company has either been paid or stayed in appeals preferred by the petitioner company against the assessment orders. There is no assessed dues against the petitioner and this is an admitted position. No recovery proceeding has been initiated against the petitioner, no garnishee notice has been issued and yet the Commercial Tax Department is trying to grab the money from the aforesaid Corporation Even if it is assumed that the petitioner company had asked the Commercial Tax Department to directly take the money from the aforesaid Corporation and adjust the same towards the arrears sales tax not paid, in that event it is submitted that the statutory authorities cannot go an inch beyond the statute and cannot take a single farthing from a third party without making any assessment, without reising any valid demand and without initiating any recovery proceeding. There is no legal demand against the petitioner. Moreover, it is well settled law that money can be recovered under garnishee proceeding from a third party when the third party owes such money to the assessee, The instant case is one where the aforesaid Corporation is giving the money to the petitioner as a loan and such loan cannot by any stretch of imagination be attached even under a garnishee proceeding. Reference may be made to a decision of this Court in the case of (1) Coal Products (P) Ltd, v. Income-Tax Officer, 'M' Ward & Ors.,. reported in 85 ITR 347. 8. Reference may be made to a decision of this Court in the case of (1) Coal Products (P) Ltd, v. Income-Tax Officer, 'M' Ward & Ors.,. reported in 85 ITR 347. 8. It has further been submitted that the Corporation is bound by the aforesaid agreement entered into by it and the petitioner company and it cannot make over the money to the Commercial Tax Department only on a mere request made by it. 9. The question, therefore, arises when the West Bengal Industrial Development Corporation Ltd has received a request in the Form of a Letter from Addl. Commissioner Commercial axes, West Bengal, to the effect that the outstanding dues on account of sales tax bas not been paid and, therefore, on the request of the Addl. Commissioner Commercial Taxes, West Bengal can the respondent-West Bengal Industrial Development-Corporation Ltd. pay the amount to the sales tax authorities instead of releasing the same in favour of the petitioner on account of a subsidy. 10. This application has been seriously opposed on behalf of the Commercial Tax Officer and respondent-State of West Bengal. An affidavit has been affirmed by Shyam Sundar Das, the Commercial Tax Officer, Assessment Wing-III Group-E on 15th April, 1993 which is intended to be affidavit-in-opposition to the petition filed by the petitioner. 11. The relevant paragraphs of the said Affidavit-in-Opposition are set out hereinbelow :- "5. The petitioner is a habitual defaulter in payment of Sales Tax and at present he is defaulter in submission of returns for the period from quarter ending 30.6.91 to 31.12.92 under both Bengal Finance (Sales Tax) Act, 1941 and the Central Sales Tax Act, 1956. According to the statement by the petitioner dated 5.4.93 the admitted amount of unassessed Sales Tax dues upto February, 1993 is Rs.60,90,381.61. The total amount of assessed dues from 4 quarters ending 31.12.78 to 4 Quarters ending 30.6.88 to-Rs. 11,775,545 62. Hence the total amount of Sales Tax dues (both assessed and unassessed) Rs 1,78,65,927.23 according to the statements of the petitioner. The petitioner from time to time made various premises but did not pay the dues excepting by insignificant amounts for procuring permits or declaration forms. 6. Proceedings for cancellation of the Sales Tax Registration Certificate or the petitioner were started from time to time. The petitioner from time to time made various premises but did not pay the dues excepting by insignificant amounts for procuring permits or declaration forms. 6. Proceedings for cancellation of the Sales Tax Registration Certificate or the petitioner were started from time to time. On the last occasion on 10.7.92 the petitioner was asked to show cause by a Notice as to why the Certificate of Registration should not be cancelled for non-submission of returns and non-payment of taxes. 7. The petitioners representatives appeared before the respondent No. 6 and took time on several occasions and the matter was finally heard on 7.8.92. After the bearing, in view of request by the petitioner to the respondents to collect directly Rs. 31,91,000/- from the West Bengal Industrial Development Corporation Ltd. the amount which was payable by the said Corporation to the petitioner, a scheme for payment of the balance amount of Rs. 18,10,443/- was made. An order was passed accordingly on 7.8.92 specifically stating therein "The dealer has proposed to adjust directly the payment of W.B.I.D.C. against arrear sales tax of Rs. 50,01,443/-". The Secretary of the petitioner-Company after going through the order affixed his signature in the margin of the Order-sheet on 7.8.92. A xerox copy of the representation made by the petitioner dated 4.8.92 is annexed hereto and marked annexure 'W'. 