T.L Viswanatha Iyer, J.:— Heard counsel for the petitioner and Sri N.R.K Nair, counsel for the respondents, who took notice and opposed the original petition.

2. An order for arrest under rule 73 of Schedule II to the Income-tax Act, 1961, is under challenge in this original petition. This order, exhibit P-4, passed by the second respondent, the Tax Recovery Officer, was confirmed on appeal by order exhibit P-7 passed by the Commissioner of Income-tax. An amount of Rs. 7,87,784 was due from the petitioner by way of income-tax, wealth-tax and interest for various years from 1965-66 to 1975-76 as set forth in paragraph 2 of the order, exhibit P-7. The certificates for recovery in relation to these arrears were received in the second respondent's office between March 26, 1981, and March 31, 1985, as detailed in the aforesaid order. The Tax Recovery Officer found that the petitioner had, after March 26, 1981, dishonestly transferred in October, 1984, his right in what is described as the West Hill Property to M/s. Malabar Produce and Rubber Company Ltd., by execution of a registered lease deed and concealed such particulars as also receipt of Rs. 3 lakhs from the company, from the purview of the Department. He also found that the petitioner, having had the means to pay the arrears or substantial part thereof, refused or neglected to pay the same. In appeal, the Commissioner has confirmed this order.

3. The petitioner owned two properties in Calicut, one 60 cents in Sy. No. 25/3 of Kacheri amsom (West Hill Property) and another having an extent of 84 cents in Nedungottoor amsom called the Kara South Bungalow. This latter property had been acquired and an amount of Rs. 4,20,970 had been deposited in the Sub-Court, Calicut, as compensation. There are various claimants for payment out of this amount, namely, the Tahsildar, Kozhikode, for Rs. 1,79,884 for revenue arrears, the Corporation of Calicut for Rs. 32,961 for arrears of property tax, the Kerala State Civil Supplies Corporation for Rs. 13,403 as per the decree passed by the Munsiff-II, Calicut, besides the Tali Devaswom for value of Jenmom rights.

4. The West Hill property had been mortgaged to the Chartered Bank, Calicut, which had obtained a decree in O.S No. 84 of 1981, Sub-Court, Calicut, under which it is stated that as on June 8, 1985, an amount of Rs. 4,41,000 was due. One Jolly Thomas, a director of the Malabar Produce and Rubber Company Ltd., had purchased this decree from the Chartered Bank, Calicut.

5. To understand the contentions of the petitioner, a few facts may be stated. It would appear that the petitioner had applied for clearance certificate under section 230A for sale of the West Hill property. It would appear that he had represented that the sale was being effected for Rs. 5 lakhs, out of which there will be a surplus of Rs. 1.5 lakhs after discharging the bank's liability. It was, however, discovered later that the sale was not actually for Rs. 5 lakhs, but for Rs. 9.75 lakhs. This was brought to the notice of the petitioner when it appears, he made a representation that he will deposit Rs. 1.14 lakhs after effecting the sale with the Department towards his tax liabilities. This amount was arrived at by deducting from the consideration of Rs. 9.75 lakhs, the amounts which he stated were payable otherwise, namely, Rs. 4.60 lakhs to Jolly Thomas as the purchaser of the decree, Rs. 3 lakhs to close friends and relatives in repayment of loans taken for the purchase of this property and Rs. 1.01 lakhs as the amount required for expenses and incidentals. The balance left behind was Rs. 1. 14 lakhs. The Department was not prepared for this course and their suggestion appears to have been that the petitioner should pay Rs. 5.34 lakhs to the Department, this amount being the amount left with the petitioner out of Rs. 9.75 lakhs after meeting the liability of Rs. 4.41 lakhs due to the bank. The tangled mass of facts leading to the request for clearance certificate and its refusal are set forth in paragraph 4(iii) to (v) of the order, exhibit P-7, and paragraph 3 of exhibit P-4. I am not going into the, validity or otherwise of these facts in detail inasmuch as the clearance certificate is to be issued by the Income-tax Officer and he is not a party to this original petition. Though there is a prayer (b) in the petition to issue a writ of mandamus compelling issuance of “section 230A certificate”, it cannot be considered in this original petition for non-joinder of the Income-tax Officer who is the authority to issue the same. However, these facts are being referred to only because the petitioner has a grievance that he could not pay off the amounts due to the Department because of the refusal of clearance certificate.

