Rule 16 of the Second Schedule does not by itself authorise a Tax Recovery Officer to impose a blanket transfer prohibition.

Rule 16 of the Second Schedule to the Income-tax Act, 1961 restricts a defaulter's power to mortgage, charge, lease or otherwise deal with property after service of notice, but it does not itself confer power on the Tax Recovery Officer to issue a blanket prohibition on transfer. The provision is directed at protecting revenue against prejudicial alienation, and any transfer in breach operates only to the extent needed for that protection. Because no express authority exists for a prohibitory order, such power cannot be implied as incidental. The impugned restraint was therefore inoperative, and declaratory relief against it followed.

---

---

Issues: Whether the Tax Recovery Officer had competence under Rule 16 of the Second Schedule to the Income-tax Act, 1961 to issue a direction prohibiting transfer of the vehicles.

Analysis: Rule 16 restricts the defaulter's competence to mortgage, charge, lease, or otherwise deal with property after service of notice, but it does not itself confer a power on the Tax Recovery Officer to issue a blanket prohibition against transfer. The provision is aimed at protecting the revenue by preventing prejudicial alienations, and any transfer made in breach of the restriction would operate only to the extent necessary to safeguard the revenue. Since the rule does not expressly authorise a prohibitory order, such power cannot be treated as incidental to it.

Conclusion: The Tax Recovery Officer had no authority to issue the impugned prohibition, and the direction was inoperative.

Final Conclusion: The petitioner obtained declaratory relief against the impugned restraint, while the pending transfer application was left to be decided in accordance with law.

Ratio Decidendi: A restriction on a defaulter's power to deal with property under the Second Schedule does not, by itself, imply authority in the Tax Recovery Officer to issue a prohibitory order unless such power is expressly conferred.

---