Case Law Details
IGGI Resorts International Limited Vs Tax Recovery Officer (Madras High Court)
Facts- The petitioner was in arrears of income tax for a sum of Rs.29,84,56,331/- for the period prior to the year 2008. Earlier, proceedings were initiated and Tax Recovery certificate was issued on various dates (02.06.2000, 16.01.2003 and 19.03.2007) by the Tax Recovery Officer, Chennai-34. An earlier attempt was made in the year 2008, for drawing up a proclamation of sale deed by an undertaking, dated 16.06.2008 of the Tax Recovery Officer-II, Chennai-34. The petitioner was called upon to participate in the aforesaid proceedings on 26.07.2008.
Apart from the arrears of tax there were several other outstandings to its customers which included both the registered and unregistered time share holders and amounts due to Repco Bank and Municipal dues. It appears an unauthorised person was in occupation of the property and further earlier to auction did not materalize. When the earlier attempt was made to auction the subject property by issuing a advertisement on 27.09.2008, the reserved price of Rs.4,10,00,000/- was fixed by the respondent Income Tax Department in terms of Chapter III of the Second Schedule of the Income Tax Act, 1961(procedure for recovery of tax). The auction was proposed on 13.10.2008 at 11.30 a.m. However, the aforesaid auction did not materalise as the public did not evince any interest in the auction.
Thereafter, a second attempt was made by the Income Tax Department by issuing another proclamation of sale dated 21.08.2009. At that point, it was mentioned that the petitioner was in arrear for a sum of Rs. 18,63,83,869 as on 29.09.2009 excluding cost and interest. If public auction was fixed to be held on 29.09.2009 at the Income Tax Auditorium, No.121, Uthamar Gandhi Salai, Nungambakkam, Chennai-34 at 3p.m. However, it appears that the said auction also did not materalise.
The case of the petitioner before this Court is that the impugned auction notice dated 27.02.2017 was published on 01.03.2019 does not disclosed the reserve price through fixed the market price of Rs.4,66,41,035/-. It is the specific case of the petitioner that if the sageguards in Chapter III of the Second Schedule to the Income Tax Act, 1961 dealing with attachment and sale of immovable property particularly Rule 52, 53 and 54 were followed, the auction would have fetched a higher bid amount and therefore there was a material irregularity in the auction conducted by the respondents on 14.03.2019.
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