Tax attachment priority turns on disputed facts, so mortgage claims must be pursued before the Tax Recovery Officer first.

Priority between a bank's claimed mortgage and the Income Tax Department's attachment cannot be conclusively determined in writ jurisdiction where the dispute depends on contested facts, including the dates of the mortgage, attachment and pendency of tax proceedings. Section 281 of the Income-tax Act may render transfers or encumbrances created during pending proceedings void against tax claims, while Rule 11 of Schedule II requires the Tax Recovery Officer to investigate claims and objections to attachment. In such circumstances, the aggrieved party must first place the original documents before the Tax Recovery Officer under the statutory objection procedure rather than seek direct writ relief.

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Issues: Whether the petitioner-bank could, in writ jurisdiction, insist on priority over the Income Tax Department's attachment and seek quashing of the Tax Recovery Officer's order without first invoking the remedy under Rule 11 of Schedule II of the Income-tax Act, and whether the alleged mortgage created in favour of the bank could prevail if the income-tax proceedings were already pending.

Analysis: The dispute turned on the interaction between Section 281 of the Income-tax Act, which renders transfers or encumbrances created during the pendency of proceedings void against tax claims, and the mechanism under Rule 11 of Schedule II, which requires the Tax Recovery Officer to investigate claims and objections to attachment. The Court noted that the rival contentions involved disputed questions of fact, particularly the dates of the attachment, the mortgage, and the pendency of tax proceedings. It further observed that the bank's claim of priority could not be conclusively accepted in writ proceedings on the available materials and that the proper course was to move the Tax Recovery Officer with original documents for adjudication.

Conclusion: The petitioner-bank was not granted the writ relief sought. The bank was left to pursue the statutory remedy under Rule 11 of Schedule II of the Income-tax Act before the Tax Recovery Officer.

Final Conclusion: The challenge to the impugned order did not succeed in writ jurisdiction, and the matter was directed to be worked out before the Tax Recovery Officer under the statutory procedure.

Ratio Decidendi: Where the validity of a mortgage or transfer vis-a -vis tax attachment depends on disputed facts concerning the pendency of proceedings and the chronology of competing transactions, the High Court should not determine priority in writ proceedings and the aggrieved party must seek investigation under the statutory objection procedure.

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