Limited jurisdiction of Special Court prevents reopening tax assessments of notified persons; only priority distribution is permissible.

The Special Court under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 has only limited jurisdiction over attached property and the prioritisation of competing claims. Although tax liabilities of notified persons rank in the first order of priority under section 11, the Court cannot reassess, review, or override a tax assessment made by the competent authority, tribunal, or court under the taxing statute. Its role is confined to determining how far the tax claim can be met from available funds and protecting any unpaid balance as required by law. The decision in S.V. Kondaskar was held inapplicable because it concerned distribution of an already determined tax debt, not examination of the assessment itself.

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Issues: Whether the Special Court under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 could sit in appeal over the assessment of tax liability of notified persons, scrutinise whether the tax demands were bona fide, reasonable, justified or enforceable, and direct production of records for that purpose.

Analysis: The Act gave the Special Court limited jurisdiction over the disposal of attached property and the ordering of priorities among competing claims. Tax liabilities of notified persons stood in the first order of priority under section 11, but the Special Court was not authorised to reassess, review, or overrule the determination made by the competent tax authority, tribunal, or court under the taxing statute. Its function was confined to deciding how far the claim could be met from the available funds and, if full payment was not possible, to safeguarding the unpaid balance to the extent required by law. The reliance on the liquidation-court observations in S.V. Kondaskar was found inapposite because that authority addressed only the distribution of an already determined tax debt and not any power to question the assessment itself.

Conclusion: The Special Court had no jurisdiction to examine the bona fides, reasonableness, justification, or enforceability of the tax assessments of notified persons.

Ratio Decidendi: Where a statute confers only priority-distribution powers on a special court, that court cannot usurp the jurisdiction of the assessing authority by reopening or testing the validity of a tax assessment on merits.

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