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Issues: Whether the Tax Recovery Officer could declare a post-attachment transfer of immovable property as null and void in recovery proceedings, and whether the proper remedy was for the Revenue to institute a civil suit.
Analysis: The property had been attached before the impugned sale, but the transferor challenge was sought to be resolved by the Tax Recovery Officer himself. The governing recovery scheme under the Income-tax Act permits attachment and recovery, but the power to treat a transfer as void for defeating revenue lies outside the Tax Recovery Officer's adjudicatory authority in such proceedings. The controlling principle applied was that, where the Revenue alleges a transfer was made to defraud recovery, the Revenue must seek a declaration in civil proceedings and not obtain such declaration from the Tax Recovery Officer under the Second Schedule. On that basis, the direction enabling the writ petitioner to move the Tax Recovery Officer under Rule 11 was found unsustainable.
Conclusion: The Tax Recovery Officer had no jurisdiction to declare the sale deed void, and the Revenue was required to file a civil suit for such relief. The liberty granted to the writ petitioner to seek adjudication under Rule 11 was set aside.
Ratio Decidendi: In recovery proceedings under the Income-tax Act, the Tax Recovery Officer cannot adjudicate a transfer as void; if the Revenue seeks to avoid the transfer on the ground of fraud or defeat of recovery, it must pursue a declaratory civil suit.
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