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Pylee Vs. the Tax Recovery Officer and anr. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberO.P. No. 2058 of 1965
Judge
Reported inAIR1968Ker64
ActsIncome Tax Act, 1961; Income Tax Rules - Rule 11
AppellantPylee
RespondentThe Tax Recovery Officer and anr.
Appellant Advocate V. Rama Shenoi and; K. Nilakanta Menon, Advs.
Respondent Advocate C.T. Peter, Adv.
Excerpt:
.....the said investigation, the tax recovery officer is satisfied that, for the reason stated in the claim or objection, such property was not, at the said date in the possession' of the defaulter or of some person in trust for him or in the occupancy of a tenant or other person paying rent to him, or that, being in the possession of the defaulter at the said date, it was so in his possession, not on his own account or as his own property, but on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the tax recovery officer shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or sale. (5) where the tax recovery officer is satisfied that the property was, at the said date, in..........a certificate, on the ground that such property is not liable to such attachment or sale the tax recovery officer shall proceed to investigate the claim or objectionprovided that no such investigation shall be made where the tax recovery officerconsiders that the claim or objection was designedly or unnecessarily delayed.(2) where the property to which the claim or objection applies has been advertised for sale, the tax recovery officer ordering the sale may postpone it pending the investigation of the claim or objection, upon such terms as to security or otherwise as the tax recovery officer shall deem fit.(3) the claimant or objector must adduce evidence to show that--(a) (in the case of immovable property) at the date of the service of the notice issued under this schedule to pay.....
Judgment:
ORDER

P. Govindan Nair, J.

1. Certain Roods alleged to be owned and possessed by the petitioner were attached by the Tax Recovery Officer (The Tahsildar Alwaye) under the Indian Income-tax Act, 1961 on 22-7-1965 for realisation of tax alleged to be due from one Kuruvila who is the son of the writ applicant. The certificate issued was for Rs. 854-27. On 29-7-1965, the petitioner preferred a claim petition as envisaged by Rule II of the second Schedule to the Income-tax Act 1961 asserting that the goods were owned and possessed by the petitioner, that those were not liable for attachment and prayed that the Roods be released. The enquiry relating to this claim petition was apparently posted for 9-8-1965. On that day the petitioner moved for an adjournment appearing by counsel, who also prayed for the release of the goods on any condition that the first respondent may be willing to impose. As no orders relating to the goods were passed, this writ application was moved and it was admitted on 11-8-1965. On the same day by the order on C. M. P No. 5324 of 1965, the attached goods were directed to be released on condition that petitioner furnished cash security for the amount due.

2. It appears that the said Kurien, the son of the petitioner paid the amount of Rs. 854-27 for which the certificate was issued. The goods however were not released because it was claimed that a further sum of Rs. 97-69 was still due. The petitioner thereafter deposited that amount as security and got the goods released on 16-8-1965.

3. His complaint is that without any justification the attachment has been effected and quite arbitrarily the goods were detained without an investigation being made of the claim that was put forward by the petitioner Rule 11 of Schedule 2 of the Indian Income-tax Act. 1961, is in these terms:

'(1) Where any claim is preferred to, or any objection is made to the attachment or sale of any property in execution of a certificate, on the ground that such property is not liable to such attachment or sale the Tax Recovery Officer shall proceed to investigate the claim or objection

Provided that no such investigation shall be made where the Tax Recovery Officerconsiders that the claim or objection was designedly or unnecessarily delayed.

(2) Where the property to which the claim or objection applies has been advertised for sale, the Tax Recovery Officer ordering the sale may postpone it pending the investigation of the claim or objection, upon such terms as to security or otherwise as the Tax Recovery Officer shall deem fit.

(3) The claimant or objector must adduce evidence to show that--

(a) (in the case of immovable property) at the date of the service of the notice issued under this Schedule to pay the arrears, or

(b) (in the case of movable property) at the date of the attachment, he had some interest in, or was possessed of, the property in question.

(4) Where, upon the said investigation, the Tax Recovery Officer is satisfied that, for the reason stated in the claim or objection, such property was not, at the said date in the possession' of the defaulter or of some person in trust for him or in the occupancy of a tenant or other person paying rent to him, or that, being in the possession of the defaulter at the said date, it was so in his possession, not on his own account or as his own property, but on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the Tax Recovery Officer shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or sale.

(5) Where the Tax Recovery Officer is satisfied that the property was, at the said date, in the possession of the defaulter as his own property and not on account of any other person, or was in the possession of some other person in trust for him. or in the occupancy of a tenant or other person paying rent to him, the Tax Recovery Officer 'shall disallow the claim.

(6) Where a claim or an objection is preferred, the party against whom an order is made may institute a suit in a civil court to establish the right which he claims to the property in dispute; but, subject to the result of such suit (if any), the order of the Tax Recovery Officer shall be conclusive.'

4. What transpired after the 9th of August, 1965 is not clear at all. It is a case in which the Tax Recovery Officer has not carried out his obligations under the statute.

5. It is not enough to state before this Court in an affidavit that the officer was satisfied that the goods belonged to the defaulter. If he had any material or grounds for so thinking those grounds must be made available to the claimant so that he may meet it. It is not a case of an unsatisfactory enquiry but there being no enquiry at all.

6. I therefore direct the first respondent to take the claim application Ext. P-6 and deal with it in accordance with law and in the Light of what is stated herein and pass appropriate orders stating the reasons for the conclusion.

7. This writ application is disposed ofas above. There will be no direction regarding costs.


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