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Issues:
1. Interpretation of the provisions of the Criminal Law Amendment Ordinance, 1944 regarding attachment of properties for realization of debts. 2. Determination of the liability of the receiver appointed by the District judge to pay income-tax on income received from attached properties. 3. Conflict between the Income Tax Act and the provisions of the Ordinance in relation to tax liability on attached properties. 4. Validity of the District judge's order directing refund of income tax payments made on attached properties. 5. Assessment of income tax on income received by the receiver from attached properties during the continuance of the attachment. Analysis: The judgment delivered by the High Court of Calcutta involved a case where properties belonging to a deceased individual were attached under the Criminal Law Amendment Ordinance, 1944, to realize a debt owed by the deceased. The District judge acted as custodia legis of the properties, appointing a receiver to collect income for debt liquidation. The issue arose when the Income Tax Department sought to recover income tax from the attached estate. The court referenced a previous order from 1962, which stated that the amount due should first go towards the debt, and only then could the Income Tax Department proceed. This led to a dispute regarding the liability of the receiver to pay income tax on the estate's income. The petitioner argued that the receiver, as the representative of the assessee, was liable to pay income tax under the Income Tax Act unless specifically exempted. The petitioner contended that the ownership of the properties was not lost due to attachment, and tax liability remained. Additionally, it was argued that the District judge misinterpreted the previous court order, leading to an illegal directive for income tax refund. On the other hand, the respondent, representing the deceased's estate, argued that the properties were under attachment for debt liquidation, and no other payment, including income tax, should take precedence over debt repayment. It was contended that the income from the attached properties should not be subject to income tax due to the Ordinance's provisions. The court analyzed the previous court order and concluded that while income tax authorities could not recover tax during the attachment period, the receiver's liability for income tax was not definitively decided. The court set aside the District judge's order for income tax refund but restrained the authorities from recovering tax during the attachment period. The Income Tax Department was allowed to assess income tax based on the receiver's income statements but could not recover tax until the attachment was lifted. In summary, the judgment clarified the interplay between the Ordinance and the Income Tax Act regarding tax liability on attached properties, emphasizing debt repayment priority during attachment while allowing for future tax assessments post-attachment release.
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