Writ petition dismissed for lack of maintainability, petitioner directed to pursue alternative remedy under Income Tax Act

The court concluded that the writ application was not maintainable as the petitioner had an alternative remedy available under Rule 11 of the Second Schedule to the Income Tax Act. The court directed the petitioner to file a claim with the Tax Recovery Officer within four weeks for investigation. The court emphasized addressing the attachment order grievance through prescribed procedural mechanisms rather than a writ petition, rejecting the writ applications and vacating the ad-interim relief granted earlier.

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Issues Involved:
1. Legality of the attachment order under Section 222 of the Income Tax Act.
2. Validity of the property transfer to the petitioner.
3. Jurisdiction and procedural propriety of the Tax Recovery Officer's actions.
4. Availability and appropriateness of alternative remedies under Rule 11 of the Second Schedule to the Income Tax Act.

Detailed Analysis:

1. Legality of the Attachment Order under Section 222 of the Income Tax Act:
The petitioner challenged the attachment order dated 22.11.2017 issued by the Tax Recovery Officer under Section 222 of the Income Tax Act, which attached the petitioner's property for dues owed by M/s Newempire Infrastructure Pvt. Ltd. The petitioner argued that the property in question did not belong to the defaulter but to the petitioner, making the attachment order illegal and without jurisdiction. The petitioner cited Rule 48 of the Second Schedule, which allows for the attachment of the defaulter's immovable property only, asserting that the property was no longer owned by the defaulter at the time of the attachment.

2. Validity of the Property Transfer to the Petitioner:
The petitioner contended that the property was legally transferred to them through a supplementary agreement dated 22.03.2016, followed by a sale deed on 01.03.2017. The petitioner argued that all necessary permissions and payments were completed, and they were recognized as the rightful owner by the Gujarat Industrial Development Corporation (GIDC). The petitioner also presented evidence such as electricity and telephone bills issued in their name to support their claim of ownership and possession.

3. Jurisdiction and Procedural Propriety of the Tax Recovery Officer's Actions:
The petitioner asserted that the Tax Recovery Officer acted beyond their jurisdiction by attaching property not owned by the defaulter. The petitioner emphasized that the Tax Recovery Officer should have examined the actual possession and ownership of the property before issuing the attachment order. The petitioner argued that any transfer made by the defaulter to a third party with the intention to defraud the revenue should be declared void through a suit under Rule 11(6) of the Second Schedule, rather than through an attachment order.

4. Availability and Appropriateness of Alternative Remedies under Rule 11 of the Second Schedule to the Income Tax Act:
The respondent argued that the petitioner should have filed a claim under Rule 11 of the Second Schedule to the Income Tax Act, which provides a procedure for investigating claims or objections to the attachment or sale of property. The respondent maintained that the petitioner had an alternative remedy available and should not have approached the court directly. The court agreed with this argument, emphasizing that the petitioner should have utilized the remedy provided under Rule 11 before seeking judicial intervention.

Conclusion:
The court concluded that the writ application was not maintainable as the petitioner had an alternative remedy available under Rule 11 of the Second Schedule to the Income Tax Act. The court directed the petitioner to file a claim with the Tax Recovery Officer within four weeks, who would then investigate the claim in accordance with the law. The court emphasized that the petitioner's grievance regarding the attachment order should be addressed through the prescribed procedural mechanism rather than through a writ petition. Consequently, the court rejected the writ applications and vacated the ad-interim relief earlier granted.

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