6. The petitioner's complaint that the clearance certificate has been wrongfully withheld cannot be gone into at this stage for another reason as well. This is because the Income-tax Officer appears to have refused the clearance certificate, even after the order in O.P No. 4877 of 1986, as can be seen from paragraph 3 of the order, exhibit P-4, as also paragraph 5 of the counter-affidavit filed by the first respondent. If he is aggrieved by such refusal, it is up to the petitioner to resort to proceedings warranted by law in relation to the same.

7. The petitioner's offer to pay Rs. 1.5 lakhs out of Rs. 5 lakhs to be received from the Malabar Produce and Rubber Company Ltd. appears to have been made on March 20, 1985. At that stage, the petitioner had not disclosed to the Department the fact that he had leased out this property to the aforesaid company in October, 1984, and also received an amount of Rs. 3 lakhs from them. This fact had been suppressed from the Department, but was discovered later in the course of the negotations and hearing of the application under section 230A.

8. The petitioner had a case that this amount of Rs. 3 lakhs had been utilised to discharge other liabilities. The Tax Recovery Officer had, therefore, called upon the petitioner by various letters referred to in exhibit P-1 to furnish details of the loans taken by him for the purchase of the West Hill property. The petitioner had not, however, disclosed the persons from whom he had taken loans for purchase of this property. The second respondent has detailed all this in exhibit P-1. The reply, exhibit P-2, which the petitioner sent, did not again disclose the persons from whom he is alleged to have taken loans for purchase of this property. The petitioner had a case that an amount of Rs. 1,90,000 out of Rs. 3 lakhs received by him had been utilised for repayment of loans taken to discharge these loans obtained for purchase of the property, so that the veracity and existence of these loans was a relevant factor arising for determination in these proceedings. The petitioner however, did not disclose those details and it is only in exhibit P-5 for the first time that he mentioned about a loan of Rs. 1,50,000 taken from one Joe Thomas.

9. It is an admitted fact that the petitioner had received Rs. 3 lakhs in October, 1984. The petitioner had suppressed even the bank account in which this amount had been deposited from the Department. The amount deposited was withdrawn soon after the deposit and it is alleged to have gone in discharging two creditors, (1) Don Bosco Enterprises, Trichur, Rs. 1,90,000; and (2) K.J Ittyavira Kanjirapally, Rs. 1,10,000 The respondents have held that the petitioner thus had the means to pay a substantial part of the arrears in 1984, but did not choose to pay the same. The petitioner's contention is that this amount had been utilised to pay the aforesaid two creditors. He would say that he had utilised the amounts so borrowed for payment of the debts taken from relatives and friends for purchase of this property. He did not, however, choose to disclose the names of these alleged relatives and friends despite repeated requests from the second respondent and the name of one of such persons made its appearance for the first time only in exhibit P-5. The Tax Recovery Officer was not apparently satisfied with this explanation and he has stated that the story of loans taken from friends and relatives itself made its appearance only after the Department discovered that the sale consideration for the West Hill property was fixed at Rs. 9.75 lakhs as against Rs. 5 lakhs intimated to the Department. If so, the alleged payment to Don Bosco Enterprises and Ittyavira cannot save the petitioner from the operation of clause (b) of rule 73(1) inasmuch as the petitioner had substantial amounts with him with which he should have paid a substantial part of the dues to the Department.

10. The petitioner's contention in reply is that he made the payments as the claims of these alleged creditors were pressing. Nothing has been brought out in the pleadings or otherwise to show that the dues to these creditors had to be paid urgently or that their demands were such that the petitioner stood in peril of great jeopardy otherwise. It is not as if the petitioner was met with urgent necessity or pressing claims in making these alleged payments to Don Bosco Enterprises and Ittyavira even assuming that those payments were genuine and valid. The decision relied on by the petitioner in Jolly George Varghese v. Bank of Cochin, (1980) 2 SCC 360 : AIR 1980 SC 470, does not, therefore, avail him. When the authorities below were not prepared to accept the story of loans taken from friends and relatives, the whole edifice of repayment of those loans, on which the petitioner's defence of non-payment of Rs. 3 lakhs admittedly received by him to the Department rests, has to fail.

