UNION OF INDIA vs. SOMASUNDRAM MILLS (P) LTD. & ANR.

Last updated: 12 October 2007

Court :
SUPREME COURT OF INDIA

Brief :
Recovery—Attachment—State’s right of priority—Sale proceeds of attached property taken by some other attaching decree holder—Recovery of tax due to the Department—Prohibitory order issued by Collector in respect of certain shares belonging to the defaulter assessee—Tehsildar accordingly directed to attach the shares and sell them by public auction—Thesildar sleeping over the same for considerable time—A third party (third respondent herein) got the very same shares attached and sold in pursuance of a Court decree in its favour and this happened subsequent to the issue of the above prohibitory order—State, under such circumstances, is entitled to recover the amount from the third respondent who took away the said amount—Case would have been different had the amount been taken away by the other attaching decree holder before the State had effected attachment of property—Scope of the State’s right of priority—Clarified

Citation :
(1985) 45 CTR (SC) 93 : (1985) 152 ITR 420 (SC) : (1985) 21 TAXMAN 9