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Issues: Ownership of vehicles, Competency of TRO to issue direction
Ownership of vehicles: The judgment revolves around the ownership of eight vehicles registered in the name of a deceased individual, with conflicting claims between the partnership firm and the deceased's legal representative. The partnership firm, operating with a capital of Rs. 10,000, is said to have utilized the deceased's assets for business purposes. The deceased's name is recorded as the owner of the vehicles, leading to a dispute over ownership. The petitioner argues that the vehicles were registered in the deceased's name as a managing partner of the firm, suggesting the transfer to the current managing partner is a mere formality. However, determining the true ownership requires a detailed examination of the vehicles' registration history and other relevant factors, making it a complex issue not suitable for resolution in the current proceedings. Competency of TRO to issue direction: The primary issue addressed in the judgment is the competence of the Tax Recovery Officer (TRO) to issue a direction prohibiting the transfer of ownership of vehicles registered in the deceased's name. The TRO relied on Rule 16 of the 2nd Schedule to the Income Tax Act, which restricts a defaulter or their representative from dealing with property without permission. However, the rule does not explicitly empower the TRO to issue such directions. The judgment emphasizes that Rule 16 does not prohibit transfers but limits the defaulter's competence to effect transfers to safeguard revenue interests. As such, the TRO's directive prohibiting ownership transfer is deemed incompetent and declared inoperative, allowing the State Transport Authority to proceed with its statutory functions. The judgment clarifies that the TRO lacks the authority to impede ownership transfers based on the provisions of Rule 16. The judgment concludes by allowing the original petition to the extent of declaring the TRO's directive as inoperative, maintaining the status of the ownership transfer application, and dismissing the request to issue an order against the State Transport Authority regarding the transfer. The decision emphasizes the limited scope of the TRO's powers in issuing prohibitory directions and underscores the need to uphold statutory procedures in matters of ownership transfer and revenue protection.
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