R T THOMAS Vs. TAX RECOVERY OFFICER

JUDGEMENT

(1.) THE facts as evident from the èoriginal petition and the impugned orders, exhibits P-4 and P-6, are as follows. THE petitioner who is an assessee to income-tax and wealth-tax was the owner of an immovable property called Bank House Property. THE petitioner was in arrears of income-tax, wealth-tax and interest amounting to about Rs. 9 lakhs.

(2.) THE property had been the subject of a mortgage in the year 1973 to the Chartered Bank. THE Bank filed a suit O.S. No. 87 of 1981 in the court of the Subordinate Judge of Kozhikode for recovery of the amount due under the mortgage. THE suit was decreed on July 31, 1982. This decree was assigned by the bank to one Mrs. Jolly Thomas for a sum of Rs. 4,41,000.

(3.) THE petitioner filed two applications on February 20, 1989, and March 10, 1989, claiming payment to him of the amount remaining in balance after adjusting the arrears of tax due from him. He did not, however, challenge the auction sale. After hearing the representative of the petitioner, the Tax Recovery Officer rejected the petitioners claim for payment of the balance remaining after adjusting the arrears of tax. THE Tax Recovery Officer rejected his plea by his proceedings, exhibit P-4, wherein he adverted to the claim made by Mrs. Jolly Thomas and concluded that since the decree in O.S. No. 87 of 1981 had been passed on July 31, 1982, before the service of notice of the Tax Recovery Officer, she was entitled to payment with priority over the arrears of tax and, therefore, only the balance remaining, after payment of the decree debt, will be available at the Departments disposal to be dealt with under rule 8 of the Second Schedule to the Income-tax Act, 1961. THE Tax Recovery Officer also stated that since the exact amount due to Mrs. Jolly Thomas had not been worked out and the matter was still pending in the Sub-court, Kozhikode, he will await orders of the Sub-court in E.A. No. 262 of 1989 for depositing the balance amount due to Mrs. Jolly Thomas in court. In this view of the matter, he directed that the amount realised in the auction sale will be disbursed in accordance with rule 8 aforesaid after settling the amount payable to Mrs. Jolly Thomas under the decree. It was, therefore, stated that the request of the petitioner to pay the balance amount immediately cannot be entertained and acted upon at present.