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Issues:
Jurisdiction of the court to entertain the original petition; Right of the assessee-firm to seek refund of the deposited amount. Analysis: The judgment delivered by the High Court of Kerala involved an appeal by the Revenue against a decision favoring the respondent firm. The original petition sought to quash communications from the Revenue regarding the appropriation of a sum towards tax arrears. The court, in a detailed judgment, allowed the petition and directed the Revenue to settle accounts as per the observations made. The Revenue appealed the decision, presenting two main arguments before the court. The first argument raised was regarding the jurisdiction of the court to entertain the original petition. The court analyzed the cause of action and held that part of it arose within its jurisdiction, specifically noting that the correspondence and remittance related to the claim were linked to the Cochin office. The court agreed with the single judge's view that the starting point for the remittance could be traced to activities within the jurisdiction of the court, thus rejecting the plea of lack of jurisdiction. The second argument focused on the right of the assessee-firm to seek a refund of the deposited amount. The court highlighted that the firm had consistently maintained its right to claim liabilities even before making the deposit. The Revenue had also acknowledged this by offering to consider the liabilities before appropriation. The court emphasized that the deposit was subject to the right to claim liabilities, and as such, the firm was entitled to seek a refund of any excess amount deposited. The court dismissed the Revenue's argument that the deposit precluded the firm from seeking a refund. Further, the court affirmed that the liabilities of the firm as of the date of the partner's death needed to be settled before any appropriation by the Revenue. The court concurred with the single judge's decision to quash the disputed communications and directed the Revenue to settle the accounts based on the judgment's observations and directions. Ultimately, the court found no grounds to interfere with the judgment and dismissed the writ appeal, upholding the original decision in favor of the respondent firm.
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