Tax arrears recovered as land revenue do not automatically extinguish prior mortgages absent express statutory deeming.

A statutory power to recover income-tax arrears as if they were arrears of land revenue does not itself deem the tax arrears to be land revenue. A revenue sale conducted under that machinery therefore does not attract section 42 of the Madras Revenue Recovery Act, 1864 unless the statute expressly creates that legal fiction, and prior encumbrances such as a mortgage are not displaced on that basis. The text also notes that no further opportunity was warranted to prove a mortgage as subsequent to attachment, and that a purchaser cannot claim general priority merely because the debt recovered was a Crown debt.

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Issues: (i) Whether a revenue sale made in recovery of income-tax arrears under the revenue recovery machinery passed title free from prior encumbrances under section 42 of the Madras Revenue Recovery Act, 1864; (ii) whether the appellant was entitled to a further opportunity to produce documents to show that the mortgage was executed after attachment; and (iii) whether the appellant could claim priority as purchaser in recovery of a Crown debt.

Issue (i): Whether a revenue sale made in recovery of income-tax arrears under the revenue recovery machinery passed title free from prior encumbrances under section 42 of the Madras Revenue Recovery Act, 1864

Analysis: Section 42 applies only when the sale is for arrears of land revenue. Section 46(2) of the Indian Income-tax Act, 1922 authorises recovery of income-tax arrears through the Collector as if they were arrears of land revenue, but it only provides the machinery and procedure for recovery. It does not convert income-tax arrears into land revenue. The position is different where a statute itself deems the liability to be land revenue, as under section 3 of the Madras Land Encroachment Act, 1905. No such deeming provision existed in the Income-tax Act for the arrears in question.

Conclusion: The sale was not a sale for recovery of land revenue, and section 42 of the Madras Revenue Recovery Act, 1864 did not apply. The appellant did not take the property free of the mortgage.

Issue (ii): Whether the appellant was entitled to a further opportunity to produce documents to show that the mortgage was executed after attachment

Analysis: There was no plea in the written statement on this point, and no certified copy or other reliable material had been produced either at the trial stage or earlier. In any event, even if the mortgage were subsequent to attachment, it would only be void as against the specific claim enforceable under the attachment and not void for all purposes so as to defeat the mortgage against the purchaser in every respect.

Conclusion: No further opportunity was warranted.

Issue (iii): Whether the appellant could claim priority as purchaser in recovery of a Crown debt

Analysis: The contention that an income-tax debt, being a Crown debt, gave the purchaser priority over all other debts was rejected as unsupported by principle or authority.

Conclusion: The appellant was not entitled to priority on that ground.

Final Conclusion: The purchaser under the revenue sale could not defeat the prior mortgage, and the appeal failed in entirety.

Ratio Decidendi: A statutory provision that merely authorises recovery of a tax arrear as if it were land revenue does not deem the tax itself to be land revenue, and a sale under such machinery does not attract the rule that lands sold for arrears of revenue pass free of prior encumbrances unless the statute expressly so provides.

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