Gujarat High Court
Sajid Salimbhai Saiyed vs Union Of India on 11 June, 2019
Author: J.B.Pardiwala
Bench: J.B.Pardiwala, A.C. Rao
C/SCA/8895/2019 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 8895 of 2019
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SAJID SALIMBHAI SAIYED
Versus
UNION OF INDIA
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Appearance:
MR ADIL R MIRZA(2488) for the Petitioner(s) No. 1
for the Respondent(s) No. 1,2,3,4
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CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
and
HONOURABLE MR.JUSTICE A.C. RAO
Date : 11/06/2019
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA)
1. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs :
"(A) Your Lordships may be pleased to admit and allow this petition;
(B) Your Lordships may be pleased to issue appropriate writ, order or direction, quashing and setting aside the communication dated 27.03.2019 issued by the respondent No.2 to the present petitioner; (C) Pending admission, hearing and final disposal of this petition, Your Lordships may be pleased to restrain the respondents more particularly respondent No.2 from implementing the communication dated 27.03.2019;
(D) Your Lordships may be pleased to grant such other and further relief/s that may be deemed fit and proper in the interest of justice."
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2. The subject matter of challenge in this writ application is the communication dated 27.03.2019 - Annexure-D to this petition addressed by the Tax Recovery Officer, Valsad to the writ applicant. The communication reads thus :
"No:VLS/TRO/AAS/2018-19/476 Date:2703.2019 To, Shri Sajid Salimbhai Saiyed 04, Hussaini Manzil, Imran Nagar, Vapi-396195 Sub: Recovery proceedings in the case of Shri Aziz Ahmed Shaikh-reg Please refer to the above
2. In connection with the above, it is to inform you that a huge demand in outstanding in the case of Shri Aziz Ahmed Shaikh, to recover the same the TRO, Central Range, Surat has attached his immovable property by issuing ITCP-16 dated 17.09.2012. The detail of the property is mentioned below:
Office No.36-37, 2nd Floor, Sahara Market, Imran Nagar, Vapi
3. In this connection, it is to inform you that the TRO has attached the above mentioned property under rule 48 of the second schedule of the income-tax Act, 1961 and by issuing order of attachment of the property TRO has prohibited and restrained the defaulter assessee from transferring or charging the property in any way and prohibited all the persons from taking any benefits under such transfer or charge.
4. Now it is found that you have purchased the above mentioned property from Shri Aziz Ahmed Shaikh on 23/12/2015 vide document no.9938 registered with the office of sub-registrar on 30/12/2015. In this connection, it is to inform you that an attachment order prohibits alienation or transfer of the immovable property by defaulter and such alienation becomes void under rule 16 of the second schedule of the Income-tax Act, 1961. Attachment is a notice to all concerned so that any person who accepts a private transfer of the Page 2 of 6 Downloaded on : Wed Jul 03 04:40:51 IST 2019 C/SCA/8895/2019 ORDER property by defaulter after an attachment cannot plead that he had no knowledge of attachment. Therefore, you are hereby ordered to vacant the above mentioned property in favour of TRO, Valsad before 10/04/2019. Your cooperation in this regard is highly solicited.
(Mukesh Kumar) Tax Recovery Officer, Valsad"
3. It appears from the materials on record that the writ applicant purchased immovable property in the form of Office Nos.36-37 situated on the 2nd Floor of Sahara Market, Imran Nagar, Vapi from one Shri Aziz Ahmed Shaikh. The Income Tax Department is to recover a huge amount from Shri Aziz Ahmed Shaikh towards tax liabilities. In such circumstances, the department issued a notice dated 17.09.2012 attaching the immovable property referred to above. The attachment was under Rule 48 of the second schedule of the Income Tax Act, 1961. It appears that the case of the department is that by issuing order of attachment of the property the TRO prohibited and restrained the defaulter assessee from transferring or charging the property in any way. Despite such notice of attachment issued to the erstwhile owner way- back in the year 2012, the property came to be transferred by way of a sale-deed on 23.12.2015 in favour of the writ applicant. The writ applicant claims to be the bonafide purchaser of the property for value without notice. It is his Page 3 of 6 Downloaded on : Wed Jul 03 04:40:51 IST 2019 C/SCA/8895/2019 ORDER case that he had no idea about any such notice being issued by the department to Shri Aziz Ahmed Shaikh and he had also no idea that the property was already attached by the department. The writ applicant seeks to rely on Section 281 of the Income Tax Act, 1961. Section 281 reads thus :
"Section 281:- Certain transfers to be void.
(1) Where, during the pendency of any proceedings under this Act or after the completion thereof, but before the service of notice under rule 2 of the Second Schedule, any assessee creates a charge on, or parts with the possession (by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever) of, any of his assets in favour of any other person, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the assessee as a result of the completion of the said proceeding or otherwise :
Provided that such charge or transfer shall not be void if it is made-
(i) For adequate consideration and without notice of the pendency of such proceeding or, as the case may be, without notice of such tax or other sum payable by the assessee; or
(ii) With the previous permission of the Assessing Officer.
(2) This section applies to cases where the amount of tax or other sum payable or likely to be payable exceeds five thousand rupees and the assets charged or transferred exceed ten thousand rupees in value.
Explanation. - In this section, "assets" means land, building, machinery, plant, shares, securities and fixed deposits in banks, to the extent to which any of the assets aforesaid does not form part of the stock-in- trade of the business of the assessee."
4. We take notice of the fact that by impugned Page 4 of 6 Downloaded on : Wed Jul 03 04:40:51 IST 2019 C/SCA/8895/2019 ORDER communication the writ applicant has been directed to handover vacant and peaceful possession of the property in question to the department.
5. We inquired with Mr. Mirza, the learned counsel appearing for the writ applicant whether his client has responded to such communication or not. Mr. Mirza, the learned counsel pointed out that his client has not so far responded in any manner to the said communication.
6. We are of the view that if the writ applicant is seeking to rely upon the proviso (i) to Section 281 of the Act, 1961, he needs to point out to the authority concerned that the purchase of the attached property was for adequate consideration and without notice of the pendency of any proceedings against the defaulter assessee under the Act and that too the transfer was before the service of notice under Rule 2 of the second schedule.
7. The writ applicant shall appear before the Tax Recovery Officer, Valsad at the earliest and adduce necessary evidence and also make good his case for discharging the notice/communication dated 27.03.2019 - Annexure-D to this petition. The authority concerned shall hear the writ applicant Page 5 of 6 Downloaded on : Wed Jul 03 04:40:51 IST 2019 C/SCA/8895/2019 ORDER and pass appropriate order in accordance with law. It is expected by the authority concerned not to take any coercive steps against the writ applicant till the completion of this exercise as directed by this Court.
8. With the above, this writ application is disposed of. Direct service is permitted.
(J. B. PARDIWALA, J) (A. C. RAO, J) Dolly Page 6 of 6 Downloaded on : Wed Jul 03 04:40:51 IST 2019