Jayesh Vadilal Parekh vs Commercial Tax Officer and Others

Sonia Gokani, J.—Mr. Tushar Hemani, learned advocate for the petitioner, seeks permission to delete respondent No. 4-Mr. Deepak Shantilal Magiya from the array of respondents. Permission, as prayed for, is granted. Respondent No. 4 shall stand deleted from the array of respondents. This petition under article 226 of the Constitution of India is preferred by the petitioner, who owns the property situated at Ward No. 7, Sheet No. 345, Survey No. 2930, B - Type Tenement No. B.D./11 of Yogeshwar Tenement, Plot No. 2276, Hill Drive, Bhavnagar, admeasuring 127.05 square metres (to be referred to hereafter as "the impugned property"). Such property of the petitioner was purchased as a residential property in the year 2010 from respondent No. 3-Jayshreeben Deepakbhai Magiya. The property was originally owned by Dr. Bhanu T. Parekh, which was purchased by one Shri Dhanjibhai Hirjibhai Tuvar on March 7, 1989 and thereafter, by Smt. Jayshree Deepak Magiya on June 29, 1995 by a registered sale deed. It is the case of the petitioner that before the purchase of the impugned property, title investigation was carried out in the name of the previous owner by the learned advocate who issued a certificate dated December 23, 1996 certifying to the State Bank of Saurashtra that the title of the previous owner was clear, marketable and free from any encumbrances. Such property was purchased by the petitioner on May 20, 2010 which was duly registered with respondent No. 2 vide document No. 2603 and the petitioner continued to enjoy the same peacefully.

1.1 It is the case of the petitioner that he entered into an agreement to sell with one Shri Kamlesh P. Shah on March 26, 2013 for the sale of such property. Such agreement to sell has been registered with respondent No. 2 on March 26, 2013. After the said process of entering into the agreement to sell with the proposed purchaser, when the petitioner approached respondent No. 2 for execution of the final sale deed, the same was refused by respondent No. 2 on the ground that a letter was received from respondent No. 1, inter alia, stating that one Shri Deepak Magiya, husband of respondent No. 3, (the previous owner of the impugned property) had not paid tax dues to respondent No. 1 arid therefore, no transfer of the said property could take place. Such objection of the Sales Tax Department led the petitioner to communicate with respondent No. 2, inter alia, urging to provide a copy of the letter/order of attachment of the said property. It was also communicated to respondent No. 1 that the petitioner is neither a dealer nor falling within the purview of any provisions of the Gujarat Value Added Tax Act, 2003 (to be referred to as "the VAT Act" hereafter) and therefore, no; order of attachment/prohibitory order on the impugned property can be passed for the dues of the husband of the erstwhile owner.

1.2 Being aggrieved, the petitioner approached this court by preferring a writ petition being Special Civil Application No. 14676 of 2013 challenging the action of respondent Nos. 1 and 2 in not allowing the transfer and registration of the sale deed with respect to the said property. In the meanwhile, the proposed purchaser was skeptical in respect of the outstanding liabilities of the alleged defaulter who was connected with the impugned property, being the husband of the erstwhile owner and therefore, such petition was withdrawn on October 8, 2013 seeking liberty to approach this court once again in case the cause for which the said petition was filed survives.

1.3 The proposed purchaser, thereafter, on being convinced, intended to get the sale deed executed in his favour, and therefore, the petitioner has approached this court seeking the following reliefs :

"7. The petitioner, therefore, prays that the honourable court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased to :

(a) direct respondent No. 1 to lift the order of attachment, if any, or withdraw any instructions for attaching the impugned property;

(b) direct respondent No. 2 to quantify the stamp duty to be paid by the petitioner, allow the transfer of the impugned property and register the sale deed transferring the title in the impugned property;

(c) any other and further relief deemed just and proper be granted in the interest of justice;

(d) to provide for the cost of this petition."

