N MANGATHAYARAMMA Vs. C H KRISHNA MURTHY

JUDGEMENT

(1.) The main question that arises for decision in these writ petitions is whether house property bearing Municipal Door No. 28/49 situated at Subhash Road, Old Town, Anantapur, hereinafter referred to as the 'petition schedule property', is liable to be sold for recovery of wealth tax arrears for the 2002(3) ALD May 1st assessment years 1982-83 to 1988-89 due from late Nimmalla Appanna. It is stated that N. Appanna and his father late N. Peddanna were Wealth Tax assessees and were residents of Anantapur town.

(2.) It appears that there were wealth tax arrears to the tune of Rs.5.5 lakhs owed by N. Appanna in respect of the assessment years 1982-83 to 1988-89. According to the Wealth tax authorities, the above house properties with appurtenant lands belonged to the joint family and were assessed in the hands of N. Appanna, Hindu United Family (HUF). In connection with the recovery of the said arrears of the wealth tax, the Tax Recovery Officer, Income Tax Department, issued a proclamation in Telugu daily news paper 'Eenaadu' and brought to sell the petition schedule property and ultimately auction was conducted on 12.1.1996 and sale was knocked down in favour of the petitioner in W.P.No. 9227 of 1996 he being the highest bidder, for consideration of Rs. 6,58,000/-. As per the auction conditions, the purchaser deposited a sum of Rs. 1,65,000/- being the 1/4th of the total value of the bid and the balance of the bid amount of Rs.5 lakhs was also subsequently paid by the purchaser to the Tax Recovery Officer vide Bank draft No. 301196, dated 24.1.1996 drawn on Andhra Bank, Tirupati and the Tax Recovery Officer issued receipt dated 25.1.1996 in favour of the purchaser for having received the entire sale consideration. However, sale deed was not executed in favour of the purchaser. In the said background, the purchaser viz., Sri Y.Madhusudhana Reddy filed W.P.No.9227 of 1996 praying for a writ in the nature of mandamus directing the Tax Recovery Officer to issue sale certificate and also execute sale deed in his favour in respect of the petition schedule property. W.P.No.9227 of 1996 was filed in this Court on 23.4.1996.

(3.) Even before WP No. 9227 of 1996 was filed by the purchaser, WP No. 109 of 1996 was filed by N, Mangathayaramma, W/o Late Bhujangarayudu and her five children on 8.1.1996 praying for a direction to the Tax Recovery Officer and the concerned Inspectors of Income Tax not to auction the petition schedule property as well as other house properties bearing Municipal Door Nos.28/50, 28/51 and 28/52 situated at Subhash Road, Old Town, Anantapur and to declare the impugned action of auctioning the above properties as illegal. In the said writ petition, the petitioners claimed that the properties mentioned in the auction notification dated 7.1.1996 and published in Eenaadu daily are the properties of petitioners 2 to 6 and they are not the properties of late N. Appanna and therefore those properties are not liable to be attached and sold for recovery of wealth tax arrears due from N. Appanna. According to N. Mangathayaramma and her children, the above properties were acquired by them through a registered Will Deed dated 5.7.1969 executed by late Peddanna, who is the father of N. Appanna. They claimed that the house properties were the self acquired properties of Late Peddanna and therefore N. Appanna did not have any title or right or interest in those properties and the title of those properties was passed on to the children of N. Mangathayaramma and her late husband Bhujangarayudu. They also claimed that subsequent to the execution of the registered Will, late Peddanna executed a registered Codicil in the year 1974 apportioning all his properties among Bhujangarayudu and his children.