Subsisting tax attachment voids private transfer and later limitation expiry cannot cure the purchaser's title.

A private transfer of immovable property made while a tax recovery attachment was subsisting was void against the Revenue's enforceable claims, and the purchaser could not rely on Section 281 because the transfer was governed by the attachment regime under the Second Schedule. The later expiry of the limitation period under Rule 68B did not retrospectively validate an already void purchase or defeat recovery rights. The appointment of a receiver further showed that recovery machinery remained operative, so the Revenue could proceed against the property through the statutory framework.

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Issues: (i) Whether the transfer of the attached immovable property in favour of the petitioner was void and liable to be ignored for recovery of the tax arrears. (ii) Whether the expiry of the limitation period under Rule 68B of the Second Schedule to the Income-tax Act, 1961, and the alleged release of attachment could validate the petitioner's title or prevent the Revenue from proceeding against the property and the petitioner.

Issue (i): Whether the transfer of the attached immovable property in favour of the petitioner was void and liable to be ignored for recovery of the tax arrears.

Analysis: The property had already been attached for recovery of income-tax dues when the petitioner purchased it. Under Rule 16 of the Second Schedule, once attachment is made, any private transfer of the attached property contrary to such attachment is void as against claims enforceable under the attachment. The Court held that the relevant date is the date of the transfer, and on that date the attachment was subsisting and enforceable. The petitioner could not rely on Section 281, because that provision deals with transfers during pendency of proceedings before service of notice under Rule 2, whereas the present transfer was hit by the subsisting attachment regime under the Second Schedule. The appointment of a receiver also reinforced that the recovery machinery had not ceased to operate.

Conclusion: The transfer in favour of the petitioner was void against the Revenue's enforceable claims and did not protect the petitioner.

Issue (ii): Whether the expiry of the limitation period under Rule 68B of the Second Schedule to the Income-tax Act, 1961, and the alleged release of attachment could validate the petitioner's title or prevent the Revenue from proceeding against the property and the petitioner.

Analysis: Rule 68B restricts the time within which a sale of immovable property may be made, but the Court held that the petitioner could not derive benefit from the later expiry of limitation to revive an already void transfer. Once the sale in favour of the petitioner was void on the date of execution, the subsequent lapse of time or vacation of attachment could not retrospectively validate it. The Court also noted that the Receiver mechanism under Rules 70 and 71 had been invoked, so the Revenue was entitled to proceed through that statutory route. The demand raised against the petitioner was therefore justified.

Conclusion: The expiry of limitation under Rule 68B did not validate the petitioner's purchase or defeat the Revenue's recovery rights.

Final Conclusion: The writ petitions failed because the petitioner acquired no protected title in property already under effective tax recovery attachment, and the Revenue was entitled to enforce its dues through the statutory recovery framework.

Ratio Decidendi: A private transfer made while a tax recovery attachment is subsisting is void as against claims enforceable under that attachment, and the subsequent expiry of the sale limitation period does not cure or revive such transfer.

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