1. A short but interesting question has arisen in this writ petition. The petitioner is the mother and guardian of her minor daughter, in whose favour the petitioner's husband and the minor's father settled a certain property in and by a registered deed of settlement dated 11th July, 1969, registered on 1st August, 1969. The petitioner's husband, one K.R Krishnappa Chettiar, hereinafter referred to as Mr. Chettiar, was a dealer within the meaning of the Tamil Nadu General Sales Tax Act. For the assessment years 1966-67 to 1969-70, Mr. Chettiar was assessed to tax on his dealings and such assessments were completed by November, 1969. As the assessment orders themselves were completed only in November, 1969, it follows that no demand for payment of tax under such assessment orders could have been issued prior to the deed of settlement referred to above. But after the property was settled by Mr. Chettiar in favour of his minor daughter, the notice dated 12th February, 1970, was issued by the Joint Commercial Tax Officer— purporting to be under the provisions of Madras Act II of 1864 (Tamil Nadu Revenue Recovery Act) threatening to attach and sell the property, which was the subject-matter of the deed of settlement referred to above. The property was also proposed to be sold in public auction under section 36 of the Act.
2. On verification, the petitioner, as the guardian of the minor child, found that the above notice was consequent upon the default committed by Mr. Chettiar in the matter of payment of the sales tax for the four years set out already. The petitioner objected that so long as the property was not the property of the defaulter on the dates when action was taken either to attach the property, or to sell the same, the provisions of the Revenue Recovery Act would not be attracted and no sale pursuant thereto could follow. But having had no beneficial reply to her note of caution, she has come up to this court for the issue of a writ of certiorari to quash the notice of sale issued by the respondent functioning under the Tamil Nadu Revenue Recovery Act to bring the property to sale.
3. One contention of Mr. Srinivasan is that under the provisions of the Revenue Recovery Act, the property of a defaulter only can be brought to sale, and not a property admittedly standing in the name of third parties on the date when action was initiated. Section 5 of the Revenue Recovery Act enables the Collector to proceed to recover the arrear of revenue together with interest and costs of process by the sale of the defaulter's movable and immovable property, etc. Though the defaulter is not defined, yet it can normally be understood as the person in default.
4. In the instant case, Mr. Chettiar is the person in default. The property sought to be attached and sold under the impugned notice on the date when the notice was issued was not the property of the defaulter because long prior to that date, to wit, 1st August, 1969, he settled the property in the name of his minor daughter, who is now represented by her mother. In these circumstances, it is rightly said that the provisions of the Revenue Recovery Act are not applicable. As a matter of fact, this was the position even under the Indian Income-tax Act, 1922, prior to the induction of section 281 into the Income-tax Act of 1961. In such a situation, Rajamannar, C.J, speaking for a Division Bench in Dhanalakshmi Ammal v. Income-tax Officer [1957] 31 I.T.R 460; A.I.R 1957 Mad. 376., has observed that there is no provision in the Madras Revenue Recovery Act which enables the Collector to attach and sell land not registered in the defaulter's name for arrears of revenue due from the defaulter. Respectfully following the ratio as set out above, in the instant case, the property ceased to be the property of the defaulter on the day when action was initiated to attach and sell the same. If the property, therefore, is not the property of the defaulter, then the statutory authority functioning under the Revenue Recovery Act can neither attach nor sell the same as if the property is that of the defaulter. The petitioner's contention, therefore, has to be accepted and the rule nisi made absolute.
5. The writ petition is allowed, but there will be no order as to costs. The respondent is at liberty to take such action in law as is available to establish that the property in question is still to be deemed as the property of Mr. Chettiar notwithstanding the settlement.
6. Petition allowed.
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