Tax attachment over property upheld where transfer during assessment proceedings was void against departmental dues

A transfer of property made after initiation of assessment proceedings and during the pendency of proceedings under the Income-tax Act was treated as void against the Department's tax claim under Section 281. The earlier Supreme Court ruling on the unamended provision was held inapplicable because the statutory language had changed. The plea that the purchaser was bona fide was not suitable for conclusive determination in writ proceedings, as that question required fuller factual adjudication and could, if at all, be established in a civil suit. The challenge to the attachment therefore failed and writ relief was refused.

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Issues: Whether the attachment over the property could be quashed on the ground that the appellant had purchased it before the final attachment and whether the plea of bona fide purchase could be accepted in writ proceedings.

Analysis: The property was purchased after initiation of assessment proceedings and the transfer was made during the pendency of proceedings under the Income-tax Act, 1961. On the statutory scheme of Section 281, a transfer made in such circumstances is void against the Department's claim for tax dues. The earlier Supreme Court ruling dealing with the unamended form of the provision was held inapplicable because the relevant statutory language had changed. The Court also held that whether the appellant was a bona fide purchaser involved questions that could not be conclusively decided in summary writ jurisdiction and could be established, if at all, in a civil suit.

Conclusion: The challenge to the attachment failed and the appellant was not entitled to writ relief.

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