On issuance of the notice, respondent No. 1 appeared and filed an affidavit-in-reply contending, inter alia, that the impugned property is transferred by Shri Deepak Shantilal Magiya through his wife Jayshreeben Deepakkumar Magiya to the petitioner with an intention to defraud the Government revenue and that the said transaction is void under section 47 of the Gujarat Value Added Tax Act, 2003. It is contended that Shri Deepak Magiya opened the bank account in the name of Apna Enterprise citing its sales tax registration number. He was, in fact, not the real owner and the real owner was one Shri S.A. Saiyed. Shri Deepak Magiya was considered to be the king of billing business in Bhavnagar, who never got registered himself under the Gujarat Sales Tax Act or the Gujarat Value Added Tax Act. Shri Deepak Magiya used the registration numbers of other registered dealers as if they were his registration numbers, and his case was also referred to the local crime branch. Mr. Deepak Magiya was initially absconding and after he was arrested, he once again absconded on being released on regular bail by the court.

2.1 It is also the say of respondent No. 1 that for the years 2005-06, 2006-07 and 2007-08, the total demand of the Sales Tax Department is approximately Rs. 5 crores and odd. The impugned property was sold by Shri Magiya on May 20, 2010 and the order of provisional attachment on the bank account of Shri Magiya was passed on October 29, 2009 and since this property was purchased subsequently, recovery action even if has been pursuant to the earlier order, should be held valid. It is also the say of the respondents in the said affidavit-in-reply that the impugned transaction is void under section 47 of the Gujarat Value Added Tax Act. This provision provided for a deeming fiction by which a transfer in any mode or manner if attempted or made during pendency of proceedings or on completion thereof and before recovery is in fact made is void. No order is required to be passed under section 47 of the Act so as to declare such transfer to be void. Comparing the said provision with the provision of section 281 of the Income-tax Act, it has been further contended that the decision of the Calcutta High Court in the case of The Tax Recovery Officer II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade (Dead) Through Mrs. Shobha Ravindra Nemiwant, would be applicable in this case.

We have extensively heard the learned counsel Mr. Tushar Hemani for the petitioner and learned Assistant Government Pleader Mr. Jaimin Gandhi for the State. Before adverting to the facts of the instant case, law on the subject deserves discussion.

Any transfer attempted or made to defeat/defraud the Revenue''s interest is deemed void in the Statute. It would be profitable to reproduce section 47 and section 48 of the VAT Act at this stage.

"47. Transfer to defraud revenue void.-Where a dealer after any tax has become due from him creates a charge on or parts with the possession by way of sale, mortgage, exchange or any other mode of transfer whatsoever of any of his property in favour of any other person with the intention of defrauding the'' Government revenue, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the dealer.

Tax to be first charge on property.-Notwithstanding anything to the contrary contained in any law for the time being in force, any amount payable by a dealer or any other person on account of tax, interest or penalty for which he is liable to pay to the Government shall be a first charge on the property of such dealer, or as the case may be, such person."

Thus, section 47 of the Act is concerned with a dealer who creates a charge on or parts with the possession by way of sale, mortgage, exchange or any other mode of transfer, after any tax becomes due from him, and when he so does in favour of any other person with the intention of defrauding the Government revenue, this provision states that such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the dealer.

Section 48 of the Act creates first charge on the property of the dealer or any other person from whom tax is due.

It is to be noted at this juncture that section 47 of the GVAT Act is similarly worded to section 281 of the Income-tax Act, 1961 and therefore, some of the decisions in relation to the provision of section 281 of the Income-tax Act which hold the field deserve consideration at this stage.

The Supreme Court in the case of The Tax Recovery Officer II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade (Dead) Through Mrs. Shobha Ravindra Nemiwant, , discussed at length section 281 of the Income-tax Act, 1961, which declares as void any transfer made by the assessee during the pendency of proceedings with an intention to defraud the Revenue. The court held that, "The Tax Recovery Officer, therefore, has to examine who is in possession of the property and in what capacity. He can only attach property in the possession of the assessee in his own right, or in possession of a tenant or a third party on behalf of/for the benefit of the assessee. He cannot declare any transfer made by the assessee in favour of a third party void. If the Department finds that a property of the assessee is transferred by him to a third party with the intention to defraud the Revenue, it will have to file a suit under rule 11(6) to have the transfer declared void under section 281". The court further observed that the provisions of rule 11 of the Income-tax Rules are analogous to rules 58 to 61 and 63 of Order 21 of the Code of Civil Procedure, 1908. It is emphatically laid down that such procedure is not meant to decide intricate questions of law as to title to the property. Therefore, where a claim is made to the property attached, by someone claiming to be a transferee from the judgement-debtor and the claim is disallowed, the claimant can institute a suit under Order 21, rule 63, to establish his title to the property.

