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TMI Blog2017 (12) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 281 of the Income Tax Act, is not taken away and if they so desire, initiate appropriate proceedings in accordance with law seeking such declaration. The petition is allowed accordingly. - Special Civil Application No.16626 of 2017 - - - Dated:- 20-12-2017 - MS. HARSHA DEVANI AND MR. A.S. SUPEHIA, JJ. For The Petitioner : Mr Sn Soparkar, Senior Advocate, with Mr Jaimin R Dave, Advocate For The Respondent : Mr Mr Bhatt, Senior Advocate, With Mrs Mauna M Bhatt, Advocate CAV JUDGMENT ( PER : HONOURABLE MR.JUSTICE A.S. SUPEHIA) (1) In the present writ petition, the petitioner has challenged the order dated 26.05.2017 passed by the respondentTax Recovery Officer under rule 16 of the Second Schedule of the Income Tax Act, 1961 whereby the property acquired by the petitioner by registered sale deed dated 25.03.2008 is sought to be declared null and void. (2) The brief facts, which are culled out from the record of the petition are as under: (3) The petitioner acquired property being 4, Golden Tulip Bungalows (Town Planning Scheme No.21/Final Plot No.198A), Shreyas Foundation, Ellis Bridge, Ahmedabad vide registered sale deed dated 25.03.2008 for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09.2017 came to be served upon Shri Harishbhai F. Shah, wherein the property is sought to be auctioned on 11.09.2017, which was communicated to the petitioner by Shri Harishbhai F. Shah on 05.09.2017. The petitioner is, therefore, constrained to approach this Court. (8) At the outset Learned Senior Counsel Mr.Soparkar for the petitioner has submitted that the Tax Recovery Officer has no jurisdiction, power or authority to declare the sale as void, and the only remedy available to the Revenue is to approach the Civil Court for such declaration. In support of his contention, he has relied on the decisions reported in the cases of Tax Recovery OfficerII, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade, 1998 LawSuit (SC) 902 and Karsanbhai Gandabhai Patel Vs. Tax Recovery Officer, [2014] 3 taxmann.com 415 (Gujarat). (9) He has also further submitted that the order dated 26.05.2017 is liable to be quashed and set aside on the short ground that it is passed in contravention of rule 16 of the Second Schedule. It was submitted that on a bare perusal of the said rule it becomes crystal clear that subrule (1) of rule 16 is applicable only when a notice is served upon the defaulter under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner Shri Harishbhai Shah by issuing notice on 27.09.2004. He has also contended that in the decision in the case of Gangadhar Vishwanath Ranade (supra), the Apex Court has dealt with section 281 read with Rules 11(4), (5) and (6) of the Second Schedule to the Act, which mandates the Tax Recovery Officer, hence the same will not apply to the facts of the present case. Reliance is also placed upon the decision in the case of Tax Recovery Officer Vs. Industrial Finance Corporation of India, 2011 LawSuit (Guj) 651. In view the aforesaid, he has urged that the present petition deserves to be dismissed. (11) Heard the learned counsel appearing on behalf of respective parties at length and perused the record of the case. (12) The core issue which falls for consideration is whether the Tax Recovery Officer has jurisdiction to declare the transaction of transfer of property as null and void under section 281 in the proceedings under rule 16 of the Second Schedule to the Act. (13) The facts established from record are that, the earlier order dated 28.09.2015 of declaring the sale as void was quashed and set aside vide judgment dated 02.02.2017 since during the pend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the stockintrade of the business of the assessee.] (14) Rule 16 of the Second Schedule to the Act, provides for private alienation to be void in certain cases which reads as under: 16. ( 1) Where a notice has been served on a defaulter under rule 2, the defaulter or his representative in interest shall not be competent to mortgage, charge, lease or otherwise deal with any property belonging 10 13 to him except with the permission of the Tax Recovery Officer, nor shall any civil court issue any process against such property in execution of a decree for the payment of money. ( 2) Where an attachment has been made under this Schedule, any private transfer or delivery of the property attached or of any interest therein and any payment to the defaulter of any debt, dividend or other moneys contrary to such attachment, shall be void as against all claims enforceable under the attachment. Thus, subrule (2) of rule 16 presupposes attachment made under schedule 2 of the Act. It is evident from the facts that in the present case the order of attachment dated 04.01.2005 was not in existence when the Notice under rule 2 was issued on 23.05.2017. It is p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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