COLLECTOR OF CUSTOMS & ORS. vs M/s. SOORAJMULL NAGARMULL & ANR.

The Supreme Court held that a notice issued under Section 46(5A) of the Income Tax Act, 1922 to the Collector of Customs constituted a valid garnishee order, allowing the Collector to pay the excess customs duty refund directly to the Income Tax authorities. The Court clarified that payment made by the Collector on behalf of the Union of India could be adjusted under Order 21 Rule 2 of the Civil Procedure Code, 1908, as it was not a voluntary payment but a statutory obligation. The High Court's refusal to allow the adjustment was overturned, affirming the validity of the garnishee payment mechanism.