A curious case of property attachment

Property auctioning proclamation accompanied by traditional beating of drums by the Income Tax Department in Kasaragod on Thursday.   | Photo Credit: Ramanathpai

On Thursday, residents here might have felt as if they had entered a time warp. What they saw was a group of traditional drummers accompanying an official who read out the Income Tax Department’s decision to attach and auction the property of a deceased tax defaulter. Kanathur, Bovikkanam, Cherkala, Chengala, and the old bus station premises witnessed the procedure.

The dues were owed by the late K.P. Madhavan Nair, patron of the Nalvar Devasthanam at Kanathur here.

A senior Income Tax official said the public proclamation was in strict compliance with at least three High Court verdicts, for avoiding any possible challenge of the decision in a court of law.

When contacted, V. Sandesh, Tax Recovery Officer in Kozhikode, clarified that such a procedure was adopted as per provisions of the second schedule of the Income Tax Act, 1961. He added that no such exercise has been carried out over the past 20 years in areas falling under the Kozhikode Income Tax Commissionerate.

“Every proclamation for the sale of immovable property shall be made at some place on or near such property by beat of drum or other customary mode,” the IT Act-1961 says. This is in sharp contrast to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 that empowers banks and other financial institutions to auction residential or commercial properties to recover loans, the official said.

The authorities had advertised the public auctioning, scheduled for March 19, in a Malayalam daily. It detailed the terms and conditions for aspiring bidders of 20 cents of land and a small building at Kanathur.

The beginning

The action against Madhavan Nair was initiated after he was found to have defaulted tax payments for ₹97 lakh between 2003-04 and 2006-07 for unaccounted bank deposits. The liability rose to ₹1.25 crore, with the cumulative tax amount imposed at 12% during the defaulting period, official sources said.

Income Tax officials are in search of other properties in the defaulter’s name to recover the dues as the existing piece of land would not suffice to recover the dues.

The decision to attach and auction the property came after Madahavan Nair, who passed away in 2016, had filed suits in various courts, including the High Court, against the Income Tax Department’s move to attach his property.

However, the local Income Tax wing decided to act after his heirs apparent expressed their inability to mop up resources to clear the dues following an unfavourable court verdict.

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Printable version | Jan 20, 2022 2:38:26 PM |

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