8. It may be mentioned in this connection that the petitioner had been requesting the respondents to take directly from the West Bengal Industrial Development Corporation Ltd. the sum of Rs 31,91,000/- from time to time. Xerox copies of the letters dated 2.5.92, 23.7.92 and 31.7.92 issued by the petitioners are annexed hereto and collectively marked as annexure X. 9. The West Bengal Industrial Development Corporation Ltd. the respondent No. 1 herein also agreed to make payment directly to the Commissioner of Commercial Taxes, West Bengal, the respondent No.5 to Rs. 20 lacs approximately on March 30, 1993. But the petitioners unfairly and unscrupulously moved the present application under article 226 of the Constitution of India in order to restrain the West Bengal Industrial Development Corporation Ltd. the respondent No.1 herein, from making payment to the respondents and at present under the order of the Hon'ble Court the West Bengal Industrial Development Corporation Ltd. is holding the money. 12. 12. The statements made in paragraphs 5 and 6 of the writ petition are matters of record and I deny all allegations which are not borne out by the records. In this connection I state that the Application made by the petitioner to the West Bengal Industrial Development Corporation Ltd. required a Sales Tax Clearance Certificate for the claim of each period for getting the required loan. The petitioners approached this respondent No.6 for the said clearance Certificate because the petitioner had huge dues of sales tax and as such were not entitled to get the clearance certificate for want of which the Joan would not have been sanctioned. The petitioner gave the understanding that if the Joan is sanctioned the respondents will be able to get direct payment from the West Bengal Industrial Development Corporation Limited. A xerox copy of the petitioner's letter dated 6.1.92 is annexed hereto and marked as annexure 'Y'. 13. In reply to the statements made in paragraph 7 of the writ petition I state that 2 instalments of loan were disbursed by the West Bengal Industrial Development Corporation Ltd. before the present instalment. In one instalment the payment was directly made by the West Bengal Industrial Development Corporation Ltd to the respondents against the Sales Tax dues of the petitioner. In another case the petitioner took Rs. 10,76,000/- and deposited the advice in favour of the Commercial Tax Department against Challans mentioned herein. Xerox copy of the said payment Advice together with the forwarding letter is annexed hereto and marked annexure Z. 14. In reply to the allegations made in paragraph 8 of the writ petition I state that the learned members of the Board for Industrial and Financial Re-construction did not consider the petitioner to be sick industry against which the petitioner preferred appeal and the appeal is still pending. 15. I dispute the allegations made in paragraph 9 of the writ petition and I state that there is no notification or order under which the petitioner has been excluded from the obligation of payment of Sales Tax dues. There is no direction upon the respondents prohibiting to take step for realisation of the said dues. 16. 15. I dispute the allegations made in paragraph 9 of the writ petition and I state that there is no notification or order under which the petitioner has been excluded from the obligation of payment of Sales Tax dues. There is no direction upon the respondents prohibiting to take step for realisation of the said dues. 16. In reply to the allegations made in paragraphs 10 and 11 of the writ petition I state that the petitioner was sanctioned the interest free sales tax loan against the amount paid by the petitioner for the period from 1.7.88 to 31.3.91 after due examination of the case by the West Bengal Industrial Development Corporation Ltd. It may be made clear in this connection that the petitioner had much more dues for payment of Sales Tax for the periods mentioned. As stated hereinabove the amounts received formerly by the petitioner were paid against the Sales Tax dues of the petitioner. Besides, it has already been stated that the petitioner in order to get the privileges requested the respondents to get the payment directly from the said West Bengal Industrial Development Corporation Ltd. I deny that the action of the West Bengal Industrial Development Corporation Ltd. is at all arbitrary, illegal, malafide or without jurisdiction as alleged or at all. 17. I deny the allegations made in paragraphs 12,13 and 14 of the writ petition and I state that in view of the facts stated in paragraphs 5, 6, 7, 8, 12 and 13 above the claim for direct payment to the respondents by the West Bengal Industrial Development Corporation Ltd. the respondent No. 1 is quite lawful, justified and valid. I deny all allegations which are contrary to or inconsistent with the statements made herein. 