TMI Blog1981 (5) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... t order made by the ITO. Aggrieved by the orders of the AAC, the petitioner preferred revision petitions to the 1st respondent-Commissioner of Income-tax, Karnataka-I, Bangalore, under s. 264 of the Act on November 17, 1977, which were pending on the date of the filing of this petition. The ITO, in the meanwhile, had issued the recovery certificate on June 17, 1975, in respect of the petitioner to recover the arrears of tax of Rs. 4,10,372. The petitioner had made several requests to keep the recovery proceedings pending till the disposal of the revision petition. It is necessary to state that there was no stay of the recovery proceedings obtained by the petitoner from the Commissioner of Income-tax in the revision petitions pending before him The TRO, 2nd respondent, proceeding under Pt. I of Sch. II to the Act brought to sale certain immovable property of the petitoner situated in Bangalore City. The proclamation of sale was issued on October 19, 1977, and the date of sale was fixed as 18th November, 1977. The sale was postponed from time to time and the property was sold by public auction on April 20, 1978. The reserved price was fixed at Rs. 55,000 and the property at the aucti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat after the rule was issued in this case, the Commissioner exercising his jurisdiction under s. 264 of the Act has set aside the assessment orders in question and remanded the same for fresh assessment and, therefore, with the permission of the court a further ground was urged and that is that the sale was a nullity inasmuch as in the absence of assessments there were no tax arrears due for the relevant assessment years. The department as well as the 3rd respondent have resisted the petition. It is contended for them That the grounds urged in the petition by the petitioner are not tenable grounds at all and that the petitioner is trying to make a futile attempt to get a sale set aside which has otherwise in law become final, title having vested in the 3rd respondent on the confirmation of sale in terms of r. 63 of Sch. II to the Act and nothing remains to be done except the mere formality of issuing the sale certificate which had been stayed by the 1st respondent when the appeal was pending before him. It is also contended for the respondents that there has been no violation of any of the rules in Sch. II to the Act relating to the sale and even if this court were to hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , he alone is to be blamed. Next, Mr. Venkateshwar Rao has contended that under the provisions contained in r. 15(2) of Sch. 11 to the Act, it is mandatory that there should have been a fresh sale proclamation, as the sale did not take place on the date fixed in the original proclamation of sale but was adjourned from time to time beyond the period of 30 days. From the records it is seen that nearly six months lapsed between the date of sale proclamation and the actual date of sale on April 20, 1978. It is also seen from the records that no fresh sale proclamation was issued after the sale proclamation bearing the date October 15, 1977. Thus, it is seen that there has been a violation of the provisions contained in sub-r. (2) of r. 15 of Sch. II to the Act. Therefore, the petitioner has established that there was material irregularity in the conduct of the sale. The question is whether the material irregularity is sufficient to set aside the sale under r. 61 of Sch. II to the Act in so far as the 2nd respondent is concerned. Rule 61 of Sch. II to the Act is as follows: " 61. Application to set aside sale of immovable Property on ground of non-service of notice or irregularity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce (Revenue and Insurance), Government of India, New Delhi. That certificate does not bear any date. It, however, certifies that the petitioner's site sold on April 20, 1978, as on March 31, 1978, would be fairly of the value of Rs. 2,03,400. But from the records it is seen that the reserved price fixed was at Rs. 55,000. The petitioner has neither co-operated as borne out by the impugned order of the 2nd respondent in the preparation of the sale proclamation so that a fair market value could be fixed for the site even by consent. Not having done that, it is difficult to accept the valuation report which appears to have been produced only in these proceedings. An undated valuation report cannot normally be relied upon to fix the fair market value of the property. Even the report states that the site could be developed as a commercial area and it is only the opinion of the valuer that Rs. 600 per sq. yd. is reasonable. He does not appear to have taken the value of the adjoining property sold, if any. No attempt appears to have been made to ascertain the value of the adjoining properties sold in the recent past as the report is silent on that aspect. Rule 61 of Sch. II to the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this