Tax arrears attachment upheld where common partners and unpaid partnership liability justified recovery against another firm's property.

Subsisting tax arrears of a partnership concern with common partners can justify attachment of another firm's property where the liability remains unpaid, even if related arrears also arise in sister concerns; the Court distinguished private limited companies as separate legal entities but upheld attachment because the partnership liability itself was outstanding and a waiver request had not been granted. The challenge based on Revenue Recovery Act procedure also failed, as the record showed recovery steps had been taken and the attachment had been published in the District Gazette, so non-compliance was not established. The writ petition was therefore dismissed and the impugned attachment sustained.

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Issues: (i) Whether the property of a partnership firm could be attached for recovery of tax arrears due from sister concerns, including private limited companies and another firm with common partners; and (ii) whether the attachment was invalid for non-compliance with the procedure under the Revenue Recovery Act.

Issue (i): Whether the property of a partnership firm could be attached for recovery of tax arrears due from sister concerns, including private limited companies and another firm with common partners.

Analysis: The arrears position showed outstanding tax liability not only in respect of the two private limited companies but also in respect of one partnership firm having the same common partners. The earlier attachment proceedings concerning another concern had already recognised that recovery could be made from the properties connected with the common partners in respect of a partnership firm. The Court distinguished the position of private limited companies as separate legal entities, but held that the existence of arrears in respect of the partnership concern itself justified attachment of another firm's property where the same partners were involved and the liability remained unpaid, including the pending waiver request which had not yet been granted.

Conclusion: The attachment of the petitioner firm's property was held to be valid, and this issue was decided against the petitioner.

Issue (ii): Whether the attachment was invalid for non-compliance with the procedure under the Revenue Recovery Act.

Analysis: The petitioner contended that a prior written demand and notice were required before attachment under section 25 of the Revenue Recovery Act. The record, however, showed that the recovery steps had been taken and the attachment had also been published in the District Gazette. On the materials before it, the Court was not persuaded that the statutory recovery procedure had been violated so as to invalidate the encumbrance.

Conclusion: The challenge on the ground of procedural non-compliance was rejected, and this issue was decided against the petitioner.

Final Conclusion: The writ petition failed as the impugned attachment was sustained, and the connected miscellaneous petitions were closed.

Ratio Decidendi: Where a recovery proceeding shows subsisting tax arrears of a partnership concern with common partners, attachment of property associated with another firm of the same partners is not invalid merely because part of the liability also relates to sister concerns, and the attachment will not be set aside absent demonstrated non-compliance with the prescribed recovery procedure.

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