Relevant also would be to refer to rules 2, 6 and 11 of Part I, Schedule II of the Income-tax Act, which speak of the procedure for recovery of tax.

"2. Issue of notice.-When a certificate has been drawn up by the Tax Recovery Officer for the recovery of arrears under this Schedule, the Tax Recovery Officer shall cause to be served upon the defaulter a notice requiring the defaulter to pay the amount specified in the certificate within fifteen days from the date of service of the notice and intimating that in default steps would be taken to realise the amount under this Schedule.

....

Purchaser''s title.-(1) Where property is sold in execution of a certificate, there shall vest in the purchaser merely the right, title and interest of the defaulter at the time of the sale, even though the property itself be specified.''

(2) Where immovable property is sold in execution of a certificate, and such sale has become absolute, the purchaser''s right, title and interest shall be deemed to have vested in him from the time when the property is sold, and not from the time when the sale becomes absolute.

Investigation by Tax Recovery Officer-(1) Where any claim is preferred to, or any objection is made to the attachment or sale of, any property in execution of a certificate, on the ground that such property is not liable to such attachment or sale, the Tax Recovery Officer shall proceed'' to investigate the claim or objection :

Provided that no such investigation shall be made where the Tax Recovery Officer considers that the claim or objection was designedly of unnecessarily'' delayed.

(2) Where the property to which the claim or objection applies has been advertise for sale, the Tax Recovery Officer ordering the sale may postpone it pending the investigation of the claim or objection, upon such terms as to security or otherwise as the Tax Recovery Officer shall deem fit.

(3) The claimant or objector must adduce evidence to show that-

(a) (in the case of immovable property) at the date of the service of the notice issued under this Schedule to pay the arrears, or

(b) (in the case of movable property) at the date of the attachment,

he had some interest in, or was possessed of, the property in question.

(4) Where, upon the said investigation, the Tax Recovery Officer is satisfied that, for the reason stated in the claim or objection, such property was not; at the said date, in the possession of the defaulter or of some person in trust for him or in the occupancy of a tenant or other person paying rent to him, or that, being in the possession of the defaulter at the said date, it was so in his possession, not on his own account or as his own property, but on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the Tax Recovery Officer shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or sale.

(5) Where the Tax Recovery Officer is satisfied that the property was, at the said date, in the possession of the defaulter as his own property and not on account of any other person, or was in the possession of some other person in trust for him, or in the occupancy of a tenant or other person paying rent to him, the Tax Recovery Officer shall disallow the claim.

(6) Where a claim or an objection is preferred, the party against whom an order is made may institute a suit in a civil court to establish the right which he claims to the property in dispute; but, subject to the result of such suit (if any), the order of the Tax Recovery Officer shall be conclusive."

Reference is also needed to be made at this stage that section 293 of the Income-tax Act bars the suit in civil courts. For either setting aside or modifying any order made under the Income-tax Act, neither any suit is permissible in any civil court, nor prosecution or any proceeding would lie against the Government or any officer for anything in good faith done or intended to be done under the Act. However, an exception is carved out under sub-rule (6) of rule 11 which permits institution of the suit in a civil court to establish the right by the party against whom an order is made in respect of the property in dispute and subject to the result of such suit, the order made by the Tax Recovery Officer shall be conclusive. There is of course no corresponding provision under the Gujarat Value Added Tax Act.

Submissions of learned advocate Mr. Hemani, inter alia, that because of explicit provisions made under Schedule II and in particular, sub-rule (6) of rule 11 of the Income-tax Act, the civil suit would be permissible and not otherwise, cannot be accepted.

