TaxTMI 
TaxTMI 
2017 (1) TMI 880
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....the Income Tax Department - Tax Recovery Officer-III, Vadodara, by which with respect to the property in question the original owner - Chandravadan Maneklal Shah, Director of M/s. Gayatri Refoils Pvt. Ltd. has been prohibited and restrained from transferring or charging the property in question for the alleged dues of Rs. 1,03,32,973/- with interest under section 220(2) of the Income Tax Act. The petitioner has also further prayed to quash and set aside the communication / letter dated 18/10/2012 (Annexure- I) by which the Sub-Registrar, Borsad has refused to register the Certificate for sale with respect to the property in question on the ground that the property in question is under attachment of the Income Tax Department. 2.00. Fac....
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....1,03,32,973/- plus interest under section 220(2) of the Income Tax Act with respect to the income tax dues for the Assessment Year 1998-99. 2.05. That thereafter, by communication dated 18/10/2012 Sub-Registrar, Borsad communicated to the petitioner that as the property in question is under attachment of the Income Tax Officer, Vadodara, Certificate of sale is not registered and the petitioner is informed to get No Objection Certificate from the Income Tax Office, Vadodara so that further process for registration of sale can be taken. 2.06. Feeling aggrieved and dissatisfied with the impugned communications, the petitioner - purchaser of the property in question, who has purchased the property in question from public auction held and ....
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....n claim priority over the secured creditor. It is submitted that therefore, the attachment order issued by the Income Tax Department with respect to the property in question which is already purchased by the petitioner from the public auction held by the Bank (secured creditor) cannot be sustained and the same deserves to be quashed and set aside. 2.11. Mr.K.K. Desai, learned advocate appearing on behalf of the petitioner has further submitted that even otherwise, the impugned attachment cannot be sustained as prior to the attachment order, the property in question is already sold in a public auction held and conducted by the Bank (secured creditor) pursuant to the order passed by the Debt Recovery Tribunal. It is submitted that therefor....
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....nt. However, he has fairly conceded that looking to the provisions of the Income Tax Act, for dues of the Income Tax Department, Income Tax Department cannot have first charge and/or priority over the secured creditor. 4.00. Heard the learned advocates appearing on behalf of the respective parties at length. 4.01. At the outset, it is required to be noted that pursuant to the order passed by the Debt Recovery Tribunal for the recovery of the dues of Kotak Mahindra Bank, the property in question has been purchased by the petitioner herein from public auction held by the Bank on 8/9/2011. That the petitioner has paid full amount of sale consideration of Rs. 23,25,000/- by 22/9/2011. Even Certificate of Sale has been issued by the Debt R....
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....roperty in question was already been sold in a public auction held and conducted pursuant to the order passed by the Debt Recovery Tribunal. Under the circumstances and in view of the aforesaid facts and circumstances of the case when the petitioner is a bonafide purchaser of the property in question, which has been purchased by him in a public auction held and conducted pursuant to the order passed by the Debt Recovery Tribunal and when the order of attachment has been passed subsequently, appropriate authority is required to be directed to register the Certificate of Sale in favour of the petitioner. Therefore, there is no justification in not registering the Certificate of Sale issued by the Debt Recovery Tribunal and informing the petit....