Gujarat High Court
Nutanben Jagdish Shah vs Tax Recovery Officer - 6 & on 20 April, 2017
Author: M.R. Shah
Bench: M.R. Shah, B.N. Karia
C/SCA/1881/2015 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 1881 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH Sd/-
and
HONOURABLE MR.JUSTICE B.N. KARIA Sd/-
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of
the judgment ?
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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NUTANBEN JAGDISH SHAH....Petitioner(s)
Versus
TAX RECOVERY OFFICER - 6 & 1....Respondent(s)
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Appearance:
MR TEJ SHAH, ADVOCATE for the Petitioner(s) No. 1
MR MANISH BHATT, SENIOR ADVOCATE with
MR SUDHIR M MEHTA, ADVOCATE for the Respondent(s) No. 1
MRS MAUNA M BHATT, ADVOCATE for the Respondent(s) No. 2
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CORAM:HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
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Date : 20/04/2017
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.00. By way of present petition under Article 226 of the Constitution of India, the petitioner - daughter of the original assessee, who has inherited the property from her mother (wife of the original assessee) has prayed for an appropriate writ, order and/or direction directing the respondent to lift attachment in respect of the subject property.
2.00. It appears that some entry was made in the revenue record with respect to some dues of the original assessee - father of the petitioner Shri Babubhai and in the revenue record the said entry was made somewhere in the year 1979 and thereby the property in question was attached owing to an outstanding demand under section 156 of the Income Tax Act. It is submitted on behalf the petitioner assessee that the original assessee Babubhai expired in the year 1997 and on his death, his widow Savitaben (mother of the petitioner) inherited the said property and that even widow of Babubhai - original assessee also expired in the year 2002. That thereafter, the property in question came to be inherited by the widow of the original assessee to the present petitioner as daughter of the original assessee. That thereafter when the petitioner wanted to dispose of the property by way of charity, she came to know about the entry in the revenue record and with respect to attachment of the property by the Income Tax Department with respect to the alleged dues of the original assessee - father of the petitioner. The petitioner immediately requested the department to inform her about the actual Page 2 of 9 HC-NIC Page 2 of 9 Created On Wed Aug 16 03:25:47 IST 2017 C/SCA/1881/2015 JUDGMENT demand and/or any order of attachment. However, the respondent department was unable to inform the petitioner with respect to actual demand payable of tax, penalty, interest, if any, being old one and the order of attachment came to be continued. Hence, the present petitioner has preferred the present petition.
3.00. At the time of admission hearing of the present petition and while admitting the present petition, this Court passed the following order on 6/5/2015 :
"[1.0] RULE. Shri Sudhir Mehta, learned Advocate waives service of notice of Rule on behalf of respondent No.1 and Mrs. Mauna Bhatt, learned Advocate waives service of notice of Rule on behalf of respondent No.2. [2.0] Heard learned Advocates appearing on behalf of respective parties on interim relief. [3.0] By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for an appropriate writ, direction and order directing the respondent to lift the attachment in respect of the subject property in absence of any outstanding demand. It is also further prayed for an appropriate writ, direction, order directing the respondent to communicate the petitioner in case of any outstanding demand due of her father Shri Babubhai and on payment of such demand to lift the attachment.
[4.0] Learned advocates appearing on behalf of
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the respective respondents are not in a position to point out any specific outstanding demand due of the father of the petitioner. However, from the village Form No.7/12 and mutation entry dated 20.03.1980 in the revenue record with respect to the property in question it appears that there is some reference to the income tax dues of the original assessee Shri Babubhai Motibhai Shah father of the petitioner on the basis of the order dated 16.11.1979 passed by the Recovery Officer, Central Circle, Ahmedabad and for the dues of Rs.1,33,366/- the land in question is attached for which necessary mutation entry is made in the revenue record. Learned advocates appearing on behalf of the respective respondents have not produced any order/recovery notice. They are also not in a position to justify their inaction in recovering the amount from the property of the assessee including the property in question and as such the attachment has been continued since 1979. It is required to be noted that the original assessee against whom there are dues of the Income Tax Department of Rs.1,33,366/- has died expired as far as back on 03.01.1997 and thereafter the property in question was bequeathed in favour of his wife mother of the petitioner and thereafter even the mother of the petitioner has also died since long and the petitioner has inherited the property in question. Despite number of reminders since the year 2010 by which the petitioner has called upon the Assessing Officer to communicate him the details of the outstanding demand so that the petitioner can make the payment and the attachment with respect to the Page 4 of 9 HC-NIC Page 4 of 9 Created On Wed Aug 16 03:25:47 IST 2017 C/SCA/1881/2015 JUDGMENT land in question is lifted. However, there is no response whatsoever from any of the authorities and therefore, the petitioner is constrained to approach this Court. Even in the present proceedings also the concerned respondents are not in a position to give the details of the outstanding demand against the original assessee Shri Babubhai Shah. The attachment has been continued since 1979. No efforts whatsoever are made by the authority to recover the outstanding demand and/or release the amount by selling the property in question. By now, more than 26 years are passed and the petitioner has shown her willingness to deposit/pay the outstanding demand and on that to lift the attachment.
