Madras High Court has granted stay of coercive tax recovery proceedings against Smt. J. Deepa, niece and legal heir of Former Chief Minister of Tamil Nadu Late Selvi. J Jayalalitha, based

The Hon’ble Madras High Court has granted stay of coercive tax recovery proceedings against Smt. J. Deepa, niece and legal heir of Former Chief Minister of Tamil Nadu Late Selvi. J Jayalalitha, based on the arguments advanced by *Advocate Dr. Advocate – Supreme Court, High Courts and Tribunals* . The impugned recovery notice under Section 222 of the Income Tax Act, 1961 for a High Pitched demand exceeding Rs. 36 crores has been *stayed* by the Hon’ble Court on the following grounds;

*Key Grounds of Challenge Presented:*

*Violation of Rule 2 of the Second Schedule, Income Tax Rules, 1962* – The impugned notice dated 23.07.2025 grants only seven days to pay, whereas the law mandates 15 clear days, rendering the recovery proceedings illegal.

*Absence of Mandatory Demand Notice under Section 156* – No statutory demand notice was served, which is a sine qua non for declaring a person an “assessee in default” and for commencing recovery proceedings.

*Notice Issued in the Name of a Deceased Person* – Recovery initiated against the Late Selvi J. Jayalalithaa is void ab initio as per binding precedents (Savita Kapila v. ACIT). Legal heirs cannot be proceeded against without fresh lawful notice.

*Pendency of Appeals before High Court* – Multiple appeals against the assessment orders (TCs 545–556/2008, TCAs 58 & 60/2009) are pending before the Madras High Court. Any recovery during lis pendens amounts to pre-judging the matter and is wholly without jurisdiction.

*Petitioner Not an Assessee in Default* – Since no demand notice was served, the petitioner cannot be treated as an assessee in default under Section 220(4). Hence, the jurisdictional condition to trigger recovery under Section 222 is absent.

*Time-Barred Proceedings* – The Tax Recovery Certificate (ITCP-1) relied upon was issued as far back as 2007, nearly two decades ago. Continuation of proceedings on such an outdated certificate is barred in law.

*Violation of Principles of Natural Justice* – No computation sheet, break-up, or working of the alleged demand of Rs. 36.56 crores was provided. Such cryptic action is arbitrary and contrary to law.

Prayer before Court:
On these grounds, Dr. Sathya Kumar persuasively argued that the impugned recovery proceedings be quashed, and sought urgent interim relief. The Court, finding merit in these submissions, has granted stay against further recovery action, thereby protecting the petitioner from unlawful coercive steps.