9.1 It is true that there is no explicit provision made under the GVAT Act as is provided under the Second Schedule of the Income-tax Act, however, it is a well-settled law that in the event of any dispute in relation to the title of any property, it is the civil court which shall have a jurisdiction. This has also been emphatically held and observed by the apex court in The Tax Recovery Officer II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade (Dead) Through Mrs. Shobha Ravindra Nemiwant, and followed by this court in the case of Karsanbhai Gandabhai Patel Vs. Tax Recovery Officer, rendered on February 12, 2014 in Special Civil Application No. 2894 of 2004 and therefore, there is no reason why the same would have no applicability in the instant case. This court in the case of Karsanbhai Gandabhai Patel Vs. Tax Recovery Officer, in Special Civil Application No. 2894 of 2004 had an occasion to deal with section 281 of the Income-tax Act and relying on the judgment of the apex court in The Tax Recovery Officer II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade (Dead) Through Mrs. Shobha Ravindra Nemiwant, , struck down the order of attachment, by observing thus (pages 377-380 in 362 ITR) :

"Section 281 of the Act provides certain transfers to be void. Subsection (1) thereof, which is relevant for our purpose, reads as under :

''281. (1) Where, during the pendency of any proceeding under this Act or after the completion thereof, but before the service of notice under rule 2 of the Second Schedule, any assessee creates a charge on, or parts with the possession (by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever) of any of his assets in favour of any other person, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the assessee as a result of the completion of the said proceeding or otherwise :

Provided that such charge or transfer shall not be void if it is made-

(i) for adequate consideration and without notice of the pendency of such proceeding or, as the case may be, without notice of such tax or other sum payable by the assessee; or

(ii) with the previous permission of the Assessing Officer.''

Sub-section (1) of section 281 thus provides that where during the pendency of any proceedings under the Act, or after the completion thereof, but before the service of notice under rule 2 of the Second Schedule, any assessee creates a charge on, or parts with the possession by way of sale, mortgage, gift/exchange or any other mode of transfer any assets in favour of any other person, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the assessee as a result of completion of the said proceedings or otherwise.

The proviso to sub-section (1), however, provides that such charge or transfer shall not be void if made for adequate consideration and without notice of pendency of such proceedings or without notice of such tax or other sum payable by the assessee or with the permission of the assessing officer.

It can thus be seen that even if the transactions creating a charge or parting of possession has been entered into by the assessee during the pendency of any proceedings under the Act or after completion thereof, the eventuality of such charge or transfer being declared void can be avoided provided one of the two conditions contained in the proviso is satisfied. Under such circumstances, the transferee can demonstrate that the transaction had taken place with the previous permission of the assessing officer or that the same was entered into for adequate consideration and without notice of pendency of such proceedings or without notice of such tax or other sum payable by the assessee.

This element of the transaction being with adequate consideration and without notice would equally apply to the assessee as well as the transferee. In a given case, it may even be open for the assessee to establish that the transaction was for adequate consideration without notice. In a given case, even if the assessee had notice of the pendency or the outstanding tax or sum payable, the transferee can still take shelter of the transactions having been entered into by him for adequate consideration and without notice. It is, therefore, that the courts have read into this provision the requirement of hearing the transferee also. Quite apart from this, as would be clear from the discussion hereinafter, courts have taken a view that sub-section (1) of section 281 of the Act only provides for the eventuality of , the transaction hit by the said provisions as being void. It does not create any machinery for the Revenue, authorities to entertain dispute and declare the transaction to be void for which purpose, only a civil suit would lie.

In the case of Gangadhar Vishwanath Ranade (No. 2) and another Vs. Tax Recovery Officer, ; a Division Bench of the Bombay High Court held that under section 281 of the Act, the Tax Recovery Officer has no power to declare a transfer as void. This decision of the Bombay High Court was carried in appeal before the Supreme Court. The apex court in The Tax Recovery Officer II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade (Dead) Through Mrs. Shobha Ravindra Nemiwant, confirmed the view of the Bombay High Court and held and observed as under (page 195 in 234 ITR):

''In the light of this discussion about the provisions of Order XXI, Rules 58 to 63, if we examine rule 11(4) of the Second Schedule to the Income-tax Act, it is clear that the Tax Recovery Officer is required to examine whether the possession of the third party is of a claimant in his own right or in trust for the assessee or on account of the assessee. If he comes to a conclusion that the transferee is in possession in his or her own right, he will have to raise the attachment. If the Department desires to have the transaction of transfer declared void under section 281, the Department being in the position of a creditor, will have to file a suit for a declaration that the transaction of transfer is void under section 281 of the Income-tax Act.''