11. The petitioner further states that this amount of Rs. 3 lakhs had been received by him by way of deposit and was refundable in case the sale did not go through. This contention does not stand scrutiny for a moment for the reason that, even according to his own case, he had utilised this amount for payment to alleged creditors, Don Bosco Enterprises and Ittyavira. If he could utilise the money for payment to other alleged creditors, there is no reason why he should not have utilised it for payment of the income-tax dues for which the certificate had been issued as early as on March 26, 1981.

12. I may also point out that the petitioner has not pointed out even in exhibit P-5 as to when the loan from Ittyavira was taken. It is admitted in exhibit P-5 itself that the loan from Don Bosco Enterprises was taken only in June, 1984, long after the certificate had been issued on March 26, 1981.

13. The petitioner states further that, even according to the Department, he had had no income after 1975. This, he states, is by virtue of the fact that he had not been assessed to income-tax after 1974-75. The petitioner now states that he had to spend money for his maintenance and this amount of Rs. 3 lakhs should be taken to have been utilised for that purpose in any event. This is a plea inconsistent with his case that he had utilised the amount for payment to Don Bosco Enterprises. Apart from that he had had no such case before the authorities that he had utilised these amounts for maintenance. When such a plea was not there before the respondents, I do not think there is any credibility attaching to it coming as it does for the first time in this original petition and that too in a manner inconsistent with his other main plea.

14. The respondents have found that the petitioner has dishonestly transferred the property in October, 1984, by executing a lease deed to Malabar Produce and Rubber Company Ltd. The fact that he had executed this lease deed and that he had received Rs. 3 lakhs from the company had been kept back from the Department for a very long time. In fact, it came out only when the Department discovered that the sale price was Rs. 9.75 lakhs and not Rs. 5 lakhs. It is obvious that the petitioner has not been acting honestly in relation to the Department. The facts set out by the second respondent in paragraph 3 of exhibit P-4 and by the first respondent in paragraph 4(iii) to (v) clearly establish that the petitioner was dishonest in his dealings with the Department and had not made a full and frank disclosure of his dealings, receipts and others. His obvious attempt in the first instance was to conceal the receipt of Rs. 3 lakhs. Even in relation to the proceedings under section 230A, it can be seen that the petitioner has been shifting his position from time to time and had also made misrepresentations.

15. In this connection, I may just mention that the petitioner's case was that if the clearance certificate was issued in relation to the West Hill property, he will be able to pay Rs. 1.14 lakhs to the Department and get complete clearance of the Kara South Bungalow which can be proceeded against by the Department for recovery of the dues. Actually, there were numerous claimants for the amount of compensation due to the Kara South Bungalow and nothing substantial would have been available for payment thereunder. All these matters have been referred to in detail in the orders, exhibits P-4 and P-7. I do not think it is necessary to go through the same over again, since a conspectus of those facts cannot but lead to the conclusion arrived at by the respondents. The respondents were, therefore, justified in holding that there has been dishonest transfer of property and that the petitioner had also concealed details of his property from the Department and that he had not utilised the sum of Rs. 3 lakhs for repayment of his tax dues.

16. The orders, exhibits P-4 and P-7, are arrived at on an appreciation of the entire evidence and materials in the case before the respondents and it is not possible for this court to interfere with these orders. It is not a case where the respondents have acted without any material or evidence. Their findings are certainly possible to be arrived at on the materials before them. It is not possible for this court to reappreciate the said evidence and material as if it were sitting in appeal over the decision in exhibit P-7. I have just narrated the salient features in the case, which according to me, substantiate the findings arrived at by the respondents so that there is really no scope for any other conclusion being possible on the materials on record. The orders, exhibits P-4 and P-7, are, therefore, sustainable in law and are not liable to be interfered with in these proceedings. The petitioner also challenges exhibit P-10. That is only an order by which a property has been ordered to be sold. I do not find any illegality in the same. If the petitioner has got any objections relating to exhibit P-10 on the merits, it is up to him to raise those points in the proceedings before the authorities.

17. The original petition is without substance. It is accordingly dismissed, but without any order as to costs.