P.T. Mathew vs Tax Recovery Officer and Another

G. Sivarajan, J.—The petitioner, being aggrieved by exhibit P-1, notice issued by the first respondent, the Tax Recovery Officer under Rule 85 of the Second Schedule to the Income Tax Act, 1961, and further proceedings initiated pursuant to exhibit P-1, has filed this original petition seeking for a direction to quash exhibit P-1 notice and exhibit P-6 order of attachment and for a declaration that the petitioner is not a legal representative of the deceased assessee, Z.M. Paret, and that no tax recovery proceedings could be taken against the petitioner and his properties in respect of the tax due from the late Z.M. Paret. There is also an alternate prayer for a direction to the first respondent to consider and investigate the claim petition, exhibit P-10, and also the objections, exhibits P-2 and P-5, and dispose of the same according to law.

The case of the petitioner in this original petition is that the petitioner is not the legal representative of deceased, Z.M. Paret, for recovery of amounts due from whom exhibit P-l notice is issued. It is stated by the petitioner that he is neither the legal representative nor a person on whom the estate of the deceased, Z.M. Paret, devolved on his death. It is stated that Z.M. Paret, who was an assessee to Income Tax and wealth-tax died on June 16, 1981, that he had executed a will in respect of all his assets, that one K.V. Pothen was the executor under the will, that there was probate proceedings in respect of the will left by the deceased, Z.M. Paret, evidenced by O.P. No. 188 of 1983 of the District Court, Kottayam, that one P.J. Kaumose was the sole legatee under the will and that all the assets left by the deceased, Z.M. Paret, are mentioned in the probate application. It is further stated that none of the assets mentioned in the said probate application devolved on the petitioner and as such the petitioner cannot be treated as a legal representative within the meaning of the definition of legal representative in Section 2(29) of the Income Tax Act, 1961, read with Clause (11) of Section 2 of the Code of Civil Procedure. The petitioner filed exhibit P-2 reply to exhibit P-l to the first respondent pointing out all the above facts. A true copy of the will (exhibit P-3), it is stated, has also been enclosed with exhibit P-2. Thereafter the petitioner received exhibit P-4 reply from the first respondent, wherein it is stated that the petitioner is in possession and enjoyment of immovable properties belonging to the deceased and, therefore, he is treated as a legal representative and issued exhibit P-l under Rule 85 of the Second Schedule to the Income Tax Act. The petitioner again sent a reply, exhibit P-5, giving all the details regarding the property mentioned in exhibit P-4 and submitted that these properties were obtained by the petitioner about 30 years before the death of Z.M. Paret and could not be deemed to pass on the death of the deceased. It is further stated that the petitioner is not in possession and enjoyment of any of the properties including the estate of the deceased, Z.M. Paret.

On receipt of exhibit P-6 attachment order the petitioner applied to the second respondent-income tax Officer , Ward-III, Kottayam, requiring him to furnish copies of the assessment orders and certificates issued by the second respondent to ascertain the petitioner''s liability in respect of the above arrears evidenced by exhibit P-7. The petitioner received exhibit P-8 reply from the second respondent stating that it is not verifiable from the office records as to which assessment year or years these arrears relate to or as to whether the arrears relate to Income Tax or wealth-tax and the petitioner has been asked to contact the first respondent for getting the details of arrears. The petitioner has produced a copy of the application for probate, O.P. No. 188 of 1983 filed by one Varkey Pothen before the District Court, Kottayam, evidenced by exhibit P-9 for grant of a probate with respect to the will executed by the late Z.M. Paret, which gives the details of all the assets left by the deceased, Z.M. Paret. The petitioner thereafter filed a claim petition under Rule 11 of the Second Schedule to the Act before the first respondent evidenced by exhibit P-10 against the order of attachment in respect of immovable properties mentioned as items Nos. 1 to 3 therein.

A counter-affidavit is filed by the second respondent. The second respondent admitted that the petitioner has filed exhibit P-7 letter before him and he issued exhibit P-8 reply also. The second respondent also explained the circumstances under which exhibit P-8 reply expressed his inability to issue copies of the assessment orders. The second respondent has given the details of the certificates issued for recovery of the tax due from the deceased, Z.M. Paret. In the counter affidavit, it is stated that as the petitioner was found to be in possession of some items of immovable properties, comprised in the estate of the late Z.M. Paret as per Rule 85, a person, who without claiming title either as executor, administrator or heir, but who is in possession of the deceased''s estate can also be treated as a legal representative. It is also stated that Sri K.V. Pothen who was the original executor of the late Sri Z.M. Paret subsequently died and hence on his death the petitioner can be proceeded against as one of the legal representatives. Since the petitioner himself had admitted that the claim petition filed by him is pending before the Tax Recovery Officer, it is premature to approach this court invoking the special jurisdiction of the court under Article 226 of the Constitution of India. A copy of the probate application is not available in the case records of the late Z.M. Paret.

