APPALA NARASIMHAM K Vs. UNION OF INDIA

JUDGEMENT

(1.) : On the application filed by the Union of India represented by the ITO, Vizianagaram, purporting to be under Or. 21, rr. 58 and 62, r/w Or. 1, r. 10, and s. 151, CPC, the Subordinate Judge, Srikakulam, has directed the decreeholder in the suit (the appellant herein) to bring the property of the judgment-debtors to sale subject to the claim of the Union Government for the arrears of income-tax to be determined in O.S. No. 34/56 on the file of the Subordinate Judge, Visakhapatnam. The contention of the IT Department was that the judgment-debtors were liable to pay income-tax for the asst. yrs. 1945- 46, 1946-47, 1947-48, 1948-49, 1949-50 and 1950-51, to an amount of rupees two lakhs and odd. The decreeholder, Sri K. Appalanarasimham, obtained a decree in O.S. No. 140/53 against the judgment-debtors (the assessees) and was bringing their properties to sale. The judgment-debtors were liable to pay the income-tax and as such the tax being in the nature of public revenue was Crown debt and, therefore, a first charge on the schedule-mentioned properties of the judgment-debtors. The Union of India represented by the ITO, therefore, may be impleaded as a party and the properties be sold subject to the charge.

(2.) THIS petition was contested by the decreeholder. It was urged that the petitioners (Union of India) were not entitled to be impleaded as a party to the proceedings nor the tax which was liable to be paid by the judgment-debtors was of the nature of a Crown debt nor it created any charge on the properties. The provisions of O. 21, rr. 58 and 62, were not available and as such the petition was liable to be dismissed.

(3.) IT is only in the case of a mortgage or charge that the provisions of this rule are attracted. The arrears of income-tax do not come within the ambit of o. 21, r. 62, CPC. The lower Court was, therefore, not justified in ordering the sale of the properties as if arrears of tax was a charge on the properties of the assessees. Further, it has come on record that the income-tax Department has filed a suit, O.S. No. 34/56, on the file of the Sub-Court, Visakhapatnam, for the recovery of arrears. They could very well attach the properties of the assessees to ensure realisation of their amount. In that event, they will be entitled to claim priority over the prior debts in the event of the sale of properties.