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2009 DIGILAW 1295 (MP)

Rajasthan Construction Company v. TRO

2009-11-23

A.M.SAPRE, S.K.SETH

body2009
JUDGMENT A.M. Sapre, J. 1. By filing this writ under Article 226/227 of Constitution of India, the Assessee seeks to challenge the order dated 12-1-1999 passed by TRO (Respondent No. 1) (Annexure P-14) under Rule 11(5) of Second Schedule of Income Tax Act (hereinafter referred to as called the Act). The notice of this writ was issued to Respondents (Revenue). They are served and duly represented. 2. Heard Mr. G.M. Chaphekar, learned senior counsel with Mr. R.T. Thanewala, learned Counsel for the Petitioner and Mr. R.L. Jain, learned senior counsel with Ms. V. Mandlik, learned Counsel for the Respondents. 3. Having heard the learned Counsel for the parties on perusal of record of the case, we have formed an opinion to allow the writ and while quashing the impugned order remand the case to TRO (R-1) for deciding the case of Petitioner on its merits afresh. It is for this reason, we do not consider it necessary to set out the entire facts in detail nor do we consider it necessary to record any categorical finding on the merits of the issues arising in the case except to the extent necessary to justify our remand order. 4. The dispute in substance in this writ centres around an order passed by Tax Recovery Officer under Rule 11(5) of the Second Schedule of Income Tax Act. By impugned order dated 12-11- 1987 (Annexure P-7) which purports to be under Rule 11(1) ibid, the Tax Recovery Officer has rejected the objection raised by Petitioner in relation to attachment of House No. 13/4 situated at Dr. R.S. Bhandari Marg, Indore. 5. Learned Counsel for the Petitioner placing reliance on the decision of Supreme Court reported in TRO v. Gangadhar Vishwanath Ranade (Decd) AIR 1999 SC 427 (SC) mainly raised two contentions. In the first place, he contended that impugned order was passed by Tax Recovery Officer (R-l) without affording any opportunity to Petitioner. According to learned Counsel, it was all the more necessary in this case because Petitioner eventually suffered adverse order. In the second place, he contended that even otherwise, the impugned order is unsustainable in law because it is per se without jurisdiction. According to learned Counsel, it was all the more necessary in this case because Petitioner eventually suffered adverse order. In the second place, he contended that even otherwise, the impugned order is unsustainable in law because it is per se without jurisdiction. According to learned Counsel, Tax Recovery Officer had no jurisdiction to decide the dispute relating to title of any immovable property while examining the case under Rule 11 ibid as has been laid down by Supreme Court in the case of Gangadhar Vishwanath (supra) and since, in this case finding was recorded by Tax Recovery Officer that Petitioner is not the owner of the house in question, the impugned order is liable to be vitiated on this ground alone. Lastly, he submitted that in any case in the, absence of any attachment order having been passed, the order impugned is bad in law. 6. In reply, learned Counsel for the revenue supported the order impugned herein. 7. In our opinion as observed supra, the need to remand the case to Tax Recovery Officer has occasioned due to two reasons. Firstly, it is clear from the record that Petitioner was not afforded any opportunity of being heard while deciding their objection referred supra by Tax Recovery Officer. Indeed, Respondent (Revenue) did not file return nor produced original record of the case to show as to how and on what material the impugned order was passed. 8. Mere perusal of Rule 11(3) and (4) would go to show that it is obligatory upon the Tax Recovery Officer while investigating the claim of any objector, who has raised an objection in relation to attachment of any immovable property or when he has made any claim to afford him an adequate opportunity to prove their case set up in the form of objection/claim. It is in fact an inbuilt provision and hence, it must appear from the proceedings that before recording a finding of satisfaction, the Tax Recovery Officer afforded sufficient opportunity to the objector. 9. We are satisfied on perusal of impugned order and the accompanying Annexures filed by the Petitioner that no such opportunity was granted to Petitioner before passing the impugned order. The only notice dated 13-10-1998 (Annexure P-9), which was sent along with too was not enough because it too was sent along with one summons in relation to another case. 9. We are satisfied on perusal of impugned order and the accompanying Annexures filed by the Petitioner that no such opportunity was granted to Petitioner before passing the impugned order. The only notice dated 13-10-1998 (Annexure P-9), which was sent along with too was not enough because it too was sent along with one summons in relation to another case. It was, therefore, not a sufficient compliance in the facts of the case. It rather created more confussion in the mind of Petitioner as to whether the notice to appear relates to this case or it relates to some other case. Since the Respondent failed to produce the record of the case to show as to how and on what date the case was fixed and how it was dealt with, we find force in the submissions of learned Counsel for the Petitioner that they were not afforded any opportunity of being heard before they suffered adverse order. 10. In the light of foregoing discussion, the impugned order is liable to be set aside on the aforementioned ground only. 11. There is yet another reason, which has necessitated the remand to Tax Recovery Officer for his fresh decision on the objection of the Petitioner. 12. The law on the issue was not clear till 1999. It came for interpretation before Supreme Court after the impugned order was passed. In other words, the object and scope of Rule 11 was interpreted by Supreme Court in the case of Gangadhar Vishwanath (supra) for the first time in 1999. So Tax Recovery Officer had no occasion to decide the issue keeping in view the law laid down in Tax Recovery Officer. We are therefore, of the view that now after remand of the case, the Tax Recovery Officer will be able to decide the factual issues keeping in view the scope and extent of his jurisdiction as explained by Supreme Court in the case of Gangadhar Vishwanath (supra). 13. In the light of foregoing discussion, it is not necessary for us to examine the other submissions of learned Counsel for the Petitioner. It will be now for the Tax Recovery Officer to decide all issues, which arise for consideration. Since, in the meantime, the Tax Recovery Officer has also issued attachment order and hence the objector has become entitled to raise any objection as contemplated by Rule 11. It will be now for the Tax Recovery Officer to decide all issues, which arise for consideration. Since, in the meantime, the Tax Recovery Officer has also issued attachment order and hence the objector has become entitled to raise any objection as contemplated by Rule 11. In these circumstances, the objection raised by Petitioner can now be taken to be an objection under Rule 11(1) ibid. This takes care of one of the submissions of learned Counsel for the Petitioner. 14. In view of foregoing discussion, the petition succeeds and is allowed in part. The impugned order dated 12-1-1999 (Annexure P-14) passed by Respondent No. 1 is quashed by issuance of writ of certiorari. The case is remanded to Respondent No. 1-Tax Recovery Officer (I), Indore for deciding the objections of Petitioner (Annexure P-7) afresh on its merits keeping in view the law laid down by Supreme Court in the case of Gangadhar Vishwanath (supra) and after affording an opportunity to the Petitioner. The Petitioner would be at liberty to file any additional objection so also adduce evidence if they so desire in support of their case. 15. The Tax Recovery Officer shall decide the objections within 6 months from, the date of Petitioners appearance before him. Needless to observe, the Tax Recovery Officer would decide the objections uninfluenced by any observation made by us on merits, which in fact, we have refrained from making. Petitioner to appear before Tax Recovery Officer (I), Indore on 7-12-2009 and produce the certified copy of this order to enable Tax Recovery Offficer (I), Indore to decide the objections as mentioned above. No cost.