Sri K.C. John, learned counsel appearing for the petitioner, submitted that the petitioner did not get any of the assets left by the deceased, Z.M. Paret. He pointed out that all the properties left by Z.M. Paret are given in the application for probate filed by one Varkey Pothen as O. P. No. 188 of 1983 before the District Court, Kottayam, as is evident from exhibit P-9. Learned counsel pointed out that in the said application the petitioner has not been shown as a person entitled to get any portion of the properties of the deceased, Z.M. Paret, nor has he got any of the properties mentioned in exhibit P-9 probate application. Learned counsel submitted that the deceased, Z.M. Paret, left assets worth more than rupees five lakhs besides the deposit of rupees three lakhs in the State Bank of Travancore, Kanjikuzhy Branch, Kottayam, as per Term Deposit Receipt No. 1262/31/153 of 1980 and the said amount was withdrawn on June 18, 1991, by the late P.J. Kaumose, from the bank. Learned counsel further submitted that only the late P.J. Kaumose and his heirs are responsible for any dues of the late Z.M. Paret. The complaint of the petitioner is that before issuing exhibit P-6 attachment order including the properties belonging to the petitioner in the said order no enquiry as contemplated under Rule 85 read with Rule 83 of the Second Schedule to the Act has been conducted in spite of the very detailed replies evidenced by exhibits P-2 and P-5 submitted by the petitioner before the first respondent. The further complaint of the petitioner is that in spite of exhibit P-10 claim petition as contemplated under Rule 11 of the Act filed by him before the second respondent, the second respondent has not so far conducted any enquiry as contemplated therein. Learned counsel also submitted that even if the petitioner has got some of the items of properties which originally belonged to the deceased, Z.M. Paret, long before 30 years before the death of Paret, the petitioner has become the owner of the property by adverse possession and limitation and since he had prescribed title to the property long before the issue of notice as contemplated under Rule 2, the petitioner cannot be treated as a legal representative with reference to that.

Learned counsel also submitted that the items of properties which belong to the petitioner and are mentioned in exhibit P-6 have not been included even by the executor as an item of property left by the deceased and therefore it cannot be said by any stretch of imagination that the petitioner is a legal representative as defined in the Act. Learned counsel alternatively submitted that, at any rate, the first respondent was bound under the provisions of Rule 11 of the Second Schedule to conduct an investigation and adjudicate the same as contemplated under the sub-rule. Learned counsel also pointed out that without adjudicating the claim made in exhibit P-10 as provided under Rule 11 of the Second Schedule the first respondent cannot proceed to recover the amount by sale of the properties belonging to the petitioner. Learned senior counsel accordingly submitted that exhibits P-l and P-6 proceedings issued by the second respondent have to be quashed or at any rate, the first respondent must be interdicted from proceeding pursuant to exhibits P-l and P-6 against the petitioner.

I have also heard Sri N.R.K, Nair, learned Central Government standing counsel appearing for the respondents. He reiterated the submissions made in the counter affidavit and further submitted that in view of exhibit P-10 claim petition pending before the first respondent all these matters can be considered in the said petition.

I have considered the matter. The petitioner is aggrieved by exhibits P-l and P-6 notices issued by the first respondent for recovery of a sum of Rs. 28,090 with interest being arrears of tax due from the late Z.M. Paret. The petitioner had filed exhibits P-2 and P-5 replies contending that he is not a legal representative of the deceased, Z.M. Paret, and the legal representatives are the persons mentioned in the probate application and that they are the only persons who are entitled to the estate of the deceased, Z.M. Paret. Learned counsel also pointed out that the two items of properties referred to in exhibit P-6 attachment order are properties, which were obtained by the petitioner about 30 years before the death of Z.M. Paret and that the petitioner has prescribed title to the said properties long before the death of Z.M. Paret. In such circumstances, according to the petitioner, the said properties cannot be treated as properties passing on the death of Z.M. Paret. The petitioner also pointed out that these two items of properties have never been considered as properties passing on the death of Z.M. Paret, as is evident from exhibit P-9 probate application. It has also been pointed out that very substantial items of properties were left by the deceased, Z.M. Paret, including cash deposit of Rs. 3,00,000 and that these assets admittedly devolved on Sri P.J. Kaumose and thereafter his legal heirs. It is seen from exhibit P-6 that attachment orders were issued against five persons including the petitioner and that the properties belonging to persons other than the petitioner are also included therein.

In view of exhibits P-2 and P-5, the first respondent should have conducted an enquiry contemplated under Rule 85 read with Rule 83 of the Second Schedule to the Act. It would appear that before effecting attachment of the properties belonging to the petitioner also as per exhibit P-6 the first respondent has not conducted any such enquiry. At any rate, when the petitioner has filed exhibit P-10 claim petition as contemplated under Rule 11 of the Second Schedule to the Act the first respondent should have conducted the enquiry as contemplated therein. In this case, it is not stated in the counter affidavit filed by the second respondent that the first respondent has conducted any such enquiry. Since the first respondent is clothed with powers of a civil court while trying a suit for the purpose of receiving evidence, administering oath and compelling the production of documents under Rule 83 of the Second Schedule to the Act, I am of the view that instead of deciding the question raised in the original petition by this court the first respondent can be directed to adjudicate the claim petition, exhibit P-10, and decide the matter as provided under Rule 11 read with Rule 83 of the Act with notice and opportunity to the petitioner. Even otherwise the first respondent is bound to adjudicate the claim made in exhibit P-10. Accordingly, the original petition is disposed of by directing the first respondent to adjudicate the claim petition, exhibit P-10, in accordance with law and in the light of the observations contained here. Till such time as the first respondent takes a final decision on exhibit P-10 application as directed above, further proceedings for recovery of the amounts due from the deceased, Z.M. Paret, from the petitioner pursuant to exhibits P-l and P-6 will be kept in abeyance.

The original petition is disposed of as above.