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TMI Blog2020 (3) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... e has initiated recovery proceedings. He however submitted that the recovery proceedings being civil in nature would however continue against the original petitioner No.1 and his estate in the hands of his legal-heirs and representatives. But in so far subject properties are concerned, he has fairly accepted the position that continuance of the attachment orders would now not be sustainable in law in view of the Letters of Administration issued to the trust. It is evident that the subject properties belong to the trust which was settled by Smt. Sushila R. Laliwala s Will before initiation of recovery proceedings by the Revenue against the original petitioner No.1. The said properties did not belong to the original petitioner No. 1 or his legal heirs / representatives. The trust being formed in the year 1978 and the Will of Smt. Sushila R. Laliwala made in 1985 much before initiation of recovery proceedings, there is no question of the said properties being diverted to the trust to evade payment of due tax. We set aside and quash the attachment orders dated 27th August 1997 being exhibits O1 , O-2 and O-3 in respect of the subject properties. The demand notice dated 20th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... October 2014 passed the following order :- This Petition under Article 226 of the Constitution of India, challenges:- (i) order dated 15th December 1993 issued under Section 179 (1) of the Income Tax Act, 1961 (the Act); (ii) demand notice dated 20th January, 1994; and (iii) three orders of attachment dated 27th August, 1997 and seven garnishee notices issues under Section 226 (e) of the Act. 2. This Petition was heard for sometime. We were not inclined to set aside the order dated 15th December 1993 passed under Section 179 (1) of the Act. 3. The controversy then remaining in the present Petition is whether the Revenue is entitled to attach the properties belonging to a Private Trust to recover dues of the trustees, who was a director of a Company which had allegedly defaulted in paying its tax dues. The contention of the Revenue appears to be that the property being attached does not belong to the Trust but is a property of one late Mrs. Sushila Laliwala- the mother of the defaulting trustee. Therefore, the properties could be attached to the extent it devolved upon the ex-director of the defaulting company as her legal heir. 4. At this stage, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the premise that the said properties belonged to petitioner No.1 in his individual capacity, has now been put to rest by virtue of the grant of Letters of Administration to the trust. He submitted that the subject properties which had been attached do not belong to the original petitioner No.1 Harish R. Laliwala in his individual capacity and in fact and law juridically belong to the trust. He submitted that, the observations made by this Court in paragraph Nos.4 and 5 of the order dated 27th August 2014 have been complied with and accordingly sought the reliefs claimed in the Petition. 6. Mr. Jagtiani also fairly submitted that in view of the observations recorded in paragraph No.2 of the above order, he would not press the challenge to the order dated 15th December 1993 passed under Section 179 (1) of the Income Tax Act, 1961 (hereinafter briefly referred to as the Act ) against the original petitioner No.1. He submitted that, he had instructions from the petitioners to not press for any consequential action of recovery of the garnishee amounts received by the Income Tax Department pursuant garnishee proceedings in respect of the subject properties. Mr. Jagtiani has therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,00,750/- by the Revenue. (vi) Respondent No.1 thereafter by order dated 15th December 1993 issued under Section 179 (1) of the Act held the original petitioner No.1 Harish R. Laliwala jointly and severally liable for payment of arrears of tax of ₹ 1,78,00,750/- in the case M/s. Verma Extrusions Pvt. Ltd. of which he was the Managing Director. (vii) For realisation of the above liability, by separate attachment orders dated 27th August 1997, respondent No.1 attached the three subject properties belonging to the trust on the premise that the said three properties belonged to the original petitioner No.1 in his individual capacity. (viii) The three properties as described in the attachment orders are as under : (a) Building Sushilaben , Road No.4, Khar (West). (b) Flat at Girichhaya , 5th Floor, Band Stand, Chowpati, Mumbai y 400 y 006. (c) Shop at Kothari Mansion, Ground Floor, Opp. Girgaon Court, Parekh Street, Mumbai - 400 - 004. (ix) Respondent No.1 also issued six garnishee notices under Section 226 (3) of the Act to respondent Nos.5 to 10 who were the tenants in the building Sushila Sadan at Khar. The seventh garnishee notice was is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame of the trust and do not belong to the original petitioner No.1 against whom the Revenue has initiated recovery proceedings. He however submitted that the recovery proceedings being civil in nature would however continue against the original petitioner No.1 and his estate in the hands of his legal-heirs and representatives. But in so far subject properties are concerned, he has fairly accepted the position that continuance of the attachment orders would now not be sustainable in law in view of the Letters of Administration issued to the trust. 11. We have also perused the order dated 19th January 1998 passed by this Court in Notice of Motion No.22 of 1996 in Execution Application No.205 of 1995 in Suit No.1695 of 1976 filed by United Commercial Bank Vs. M/s. Jai Hind Plastic and Rubber Industries and ors. This order came to be passed in an application made by the trust in respect of challenge to the attachment carried out by the plaintiff - Bank on one of the subject property, namely, Flat No.25, Giri Chhaya, Chowpati, Band Stand, Mumbai y 400 006. The issue before the Court was that ex-parte decree was passed against the defendant M/s. Jai Hind Plastic and Rubber Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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