court inasmuch as the sum of Rs. 1,08,000 was inadequate. While discussing the first contention advanced by the petitioner I have discussed the inadequacy of consideration as well. I do not find any material by which this court can reasonably come to the conclusion that the consideration is inadequate. In the absence of material to the contrary, the price fetched, which is a little over 50 per cent. of the value fixed by the registered valuer at Ex. D, appears to be not unreasonable in the instant case on the assumption that the registered valuer's appraisal is slightly exaggerated and not based on any tangible material for the reasons I have given. In support of the contention of inadequacy of consideration as a result of material irregularity in the conduct of sale, the learned counsel for the petitioner relied upon the decision of the Punjab and Haryana High Court in the case of Kishan Chand Aggarwal v. Union of India [1975] 100 ITR 496 [FB]. No doubt, the Full Bench of that High Court did interfere on the facts of that case and set aside the sale on the ground that the auction sale was held in pursuance of a proclamation which was so vague and silent about the materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uard public interest. Thus balanced it can be safely said that the High Courts will not, except in exceptional cases, interfere, under art. 226 of the Constitution if larger public interest is to be served by refraining to do so. In the instant case, what the learned counsel for the petitioner has overlooked is that the jurisdiction of this court was not invoked in the very first instance, i. e., when the sale took place. He apparently could not, as this court would have, in such a proceeding, tested its maintainability both on the question of lack of jurisdiction of court in holding up the sale or on the existence of an alternative remedy. That does not arise now as it is nobody's case that the 2nd respondent had no jurisdiction to order the sale as at the relevant time the assessment orders were in force and that had not been stayed by the appellate authorities at any time. The petitioner himself chose the remedy within the statute, that is, to make an application under r. 61 of Sch. II to the Act. On failure, the petitioner preferred an appeal to the appellate authority under r. 86 of Sch. II to the Act. On failure to get the sale set aside even by the appellate authority, he ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmation of sale is not a bar for setting aside the sale, if there are other illegalities in the conduct of the sale which require that such sale should be set aside. On the other hand, learned counsel for the 3rd respondent-auction purchaser has placed strong reliance on the decision of the Supreme Court in the case of Janak Raj v. Gurdial Singh, AIR 1967 SC 608, to which reference has been made earlier in the course of this order, as one of the cases discussed by the learned single judge of the Madras High Court in Pandurangan's case, AIR 1973 Mad 107. The case before the Supreme Court arose in the following manner. An ex parte decree was obtained by the plaintiff against the defendant for Rs. 519. That decree was executed and the house belonging to the defendant-judgment-debtor was attached. Subsequently the property attached was brought to sale and was purchased for Rs. 5,100 by an auction-purchaser. The defendant-judgment-debtor, subsequent to the sale, applied for setting aside the ex parte decree which came to be allowed. He filed an objection petition against the sale of his property on the ground that the property was worth Rs. 25,000 while it had been auctioned for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court which was noticed with approval by the Supreme Court in Janak Raj's case, AIR 1967 SC 608, in support of his contention, that Sch. II to the Act now contained a special procedure for tax recovery and the public policy underlying the execution proceedings under the CPC should as well apply to the procedure of sale for the realisation of tax dues. It has been his argument that the application of the petitioner came to be dismissed among other reasons for not depositing the tax due on the relevant date in accordance with the mandatory requirements of prov. (b) of r. 61 of Sch.II to the Act. Therefore, it is his case that a third party who has acquired rights in the property and in whose favour the sale is confirmed is entitled to maintain that right irrespective of what may become of the assessment order which was on the date of sale a legal and valid order. There is some force in this argument. The Act provides for numerous remedies against an assessment order. If while pursuing those remedies the assessee has not taken adequate steps and precautions to get the assessment orders stayed, it necessarily follows that the amounts due under the assessment orders are liable to be rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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