Attachment objections must be decided on merits; security can be required for postponing sale, but not used to bar inquiry.

Under Rule 11(2) of the Second Schedule to the Income-tax Act, the Tax Recovery Officer could require cash security or a bank guarantee as a condition for postponing sale of attached property, and that term was upheld. However, the officer could not reject an objection to attachment merely because the objector did not comply with that condition; the claim had to be investigated on the evidence and decided on merits. The portions of the orders debarring the objector from being heard and rejecting the objection for non-compliance were therefore without jurisdiction and quashed, with the objection to be decided afresh.

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Issues: (i) Whether the Tax Recovery Officer could, while considering postponement of sale of attached property, impose a condition requiring the objector to furnish cash security or bank guarantee; (ii) whether the objection to attachment could be rejected solely because the objector did not comply with that condition, without investigating the claim on merits.

Issue (i): Whether the Tax Recovery Officer could, while considering postponement of sale of attached property, impose a condition requiring the objector to furnish cash security or bank guarantee.

Analysis: Rule 11(2) of the Second Schedule to the Income-tax Act confers discretion on the Tax Recovery Officer to postpone a sale on such terms as to security or otherwise as he deems fit. The requirement of furnishing security was therefore within jurisdiction and was not shown to be unreasonable or unlawful.

Conclusion: The condition requiring security or bank guarantee was upheld.

Issue (ii): Whether the objection to attachment could be rejected solely because the objector did not comply with that condition, without investigating the claim on merits.

Analysis: Rule 11(2) does not authorise rejection of a claim to attached property merely because the terms imposed for postponement of sale were not complied with. The Tax Recovery Officer was bound to investigate the objection and decide it on the evidence adduced. The portions of the orders debarring the objector from being heard and rejecting the objection for non-compliance were therefore without jurisdiction.

Conclusion: The rejection of the objection without inquiry on merits was illegal and was quashed.

Final Conclusion: The challenge succeeded only to the extent that the objection had to be decided afresh in accordance with law, while the security condition itself was sustained.

Ratio Decidendi: Under Rule 11(2) of the Second Schedule to the Income-tax Act, the Tax Recovery Officer may impose terms for postponement of sale, but he cannot reject an objection to attached property without adjudicating the claim on merits.

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