9911796707
TMI Blog1974 (7) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of convenience. The 1st respondent (plaintiff) and Jayalakshmi paid up the portions of the tax and the third partner, Balasubramaniam's liability remained undischarged. In the proceedings for recovery of the said balance of tax due, a printing machine, exclusively owned and belonging to the said Balasubramaniam, was attached, on or about April 1, 1966. Subsequent to the said attachment one Suryanarayana, the 2nd respondent-3rd defendant, filed a suit on a mortgage dated October 10, 1963, and he had included the printing machine in question as one of the properties so mortgaged and obtained a decree. In the meanwhile, the 3rd respondent-4th defendant put forth a claim for prior charge on the basis of a pledge before the civil court in the aforesaid proceedings, which was allowed. The machine, however, was permitted to be sold by the 3rd respondent-bank and the sale proceeds thereof were first appropriated towards the dues of the bank, and the balance came to be paid over in discharge of the decree held by the 2nd respondent, Suryanarayana. In view of the aforesaid decree and further proceedings, a claim was preferred before the Tax Recovery Officer alleging that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid finding of the learned munsiff and remanded the suit for hearing on the other issues. Hence this appeal. Before the learned civil judge, in appeal, the entire matter seems to have been argued on the basis of the scope of the provisions of section 293 of the Income-tax Act, in the light of certain reported decisions of the Supreme Court. The learned civil judge, placing reliance on the enunciation of the principles bearing on the question of a right of suit, available to an assessee under the Sales Tax Act, in the context of section 9, Civil Procedure Code and the relevant provisions of the taxing statute concerned, held that the present suit was maintainable. Before us, on behalf of the appellant, the same contention as was urged before the learned civil judge has been reiterated by his learned counsel. It is argued that having regard to the wide meaning ascribable to the word " assessment ", on the authority of certain decided cases, which, however, were not cited, the operation of the provisions of section 293 of the Income-tax Act, 1961, must be extended to recovery proceedings also as in the case on hand. In support of such a proposition, reliance has been placed on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view such a provision relating to a prior charge or paramount lien is plainly intended for the benefit of the income-tax authority, and, therefore, left to its discretion to have recourse to it or not in any given case. It may also be mentioned that one of the contentions urged on behalf of the plaintiff-1st respondent, before the learned civil judge in appeal, has been that Balasubramaniam, the owner of the machinery in question, had not been notified of the claim proceedings initiated by the bank before the Tax Recovery Officer, and this being a clear violation of fundamental principles of judicial procedure, such proceedings are null and void and did not operate to create any rights in favour of the claimant therein. This contention found favour with the learned civil judge, although he had earlier come to the conclusion that such a suit would be barred in view of section 293 of the Income-tax Act. It is only in the light of such a conclusion he held that the suit would not be barred. We are of opinion that this conclusion is clearly erroneous. Assuming, without deciding, that such a question of want of notice could not be raised before the Tax Recovery Officer himself, ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us : " 9. Except as otherwise expressly provided in this Act, every question arising between the Income-tax Officer and the defaulter or their representatives, relating to the execution, discharge or satisfaction of a certificate duty filed under this Act, or relating to the confirmation or setting aside by an order under this Act of a sale held in execution of such certificate, shall be determined, not by suit, but by order of the Tax Recovery Officer before whom such question arises : Provided that a suit may be brought is a civil court in respect of any such question upon the ground of fraud. " (Underlining ours) It is clear from the above provision that any discharge or satisfaction of the liability under a certificate of recovery can only be agitated before the Tax Recovery Officer and not by way of a suit. Provision, however, has been made for the filing of a suit only on the ground of fraud. We have earlier dealt with the circumstances bearing on the question of " fraud " and concluded that the same did not arise from the relevant allegations in the pleadings on which some reliance had been placed on behalf of the 1st respondent. Hence, there is no question of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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