18. I dispute the allegations made in paragraph 15 of the writ petition and I state that the petitioner has not paid Rs. 1,78,65,927.23 of Sales Tax dues and it is doubtful as to whether full amount of sales tax will be realised from the petitioners at all. It may be mentioned in this connection that the petitioner realised full amount of Sales Tax but did not deposit sales tax payable to the Government. 23. 1,78,65,927.23 of Sales Tax dues and it is doubtful as to whether full amount of sales tax will be realised from the petitioners at all. It may be mentioned in this connection that the petitioner realised full amount of Sales Tax but did not deposit sales tax payable to the Government. 23. In reply to the allegations made in paragraphs 19 and 20 of the writ petition I state that the petitioner having withheld more than one and a half crores of rupees payable to the sales Tax Department and having procured sales tax clearance certificate on the assurance that the amount of Rs. 31,91,000/- will be directly paid by the West Bengal Industrial Development Corporation Ltd. the respondent No.1 and having given repeated representations cannot turn round and raise objection against payment by the West Bengal Industrial Development Corporation Limited directly to the Respondents." 12. The judgment and decision in the case of Coal Products Private Ltd. and another v. Income-tax Officer 'M' Ward, Companies District-II, Calcutta and others reported in 85 ITR 347 was relied upon by the learned Advocate for the petitioner. 13. In the aforesaid decision petitioner Coal Products Private Ltd., challenged a notice dated 22nd February, 1967 issued by the Income-tax Officer, 'M' Ward, Companies District-II Calcutta to the Secretary Coal Board, Government of India. 14. The material portion of the impugned notice, which is one under section 226(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") is in the following terms :- "A sum of Rs. 12,94,782.43 is due from M/s. Coal Products Pvt. Ltd. Nutandanga, Burdwan, Calcutta, Add. 1195 C. R. Avenue, Calcutta, on account of income tax/super-tax/penalty/interest/fine. You are hereby required under Section 226(3) of the Income-tax Act, 1961, to pay forthwith any amount due from you to or held by you for, or on account of the said M/s. Coal Products Pvt. Ltd upto the amount of arrears shown above, and also request you to pay any money which subsequently became due from you to him/them or which you may subsequently hold for or on account of him/them up to the amount of arrears still remaining unpaid, forthwith on the money becoming due or being held by you as aforesaid as such payment is required to meet the amount due by the taxpayer in respect of arrears of income tax/super-tax/penalty/interest/fine. I am to say that any payment made by you in compliance with this notice is in law deemed to have been under the authority of the taxpayer and my receipt will constitute a good and sufficient discharge of your liability to the person to the extent of the amount referred to in the receipt". 15. The contention of the petitioner coal Products Pvt. Ltd. in the aforesaid decision was that the money which is due or may become due from the Coal Board to the petitioner-company is by way of assistance fur certain specific purposes. The Coal Board is a statutory authority set up under the provisions of the Coal Mines (Conservation and Safety) Act, 1952. The powers of the Board to utilise the money received by it are limited by the provisions of the above Act. It has no power to utilise the money for any other purpose except the purpose for which the money belonging to the Coal Board can be utilised. 16. It was held in the aforesaid decision that proceedings under Section 226(3) of the Act being in the nature of garnishee proceedings, the general law with regard to garnishee proceedings should be applied. Following the principles laid down by the English Court in the case of (2) In re: General Horticultural Company, Ex parte Whitehouse reported (1886) 32 Ch. D. 512 it was held that garnishee orders and attachment of debts can only charge what the judgment-debtor can himself honestly deal with. The Decree-holders can only obtain from the garnishee what the judgment-debtor can honestly give them. 17. In the instant writ petition there is no question of attachment or notice issued by the Sales-tax Authority. The Sales-tax Authority has merely made a request to the West Bengal Industrial Development Corporation and the West Bengal Industrial Development Corporation being a Statutory body has granted subsidy to the petitioner for specific objects. Therefore, the case of the petitioners stand on a stranger footing and the respondent-West Bengal Industrial Development Corporation cannot withhold the amount of subsidy merely on request of the State Government on the ground of alleged dues of sales-tax Moreover, the Sales-Tax Act provides for a procedure to be followed for the purpose of realisation of arrear dues. 18. I have considered the submissions of the respective parties. 