Law:

Section:

Section 222 of the Income-tax Act, 1961, read with sections 7 and 8 of the Public Demands Recovery Act, 1913 (Corresponding to section 46 (2) of the Indian Income-tax Act, 1922) - Collection and recovery of tax - Certificate proceedings - Whether from date of service of certificate under section 7, of Public Demands Recovery Act, 1913, immediately a charge is created on immovable property of certificate debtor wherever property is situated - Held, yes - Whether such right of certificate creditor does not get affected by bona fide purchase of property by third party - Held, yes FACTS The defendant No. 1 had failed to pay the full tax due, demanded from him. As a result, a certificate under section 46(2) of the 1922 Act, was issued for the balance sum whereupon the Certificate Officer duly issued and served upon defendant No. 1, a notice under section 7 of the Bengal Public Demands Recovery Act. After the issue and due service of the notice under the Public Demands Recovery Act, the defendant No. 1, transferred his premises to the defendant No. 3, who in turn transferred the said premises to defendant No. 4. The case of the plaintiff, was that after the service of the notice under the Public Demands Recovery Act a charge was created immediately on the said immovable property for the payment of the dues of the plaintiff, that anybody who had acquired the property after the service of the demand notice had taken the property subject to the charge in favour of the plaintiff. As such the plantiff filed the suit for enforcing the said charge. The defendants No. 3 and 4 filed written statements mainly taking the ground that they were bona fide purchaser for value without any knowledge of any notice being served on defendant No. 1 and, as such they were not bound by the said notice or their interest in the said premises was not affected thereby. HELD The Public Demands Recovery Act, 1913, consolidates the law relating to the recovery of public demands. It is a self-contained Act in itself and provides a complete law and a complete procedure of execution and as such it is unaffected by the general law of procedure. This is an Act providing for speedy recovery of public…

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