Judgment:
T.D. Sugla, J.
1. By the petition under article 226 of the Constitution of India, the petitioner challenged the legality of recovery proceedings against his property known as 'Junki Niwas', D. L. Vaidya Road, Dadar, Bombay-400 028, by the Tax Recovery Officer, G Ward, Bombay, and the proposed sale of the same. It is the case of the petitioner that he purchased the said property bona fide and in good faith for a sum of Rs. 80,000. The negotiations therefore started some time in April, 1980. After making necessary inquiries as to the title of the vendor, the sale deed was executed on April 7, 1981. Tax clearance certificate dated October 5, 1981, from the Income-Tax Officer under Section 230A of the Income-Tax Act 1961, was obtained by the vendors, on the basis of which the sale deed was registered on April 23, 1982. Besides the usual inquiries, the petitioner, it is stated, had given notice in two local Marathi newspapers Bombay Sakal and Navashakti, thereby asking any person having any right, title or interest in the said property to come forward within 14 days thereof. It is stated that no objection was received by the petitioner from any quarter including the Income-tax Officer. Thereafter, the petitioner started running a lodge in the name and style of 'Hotel Amita' on the third floor of the said premises.
2. By a letter dated April 26, 1983, exhibit H-1 to the petition, the Tax Recovery Officer. G Ward, Bombay, required the petitioner to inform whether he had purchased the said property; if so, whether the vendors, Shri K. K. More and others, obtained any clearance certificate from his office and, if so, to furnish a copy thereof. Some correspondence seems to have been exchanged between the Tax Recovery Officer and the petitioner and, eventually, by proclamation of sale, exhibit N to the petition (vide pages 34 to 37 of the paper-book), the Tax Recovery Officer put the said property to sale in terms of the letter to be cautioned on January 7, 1984.
3. Thereafter, this petition was filed. It is pertinent to mention that, in the affidavit-in-reply. The Income-tax Officer has averred that the vendors, Shri K. K. More and others, were in high eerier. The assessments made on them had become final. The said property was attached by an order in November 1976. The residents of the suit property knew about it. The petitioner and the vendors were known to each other and, therefore. The petitioner must also be knowing about the attachment. Further, the tax clearance certificate was obtained by the vendors by misrepresentation from an Income-tax Officer other than the Income-tax Officer who had jurisdiction over them. The registration of the sale deed on the basis of such a tax clearance certificate, according to Shri Jetley for the Income-tax Department, particularly when the property was under attachment, was void in view of rule 16 of Schedule II of the Income-tax Act.
4. Having heard the rival contentions and after going through the petition, the documents attached thereto and the affidavit-in-reply, it appears to me that, for the purpose of this case, it may be assumed that the petitioner had purchased the suit property in good faith, i.e., after making all necessary inquiries. He may not have any hand in the vendors' obtaining a tax clearance certificate from an Income-tax Officer who did not have jurisdiction over them. It may also be that he was not knowing that the property was under attachment. All the same. The fact remains that the property was under attachment and the tax clearance certificate was obtained from an Income-tax Officer other than the Income-tax Officer who had jurisdiction over the vendors. In the facts of the case, in my judgement, the provisions of rule 16 are clearly attracted. The sale is, thus, void and the Tax Recovery Officer will be entitled to proceed to recover the taxes due from the vendors from the suit property.
5. Since, however, in its writ jurisdiction, this court cannot go into facts which are disputed and there is no material on record justifying the allegations of the Department that the petitioner was in league with the vendors, it is considered fair and in the interest of justice to direct the commissioner of Income-tax to hear his appeal if he files it within 30 days hereof against the order of the Tax Recovery Officer as contemplated in Rule 86 of Schedule II.
6. In the result, the rule stands discharged. No order as to costs.