18. I have considered the submissions of the respective parties. It appears from records that there is no assessed dues against the petitioner nor any recovery proceeding has been initiated against the petitioner. It may be that the petitioner-company at a particular point of time asked the Commercial Tax Department to directly take the money from the respondent Corporation and adjust the same towards the arrear sales tax not paid. There was, however, a Scheme made by the west Bengal Taxation Tribunal by an order dated 23rd April, 1993 on the basis of which the petitioner company had to pay an amount of Rs. 5 Lakhs towards •the arrears and to frame a scheme of payment of arrear sales tax for the period from the middle of June, 1991 till 31st December, 1992. 19. Under the said order of the Tribunal the Corporation had to pay an amount of Rs. 5 lakhs towards the arrears and file current returns and pay taxes according to such returns which made the total payment of a sum of Rs. 9 lakhs inclusive of the aforesaid amount of Rs. 5 Lakhs. 20. Several letters annexed to the Affidavit-in-Opposition are only proposals made by the petitioner company for payment of easy instalments of arrears of Sales Tax dues from May 1991 to June 1992. 21. It has not been shown that the said proposal for payment of easy instalments being annexure, to the said affidavit have been accepted by the respondent commercial Tax Department and, as such, the petitioners company is not bound by the Statement contained in the said proposal. It is on record that the Tribunal on 23rd April, 1993 passed inter alia the following order :- "It is made clear that the applicant will be at liberty to make the payment of the aforesaid amount of Rs. 5,00,000/- which includes the amount of Rs. 3,00,000/- undertaken by the learned advocate for the applicant as payment towards the tax dues for the period from June 1991 to December 1992 and this order will remain in force till disposal of the main application. The prayers for interim order are thus disposed of". 22. The proposals contained in the several letters were made much earlier to the said scheme and/or order for payments made on 23rd April, 1993. The prayers for interim order are thus disposed of". 22. The proposals contained in the several letters were made much earlier to the said scheme and/or order for payments made on 23rd April, 1993. In view of the said order of the Tribunal on 23rd April, 1993 the proposals contained in the said letters which are all dated January 6, 1992, May 2, 1992, 23rd July, 1992, 31st July, 1992, 4th August, 1992 ceased to have any effect and in that view of the matter the respondents authorities are not entitled to rely upon such proposals for payment made by the petitioner com, any contained in the said letters being annexure to the said affidavit-in-opposition and on that basis request the West Bengal Industrial Development Corporation not to make any payment of the subsidy. Moreover, West Bengal Industrial Development Corporation agreed to grant subsidy to the petitioner-company on certain terms and conditions. These are form of loans and cannot be said to be money due and payable by the West Bengal Industrial Development Corporation to the petitioner company unless certain terms and conditions agreed upon by the parties are fulfilled. 23. I am, therefore, of the view that the West Bengal Industrial Development Corporation is under no obligation to pay the cheque earmarked for the petitioner to the Commercial Tax Officer or Sales Tax Authority and the request if any, made by the Sales Tax Authority for making over the cheque to such Authority has no binding effect on the West Bengal Industrial Development Corporation. 24. Under such circumstances, the writ petitioner succeeds in this Writ petition. 25. There will be a direction upon the respondent Nos. 1, 2 and 3 not to make over an, cheque/and/or Pay Order and/or to make any payment to the Commercial Tax Department, Government of West Bengal and to forthwith make the payment of the said sum of Rs. 20 Lakhs to the petitioner company earmarked for payment out of the aforesaid sum of Rs. 31.91 lakhs, being the sanctioned loan for the petitioner. 26. It is stated by the learned Advocate for the State Government that an application for dismissing the writ petition wall filed. In view of the order disposing of the writ petition, no order need be passed on that application. That application is treated as on the day's list and is disposed of along with the judgment passed to-day. 27. 26. It is stated by the learned Advocate for the State Government that an application for dismissing the writ petition wall filed. In view of the order disposing of the writ petition, no order need be passed on that application. That application is treated as on the day's list and is disposed of along with the judgment passed to-day. 27. The writ petition is accordingly disposed of with the directions as above. There will be no order as to costs. All parties are to act on a signed copy of the operative part of the Judgment on the usual undertaking.