[5.0] In view of the above facts and circumstances of the case, by way of interim relief it is directed that on deposit of Rs.1,33,366/- with simple interest at the rate of 6% per annum from January 1980 till April 2010 before Tax Recovery Officer, Central Circle, Ahmedabad respondent No.2 herein, the attachment with respect to the land in question is ordered to be lifted. However, the aforesaid shall be subject to the ultimate outcome of the main Special Civil Application without prejudice to the rights and contentions of the respective parties in main Special Civil Application."
4.00. It is reported that thereafter the petitioner has deposited an amount of Rs.1,33,366/- with simple interest at the rate of 6% per annum from January 1980 till April 2010 Page 5 of 9 HC-NIC Page 5 of 9 Created On Wed Aug 16 03:25:47 IST 2017 C/SCA/1881/2015 JUDGMENT before Tax Recovery Officer, Central Circle, Ahmedabad and on such deposit, attachment has been lifted. However, the aforesaid deposit by the petitioner is subject to ultimate outcome of the present petition.
5.00. We have heard Mr.Tej Shah, learned advocate appearing on behalf of the petitioner and Mr.Manish Bhatt, learned counsel appearing on behalf of the revenue.
5.01. At the outset, it is required to be noted that even as on today also the revenue is not in a position to produce any order of attachment and/or any order of tax, penalty, interest, for which order of attachment has been passed. It is not in dispute that the order of attachment has been passed in the year 1979. However, thereafter no steps whatsoever has been taken by the department to auction the property and/or sale the property attached and the order of attachment has been continued for more than 30 years thereafter. Considering the provisions of Rule 66(B) of Schedule-2 to the Income Tax Act, order of attachment cannot be continued. Rule 68B of Schedule 2 to the Income Tax Act reads as under :-
"68B. Time-limit for sale of attached immovable property.-
(1). No sale of immovable property shall be made under this Part after the expiry of three days from the end of the financial year in which the order giving rise to a deemed of any tax, interest, fine, penalty or any other sum, for the recovery of which the immovable property has been attached, has become conclusive under the provisions of section 245-I or, as the case may be, final in terms of the provisions of Chapter XX :Page 6 of 9
HC-NIC Page 6 of 9 Created On Wed Aug 16 03:25:47 IST 2017 C/SCA/1881/2015 JUDGMENT Provided that where the immovable property is required to be resold due to the amount of highest bid being less than the reserve price or under the circumstances mentioned in rule 57 or rule 58 or where the sale is set aside under rule 61, the aforesaid period of limitation for the sale of the immovable property shall stand extended by one year.
(2). In computing the period of limitation under this sub-rule (1), the period -
(i). during which the levy of the aforesaid tax, interest, penalty or any other sum is stayed by an order or injunction of any court, or
(ii). during which the proceedings of attachment or sale of the immovable property are stayed by an order or injunction of any court; or
(iii). commencing from the date of presentation of any appeal against the order passed by the Tax Recovery Officer under this Schedule and ending on the day the appeal is decided, shall be excluded;
Provided that where immediately after the exclusion of the aforesaid period, the period of limitation for the sale of the immovable property is less than 180 days, such remaining period shall be extended to 180 days and the aforesaid period of limitation shall be demand to be extended accordingly.
(3). Where any immovable property has been attached under this Part before the 1st of June, 1992, Page 7 of 9 HC-NIC Page 7 of 9 Created On Wed Aug 16 03:25:47 IST 2017 C/SCA/1881/2015 JUDGMENT and the order giving rise to a demand of any tax, interest, fine, penalty or any other sum, for the recovery of which the immovable property has been attached, has also become conclusive or final before the said date, that date shall be deemed to be the date on which the said order has become conclusive or, as the case may be, final.
(4). Where the sale of immovable property is not made in accordance with the provisions of sub-rule (1), the attachment order in relation to the said property shall be deemed to have been vacated on the expiry of the time of limitation specified under this rule.
Under the circumstances, on the aforesaid ground alone, present petition deserves to be allowed and the impugned order of attachment deserves to be quashed and set aside.
6.00. In view of the above and for the reasons stated above, present petition succeeds. The impugned order of attachment of the property in question for the alleged dues of original assessee - father of the petitioner herein, for the dues prior to 1979, is hereby quashed and set aside.
It goes without saying that whatever the amount deposited pursuant to the interim order, the petitioner shall be refunded the said amount with interest thereon at the rate of 6% per annum from the date of such deposit till it is refunded. The aforesaid amount with interest to be refunded to the petitioner within a period of thee months from today, failing which it shall carry interest at the rate of 9% per annum.
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However, it is clarified that it will be open for the department to recover the amount of tax, penalty, interest, if any, of the original assessee, which seems to be prior to at least 1979, if permissible under the law now.
Rule is made absolute to the aforesaid extent. In the facts and circumstances of the case, there shall be no order as to costs.
Sd/-
(M.R. SHAH, J.) Sd/-
(B.N. KARIA, J.) Rafik Page 9 of 9 HC-NIC Page 9 of 9 Created On Wed Aug 16 03:25:47 IST 2017