Protective auction-sale directions preserve claimed property interest pending adjudication of ownership in a tax recovery matter

Pending determination of the petitioner's ownership claim over part of the attached land, protective directions were issued to preserve her asserted interest in the proposed auction proceeds. The order required 20% of the sale consideration to be deposited in a nationalised bank in the name of the Commissioner of Income-tax. If the petitioner later established title to the specified extent, the assessed value of that land would be released to her from the deposit with accrued interest. Any remaining balance would be applied towards tax dues, and any shortfall above the deposit was to be met by the Department with interest.

---

---

Issues: Whether, pending the petitioner's claim to ownership of a portion of the attached property, directions could be issued to safeguard her interest from the proposed auction sale and sale proceeds.

Analysis: The petitioner asserted that part of the land on which the superstructure stood belonged to her and sought protection pending filing and consideration of a claim petition before the taxing authority. The order provided for deposit of 20% of the sale consideration in a nationalised bank in the name of the Commissioner of Income-tax, with directions that, if the petitioner established title to the specified extent of land, the assessed value would be paid to her from the deposit along with the accrued interest. Any balance remaining after such payment was to be appropriated towards tax dues, and if the assessed value exceeded the deposit, the Department was to make good the shortfall with interest.

Conclusion: The petition was allowed to the extent of issuing protective directions safeguarding the petitioner's claimed interest, while leaving the ownership claim to be adjudicated in the claim petition.

---