Law:

Section:

Section 222 of the Income-tax Act, 1961 (Corresponding to Section 46(1) of the Indian Income-Tax Act, 1922) - Collection and recovery of tax-certificate proceedings - Appellant - Creditor filed a suit against debtor and obtained a decree - In execution of decree, he brought properties of Judgment-debtor to sale and certain amount being sale proceeds was deposited into Court at that time - Income-tax Department and Sales-tax Department filed applications asking for payment of said amount claiming priority - Whether State can invoke inherent powers of Court under section 151 of Code of Civil Procedure to claim prior payment without obtaining a decree for a debt due - Held, yes - Whether existence of section 46 of 1922 Act does not preclude Department from approaching Court for realisation of tax under section 151 of Code of Civil Procedure if moneys belonging to assessee are available - Held, yes - Whether, consequently, Income-tax Department and Sales-tax Department were entitled to payment on priority basis - Held, yes FACTS The appellant-creditor filed a suit against debtor and obtained a decree. In execution of it, he brought properties of -debtors to sale and certain amount being sale proceeds was deposited into Court at that time. Income-tax Department and sales-tax authorities filed application asking for payment of this amounts claiming priority. There was opposition from the decree-holder on the ground that as regards the sons' share there could be no priority and that the two Departments should only rank along with other simple creditors of the sons. It was further contended that the State was not entitled to ask for payment by mere application under section 151 of the Code of Civil Procedure for obtaining a decree for a debt due to it. These objections did not find favour with the trial court with the result that the applications of the Income-tax as well as Sales Tax Departments were allowed. On appeal: HELD By virtue of the theory of pious obligation the interests of the son in the joint family property are answerable for the debts of the father. It is now well settled that the whole of the joint family assets are liable for the debts of the father…

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