9911796707
TMI Blog1973 (2) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... oner in Writ Petition No. 801 of 1970. The petitioner in Writ Petition No. 484 of 1969 is one Iqbal Begum and an extent of 12 acres, 43 cents which was purchased in her name under sale deeds dated December 15, 1963, and January 5, 1964, was attached and proclaimed for sale for the recovery of income-tax arrears due from her husband on the ground that the defaulter purchased the properties in the name of his wife, the petitioner, that the petitioner was a benamidar, that the real owner was the defaulter and that the properties had been in the possession and enjoyment of the defaulter. The attachment and the proclamation of sale in respect of property concerned in Writ Petition No. 1144 of 1970 were also made in identical circumstances. The property purchased in the name of the petitioner therein was a house property. The facts in Writ Petition No. 801 of 1970 could be mentioned at a later stage. In these writ petitions, the learned counsel for the petitioner conceded for the purpose of argument that the petitioners were benamidars and the legal or real ownership in the properties attached is vested in the defaulter, but he contended that the provisions of the Income-tax Act, 1961, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as in rules 58 to 61 and 63 of Order 21, Code of Civil Procedure. The provisions relating to proclamation of sale, the contents of the proclamation, the mode of making the proclamation, the time of sale and adjournments are contained in rules 52 to 55 and 15 of the Second Schedule corresponding to rules 64, 66 to 69 of Order 21, Code of Civil Procedure. The provisions in rules 57 to 68 of the Second Schedule relating to deposit by the purchasers, the procedure to be followed in default of payment, the applications to set aside the sale or confirmation of sales are identically worded as in rules 83 to 94 of Order 21, Code of Civil Procedure. Thus, it is seen the entire provisions relating to attachment and sale of immovable properties of the judgment-debtor found in the Code of Civil Procedure are incorporated in the Second Schedule as the procedure to be followed for attachment and sale of the defaulter's properties for the recovery of the arrears of income-tax due from the defaulter. It may be mentioned that the Indian Income-tax Act, 1922, did not provide for the procedure to be followed for the recovery of the arrears as it is now found in the Second Schedule, but section 46(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouses or other buildings, goods, money, bank notes, cheques, bills of exchange, hundis, promissory notes, Government Securities, bonds or other securities for money, debts, shares in a corporation and, save as hereinafter mentioned, all other saleable property, movable or immovable, belonging to the judgment-debtor, or over which, or the profits of which, he has a disposing power which he may exercise for his own benefit, whether the same be held in the name of the judgment-debtor or by another person in trust for him or on his behalf. " The proviso to this section sets out the properties which shall not be liable for such attachment or sale. Learned counsel for the petitioners, in support of his contention, relied on the last portion in the section which reads as : " whether the same be held in the name of the judgement-debtor or by another person in trust for him or on his behalf ", and contended that, but for the provision, even the civil court could not have the power to attach or sell properties held by another person in trust for the judgment-debtor. In the absence of a provision in the Income-tax Act similar to section 60 of the Code of Civil Procedure, it was contended, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Officer considers 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 oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontemplated in an enquiry in a claim petition. This implies that properties held in trust for the defaulter could be attached and sold. Rule 11, in our opinion, impliedly authorises the Tax Recovery Officer to attach and sell properties held by third parties benami for the defaulter. There can be no doubt that the power can be conferred by the enactment expressly as well as by necessary implication. In this connection, we may also usefully refer to some cases which deal with the implied power. In Y. R. Parpia v. Chamarbaugwalla, while considering section 4 of the Bombay Prize Competition Tax Act, it was held that when the section required that prize competition shall not be conducted unless a licence inrespect of such a competition has been obtained by the promoter thereof from the Collector, it carried with it also the implied power assumed in the section on the part of the Collector to issue a licence. In V. G. Row v. State of Madras, a Full Bench of this court considered a number of English and Indian cases on this aspect. That case concerned with the interpretation of the Criminal Law Amendment Act as