One Y.S. Devendra Murthy who was the owner of the property auctioned by the income Tax Department had companymitted default in payment of income tax dues assessed against him for the relevant assessment years.
Both these writ appeals were heard together by a Division Bench of the Karnataka High Court companysisting of S.P. Bharucha, CJ as he then was and Justice Shivraj Patil.
4,45,783/ was accordingly deposited with the Tax Recovery Officer.
The Sale deed was to be executed by said shri S.Devendra Murthy within eight months which time limit was further extended by five months.
The third respondent herein was the successful bidder at the said auction and he became auction purchaser of these properties.
The appellant filed a quit for specific performance of the Agreement to sell on 2nd January 1984 alleging that said Shri Y.S. Devendra murthy had failed to execute the sale deed pursuant to the agreement.
The appellant also deposited Rs.3,42,322/ being the arrears of tax with interest and solatium with companyts with the tax recovery officer on the same day, that is 12th April 1988 He accordingly prayed for setting aside the auction sale.
An amount of Rs.
Earlier an ex parte decree was passed in the said decree was set aside and the proceedings remained pending.
A learned single Judge of the High Court by his order dated 14th December 1990 allowed the writ petition and quashed the orders dated 20th April 1988 passed by Tax Recovery Officer and dated 13th June 1988 passed by Tax Recovery Commissioner.
The Division Bench of the High Court came to the companyclusion that the appellants application under Rule 60 was number maintainable and he had numberlocus standi to file such an application.
Bangalore and Tax Recovery Officer by way of Writ Appeal No.293 of 1991 while respondent number 3 preferred Writ Appeal No.72I of 1991 against the very judgment and order of the learned Single Judge as by the said order of the learned Single Judge the auction sale in favour of respondent number3 was liable to be set aside if the remanded proceedings under Rule by were successful.
Consequently the writ appeals were allowed and the writ petition was dismissed with the result that the order of the Tax Recovery Officer dated 20th April 1988 and the further order of the Tax Recovery Commissioner dated 13th June 1988 came to be companyfirmed.
In the meantime by an order dated aforesaid properties to S. Devendra Murthy and thereafter proclamation of sale was issued for putting the tax dues of the defaulter.
The appellant along with the said application sought to deposit the interest and solatium at the rate of 5 with companyts.
But during the proceedings at numberice stage the original petitioner number1, the Power of Attorney holder of the defaulter , Y.S. Surendra withdrew from companytest with the result that original petitioner number2 remained the solitary petitioner in both the S.L.Ps and has number pursued the present two appeals as the sole appellant.
At that stage the appellant along with the general power of attorney holder of S. Devendra Murthy, named Shri Y.S. Surender filed a writ petition in the Karnataka High Court challenging the orders of the Tax Recovery Officer and Tax Recovery Commissioner.
thereafter on 12th April 1988, that is, within thirty days from the date of the auction sale the appellant filed an application under Rule 60 of the Second Schedule to the Income Tax Act.
In order to answer this question the backdrop facts may be numbered at the outset.
The first petitioner was Y.S. Surendra, the general Power of Attorney holder of the defaulter and the present appellant was petitioner number2.
The learned Single Judge held that the application moved by the appellant was maintainable under Rule 60 and as he had in the meantime withdrawn the deposited amount he permitted the general Power of Attorney holder of Y.S. Devendra Murthy to make deposit within the weeks and directed the Tax Recovery Officer to deal with the matter in accordance with law.
the Tax recovery officer brought the said attached properties to sale on 14th march 1988.
Learned senior companynsel, Shri P P. Rao, for the appellant submitted that the Division Bench of the High Court arred in taking the view that the appellants application under Rule 60 of Second Schedule to the Income Tax Act was number maintainable.
A short question falls for our companysideration in these two appeals arising out of a companymon judgment or Division bench of the Karnataka High Court in Writ Appeal No 293 of 1991 companynected with Writ Appeal No.721 of 1991 the question is whether the companymon appellant in these appeals who was original petitioner number2 in these Special Leave Petitions had any locus standi to prefer an application under Rule 60 of the Second Schedule to the Income Tax Act, 1961 for setting aside the sale of immovable property of the defaulter income tax assessee from whom he is alleged to have agreed to purchase the said property and which property was sold in auction by the Income Tax Department in execution of Certificate of Recovery of lncome Tax issued against the defaulter, owner of the property.
The Tax Recovery Officer under the Income Tex Act issued numberice to him on 3rd September 1973 as per Rule 2 of the Second Schedule to the Income Tax Act which deals with Procedure for Recovery of Tax.
The tax Recovery officer by his order dated 20th April 1988 rejected by the companymissioner of Income Tax, Karnataka II, Bangalore to companyfirm the auction sale he had companyfirmed the auction sale he had companyfirmed the auction sale and hence the appellant carried the matter in appeal before the Tax Recovery companymissioner who rejected the said appeal and passed order dated 13th June 1988.
Aggrieved by the companymon order of the Division Bench of the high Court in the aforesaid two writ appeals two Special Leave petitions were moved in this Court initially by two petitioners.
The aforesaid order of the learned Single Judge was challenged by the Tax Recovery Commissioner.
To the said application was annexed a letter from the general power of attorney holder of the defaulter Shri Y.S.Devendra Murthy authorising him to deposit the amount of tax arrears.
Karnataka II.,
B. Majmudar, J. Leave granted in these Special Leave Petitions.
By companysent of learned advocates of companytesting parties the appeals were heard finally and are being disposed of by this judgment.
The said defaulter Shri Y.S, Devendra Murthy entered into an agreement dated 20th November 1982 with the companymon appellant to sell his property being agricultural land being Survey No.20 and part Of Survey number21 for Rs.2,80,000/ and received an advance of Rs 1.62,000/ .
