Income-tax priority over private debts applies, but attachment is limited to each debtor's actual interest in the fund.

Income-tax arrears have priority over private debts, and an executing court cannot re-open a tax recovery certificate to reassess liability. The private creditor therefore could not take precedence over the tax claim. However, where attachment was directed against individual partners and not the firm, recovery was limited to each person's subsisting interest in the decretal fund. A partner with no remaining interest, or whose interest had already been sold, could not be proceeded against for the attached amount. The balance of the fund remained available for distribution among other creditors under the Code of Civil Procedure.

---

---

Issues: (i) Whether the Income-tax Department was entitled to priority over a private creditor in respect of the attached decretal amount; (ii) whether the attached amount could be realised in full from the fund or only to the extent of the individual partners' respective interests.

Issue (i): Whether the Income-tax Department was entitled to priority over a private creditor in respect of the attached decretal amount.

Analysis: The recovery certificate issued by the tax authorities was treated as sufficient proof that the amount was due, and the executing court was held not competent to go behind that certificate to re-examine tax liability. The Court applied the settled principle that arrears of income-tax have priority over private debts, and therefore the private creditor could not claim precedence merely because prohibitory orders had been issued in its favour.

Conclusion: The Income-tax Department was held entitled to priority over the private creditor.

Issue (ii): Whether the attached amount could be realised in full from the fund or only to the extent of the individual partners' respective interests.

Analysis: The attachment was directed against individuals and not against the firm as such. The Court held that recovery could be made only from the specific interest of each person in the attached amount. Since one partner had no subsisting interest and another's interest had already been sold, only the remaining partners' shares could be reached, with the Department entitled to recover only up to the amount attributable to the tax dues against those individuals. The balance had to be distributed among other creditors under section 73 of the Code of Civil Procedure, 1908.

Conclusion: The attachment was confined to the individual partners' interests and could not extend to the entire fund.

Final Conclusion: The revisions succeeded only to the limited extent that the tax claim was upheld against the identified shares in the attached decretal amount, while the surplus was left available for distribution among other creditors.

Ratio Decidendi: In execution proceedings, income-tax arrears enjoy priority over private debts, and recovery from attached property is restricted to the debtor's actual interest where the proceeding is against individuals and not against the firm or its general assets.

---