9911796707
TMI Blog2001 (6) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... t on March 26, 1947 from Matta Peda Subbaiah and others. Sri Lakshman Rao, his son had constructed a RCC building on the said land. Sri Appana Ramalingeswara Rao, partner of M/s. Challamamba Coconut Products and Proprietor of M/s. Hindustan Coconut Oil Industries purchased an extent of 430 sq. yards and the building from Sri Govindarajulu Venkateswara Rao and his children who are the legal representatives of Sri Govindarajulu Venkateswara Rao under the registered sale deed dated July 17, 1995. On March 7, 1996, Appana Ramalingeswara Rao, the fourth respondent herein, mortgaged the said property, i.e., 215 sq. yards to each of the petitioners as security for a loan of Rs. 3,00,000. Subsequently on August 2, 1996 the fourth respondent herein being unable to discharge the loan sold the property to the petitioners and delivered possession of the same in consideration of the full discharge of the loan amount with interest. 2.. M/s. Challamamba Coconut Products is a dealer registered under the Andhra Pradesh General Sales Tax Act, 1957 ("the Act", for brevity) in which the 4th respondent herein is a partner. The fourth respondent is also the proprietor of M/s. Hindustan Coconut Oil Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petent to declare the subject sales as void and such a declaration could be granted only by a competent civil court. In support of this contention the learned counsel would place strong reliance on the judgment of the apex Court in Tax Recovery Officer II, Sadar, Nagpur v. Gangadhar Viswanath Ranade [1998] 234 ITR 188; (1998) 6 SCC 658; (1998) 7 Supreme 268. The learned counsel would maintain that if the first respondent wants to attach the property of the petitioners he should first approach the civil court for a declaratory decree that the transfers in question are void before proceeding to attach the property for sale. Thirdly, the learned counsel would contend that even in terms of section 17-A of the Act, a petition to get the transfer declared as void can be filed by the Tax Recovery Officer before the competent court only when some proceeding is pending. The expressions "during the pendency of any proceeding" in section 17-A refers only to the proceedings for recovery of tax. In the instant case, the learned counsel would maintain, there was no demand for tax prior to the sale transactions and no proceedings for recovery of tax were pending and, therefore, the question of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to separate altogether the question of possession and of title. Thus, if the judgment-debtor was in possession, he may have been in possession as agent or trustee for another, and this has to be enquired into. To that extent, title may be a part of the inquiry. Similarly, if the property attached is claimed by a third party who adduces evidence to show that he was possessed of the property under some kind of a title, the property will have to be released from attachment. The procedure is not meant to decide intricate questions of law as to title to the property. Therefore, where a claim is made to the property attached, by someone claiming to be a transferee from the judgment-debtor and the claim is disallowed, the claimant can institute a suit under order XXI, rule 63, to establish his title to the property. In such a suit it would be open to the attaching creditor to plead in defence that the transfer was in fraud of the general body of creditors and was void under section 53 of the Transfer of Property Act. Similarly, if the claim of the transferee is allowed, the attaching creditor may sue on behalf of himself and all other creditors under section 53 of the Transfer of Prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount due under this Act. (3) Notwithstanding anything contained in the Andhra Pradesh Rent and Revenue Sales Act, 1839, the Deputy Commercial Tax Officer in the exercise of the powers conferred by sub-section (2) shall be subject to the control and superintendence of the Deputy Commissioner." Section 27 of the Revenue Recovery Act reads"27. Mode of attachment.-The attachment shall be effected by affixing a notice thereof to some conspicuous part of the land. The notice shall set forth that unless the arrears, with interest and expenses, be paid within the date therein mentioned, the land will be brought to sale in due course of law. The attachment shall be notified by public proclamation on the land, and by publication of the notice in the District Gazette." 8.. It is also relevant to notice the provisions of section 17 of the Revenue Recovery Act inasmuch as it will have a bearing on the decision-making in these cases. Section 17 of the Revenue Recovery Act reads: "17. Claims to property distrained and sold Revenue to be the first charge.-Where any person, not being a defaulter or responsible for a defaulter, may claim a right to the property distrained, and the distrai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not assailed before us. Therefore the provisions contained in section 17 of the Revenue Recovery Act should be given effect to. In that view of the matter, we should state the judgment of the apex Court in Gangadhar Viswanath Ranade's case [1998] 234 ITR 188; (1998) 6 SCC 658; (1998) 7 Supreme 268 has no application to the facts of the present case. In that case, the apex Court was considering the provisions of the Income-tax Act and rule 11 of the Second Schedule to the Income-tax Act and held that wherever the claim of the third party relating to the title to the distraint property arises, the tax recovery officer will necessarily have to get the title adjudicated before a court of competent civil jurisdiction. In the instant case the recovery proceedings are undertaken under section 27 of the Revenue Recovery Act read with section 17-C of the Act and, therefore, the provisions of section 17 of the Revenue Recovery Act are equally applicable. If the provisions of section 17 of the Revenue Recovery Act are attracted, it makes abundantly clear that the first respondent will have undoubtedly the power to attach the property of even a third party and it is open for the third part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) during the pendency of any proceeding; and (ii) after completion thereof. If the contention of the learned counsel for the petitioners is accepted and the meaning of the words "any proceeding" occurring in section 17-A of the Act is restricted only to a proceeding after completion of assessment, the second limb of section 17-A of the Act would be rendered nugatory. It is trite to state that recovery proceedings would be taken to have been completed only when the total tax payable has been recovered. If that is so and if the contention of the learned counsel for the petitioners is accepted, the second limb of section 17-A of the Act would become totally superfluous and unnecessary and such an interpretation is totally impermissible. Added to this, it is relevant to note that the words "any proceeding" occurring in section 17-A of the Act are not qualified by any preceding or succeeding words. Under these circumstances, these words should be given full meaning and content and if they are so given, understood and interpreted, the words "any proceeding" would include assessment proceedings also. In the instant case, admittedly assessment proceedings were initiated by issuing show c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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