amended in Madras. The Act was amended by the Madras Act 11 of 1950 which c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of recovering the amount due under a decree. The learned counsel wanted to interpret and understand this judgment as if it was because of section 60 of the Code of Civil Procedure only, this court upheld the power of attachment and sale. We are of the view that this is a narrow understanding of the judgment. What the learned judges repeatedly referred to in upholding the power was the right of the party to file a claim petition under Order 21, rule 58, Code of Civil Procedure and the ultimate right to file a suit. It is the absence of provisions similar to rules 58 to 63 of Order 21, Code of Civil Procedure, that formed the basis for holding that the Collector had no power to attach and sell the property not registered in the name of the defaulter under the Madras Revenue Recovery Act. In fact the learned judges distinguished the decision in Hiraluxmi Pandit v. Income-tax Officer on the ground that the relevant Revenue Recovery Act of Bihar appears to have contained a provision for preferring a claim to the attached property on the ground that the property belonged to the claimant and not to the defaulter and on the rejection of such a claim, the claimant has also a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but on account of or in trust for some other person, no preliminary enquiry is necessary. If this position is conceded, we do not see any logic in contending that only in the case of property standing in the name of some person other than the defaulter that a preliminary enquiry is necessary before attachment. If the Tax Recovery Officer is bona fide satisfied on the materials available before the attachment order was made, that the real owner was the defaulter, he can make an order of attachment. But this prima facie satisfaction of the Tax Recovery Officer is only an interim satisfaction and the order of attachment itself is an interin order subject to the enquiry under rule 11 and the final orders to be passed thereon. Unless, in the enquiry under rule 11, the Tax Recovery Officer is satisfied that the property was in the possession of some other person in trust for the defaulter he shall release the property from attachment. The satisfaction of the Tax Recovery Officer that the real owner was the defaulter is also subject to any suit that may be filed by the party aggrieved. It may also be noted that the Tax Recovery Officer at the stage of attachment might not be aware of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Assistant Commissioner in respect of the matters mentioned in sub-section (1) before he hears the assessee or gives him an opportunity of being heard. The final conclusion on the point as to whether the requirements of clauses (a), (b) and (c) of section 271(1) have been satisfied would be reached only after the assessee has been heard or has been given a reasonable opportunity of being heard." In Wiseman v. Borneman at page 277, Lord Reid observed: "It is, I think, not entirely irrelevant to have in mind that it is very unusual for there to be judicial determination of the question whether there is a prima facie case. Every public officer who has to decide whether to prosecute or raise proceedings ought first to decide whether there is a prima facie case but no one supposes that justice requires that he should first seek the comments of the accused or the defendant on the material before him. So there is nothing inherently unjust in reaching such a decision in the absence of the other party. Even where the decision is to be reached by a body acting judicially there must be a balance between the need for expedition and the need to give full opportunity to the defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Maharaja Ring, belonged to a partnership called T.M. Abdul Rahim Sahib Sons of which Abdul Sathar Sahib was a partner. On March 30, 1961, Abdul Sathar Sahib assigned his rights under the partnership along with his share in the trade marks, Maharajah and Maharajah Ring, to the petitioner and his brother. So far as these trade marks are concerned, though in the affidavit filed in support of the petition it as claimed that they are not attachable and saleable, probably in view of sections 39 and 40 of the Trade and Merchandise Marks Act, the learned counsel for the petitioner did not want to advance any arguments and requested us to leave out of consideration his case relating to these two trade marks. The trade mark bearing Sathukudi belonged to the said Abdul Sathar Sahib in his individual rights. He assigned the same under a registered document dated March 31, 1968, and the learned counsel fur the petitioner also produced the order of the Registrar of Trade Marks registering the same in the name of the petitioner and issuing the trade marks in his name. In respect of this trade mark, in addition to the two grounds already considered by us, the learned counsel for the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
