Kamaraj Salai 680 003,Tuticorin v. The Commissioner Of Income Tax-I (

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 29.06.2017 CORAM: THE HONOURABLE MR.JUSTICER.SUBRAMANIAN W.P.(MD).No.10885 of 2011 and M.P.(MD).Nos.1 and 2 of 2011 M/s.Agasthiya Holdings Private Limited,Kochi through its Authorised Signatory S.S.Sarmahaving its Branch Office at Tuticorin at Door No 36/1, Second Street, Muniasamypuram, Kamaraj Salai 680 003,Tuticorin. ...Petitioner Vs. 1.The Commissioner of Income Tax-I (1/C), 2.V.P.Rathinasamy Nadar Road, Bibikulam, Madurai-2. 2.The Tax Recovery Officer, Income Tax Office, WGC Road, Tuticorin. 3.The Secretary Commissioner Registration, Government of Tamilnadu, St.George, Chennai. 4.The Sub-Registrar Joint I, District Registrar Office, Tuticorin. 5.J.Vivekavathi 6.J.Jeyasekar 7.J.Sampathkumar 8.J.Subramanian 9.J.Prakash 10.J.Shankar 11.D.Kalaiselvi ... Respondents Petition filed under Article 226 of the Constitution of Indiapraying to issue a Writ of Certiorari, to call for records of theimpugned order passed by the first respondent in C.No.TRC/CIT-I/2010-11 dated 03/03/2011 and consequential orders passed bysecond respondent in T.R.No.31003 to 31009/TTN/10-11 datedhttps://hcservices.ecourts.gov.in/hcservices/09.08.2011 and quash the same. For Petitioner :Mr.P.S.SundaramFor Respondents 1 & 2 :Mrs.S.SrimathyFor Respondents 3 & 4 :Mr.S.Satheesh Kumar Additional Government PleaderFor Respondents 5,7 & 8 :Mr.S.ArchunaFor Respondents 6,9,10 & 11 : No appearance ORDER The challenge in this writ petition is to the order dated09.08.2011 passed by the second respondent namely, the TaxRecovery Officer in T.R.No.31003 to 31009/TTN/10-11 in and bywhich, the Recovery Officer has declared the sale in favour of thepetitioner in respect of property situate at Door No.27,Toovipuram, 5[th] Street, Tuticorin under sale deed 18.06.2008 bythe alleged defaulters as null and void, in view of the fact thatthe said property has been attached by the department for theincome-tax arrears of the vendors as early as on 06.01.1988. 2.The second schedule of the Income-tax Act, 1961provides for procedure for recovery of tax. One of the modes ofrecovery of tax is by attachment and sale of the defaulter'simmovable property as per Rule 4 of the second schedule. Rule 11provides for adjudication of claims made to the attachment orsale of, any property in execution of a certificate, issued by theTax Recovery Officer. Rule 16 provides where a notice has beenserved on a defaulter under rule 2, the defaulter or hisrepresentative interest shall not be competent to mortgage,charge, lease or otherwise deal with any property belonging tohim except with the permission of the Tax Recovery Officer. Rule16 (2) reads as follows. “.....(2)Where an Attachment has been made under thisSchedule, any private transfer or delivery of the propertyattached or of any interest therein and any payment to thedefaulter of any debt, dividend or other moneys contrary to suchattachment, shall be void as against all claims enforceable underthe attachment.” 3.Rule 48 provides for attachment of the immovableproperty and Rule 50 provides for proclamation of attachment. Theimpugned order has been passed by the Tax Recovery Officer underRule 16 (1) and (2). A reading of Rule 16 (1) and (2) would showthat the Tax Recovery Officer has no power to declare thealienation as null and void. Accordingly, the impugned order isliable to be quashed and it is quashed. However, it is made clearthat the department is at liberty to proceed against theproperties of the defaulters which according to the departmenthave been attached on 06.01.1988. It is open to the petitioner tohttps://hcservices.ecourts.gov.in/hcservices/approach the Tax Recovery Officer under Rule 11(1) claiming thatthis property is not liable for attachment. Once such claim is preferred, it is for the Tax Recovery Officer to adjudicate thesale of the property under Rule 11. If the claim is rejected, theaggrieved party has got a right to move the Civil Court toestablish his right. The writ petition is accordingly allowed.Rule nisi is made absolute. However, the right of the departmentto proceed against the property on the basis of the attachmentmade on 06.01.1988, is protected with liberty to the petitioner tomove the Tax Recovery Officer under Rule 11 seeking adjudicationof his claim. No costs. Consequently, M.P(MD)Nos.1 and 2 of 2011are closed. Sd/- Assistant Registrar(CS-III) To: / True Copy / Sub Assistant Registrar(C.S.) 1.The Commissioner of Income Tax-I (1/C), 2.V.P.Rathinasamy Nadar Road, Bibikulam, Madurai-2. Bibikulam, Madurai-2. 2.The Tax Recovery Officer, Income Tax Office, WGC Road, Tuticorin. 3.The Secretary Commissioner Registration, Government of Tamilnadu,St.George, Chennai. 4.The Sub-Registrar Joint I, District Registrar Office, Tuticorin. +1cc to M/S.S.SRIMATHY, Advocate SR.No.62943 +1cc to M/S.G.ANBU SARAVANAN, Advocate SR.No.62793 +1cc to Special Government Pleader, SR.No.62843 rmi/vsgMAS/MR-KKR/SAR1:19.07.2017:3P-8C