Law:

Section:

Rule 16, read with rule 2 of Schedule II to the Income-tax Act, 1961 – Private alienation to be void in certain cases – Whether Civil Court is deprived of jurisdiction to issue any process against any property of defaulter in execution of decree for payment of money after notice is served on defaulter under rule 2 – Held, yes – Notice under rule 2 was served on assessee and attachment of properties in dispute was effected by department – Subsequently, said properties were sold but said sale was set aside on ground of certain irregularities – Meanwhile those properties were attached in suit by decree holder – Whether attachment of properties by decree holder after notice under rule 2 was issued was void – Held, yes FACTS The demand notice under rule 2 was served on the defaulter on 15-5-1968, and an attachment also was effected by the income-tax department on 11-4-1969. The properties in dispute were sold on 8-10-1969, by the Tahsildar. But the sale was set aside on 17-4-1970, because of certain irregularities in the conduct of the sale. However, in July, 1969 the properties were attached in a suit which was decreed on 23-8-1971. In pursuance of that attachment, the decree-holder instituted execution proceedings against the properties. The department filed application for a declaration that the attachment of the properties of the judgment debtor was void and that the attachment should be raised. The application was, however, dismissed by the Additional Subordinate J udge. On revision petition: HELD The Civil Court is deprived of the jurisdiction to issue any process against any property of a defaulter in execution of a decree for payment of money after a notice is served on the defaulter under rule 2. The setting aside of the sale had not the effect of vacating the attachment effected by the department. In any event, by reason of sub-rule (1) of rule 16, the question whether an attachment was subsisting or not was also irrelevant for the purpose of deciding the case, because the mere issue of a demand notice under rule 2 is sufficient to deprive the Court of the power of issuing any process against the property of a defaulter. The decree-holder's attachment was…

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