Later on, once again, the issue came up for consideration before a Division Bench of the Bombay High Court in the case of Ms. Ruchi Mehta and Others Vs. Union of India (UOI) and Others, . The Bombay High Court followed the decision of the Supreme Court in the case of The Tax Recovery Officer II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade (Dead) Through Mrs. Shobha Ravindra Nemiwant, and held that the action of the Tax Recovery Officer in declaring the transfer of property to be void was without jurisdiction. The court also held that the impugned order attaches civil consequences. The authority, therefore, before passing such order ought to have given an opportunity to the petitioners of being heard. This was not done. This was an additional ground on which, the order was struck down.

In the case of Sancheti Leasing Company Ltd. and Another Vs. Income Tax Officer and Another, ; 2000) 158 CTR 190 (Mad), learned single judge of the Madras High Court following the decision of the Supreme Court in the case of The Tax Recovery Officer II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade (Dead) Through Mrs. Shobha Ravindra Nemiwant, held that the Income-tax Officer had no jurisdiction to declare the transaction of sale to the petitioners as void.

The decisions cited by the counsel for the Revenue arose in different factual background. In the case of Abdul Jamil and 5 others Vs. The Secretary, Income Tax Department, New Delhi and 2 others, the issue arose out of civil proceedings in which the court found that the vendor had sold the property to the first plaintiff after the issuance of certificate under the Act for recovery of the tax arrears from him. The court, therefore, held that the transaction was hit by the provisions of section 281 as well as rule 16(1) of the Rules.

The case of Palani Gounder (Decd.) and others Vs. Income Tax Revenue Department and others, , also arose in different factual background. It was a case in which the plaintiff had filed suit for declaration that their purchase of the suit property was for a valid consideration and it was a duly registered sale deed and was, therefore, not void. The Income-tax Officer had proposed to proceed under section 281 of the Act. The civil court in the suit filed by the plaintiffs found that the transaction was in breach of section 281 of the Act and, therefore, refused to grant the prayer. It was under such circumstances that the appeal was heard by the learned single judge of the Madras High Court and dismissed the same.

The issue is squarely covered by the decision of the Supreme Court in the case of The Tax Recovery Officer II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade (Dead) Through Mrs. Shobha Ravindra Nemiwant, . We have, therefore, no hesitation in striking down the order dated 8th November, 1995, qua the present petitioners. Rule is made absolute accordingly."

Reference is needed at this juncture to the provisions of sections 45 and 47 of the GVAT Act. Section 45 of the Act requires the satisfaction of the Commissioner-(1) that the person should be a dealer under the Act, (2) it also requires the pendency of any proceedings of assessment or reassessment and turnover escaping assessment in respect of such dealer and (3) subjective satisfaction of the Commissioner is required for the purpose of protecting the interest of the Government revenue. As section 47 of the Act also requires a charge to be created in case of a demand being outstanding of a dealer, any sale, mortgage, exchange or any other mode of transfer, etc., is treated void as against any claim in respect of any tax or any other sum payable by the dealer. Neither the petitioner nor Smt. Magiya being the dealer, none of these provisions gets attracted. In other words, when the petitioner or the person from whom the petitioner has purchased the property is not the "dealer" as defined under the GVAT Act, the applicability of sections 43 and 47 of the Act would itself is a debatable question in the instant case. The only import to this provision is because of the submission to the effect that the transferor Smt. Jayshreeben Magiya being a benamidar and the property actually having been purchased by Deepak Magiya with a sole intention to defeat Revenue''s interest, require some consideration at this stage.

The Benami Transactions (Prohibition) Act, 1988 prohibits all benami transactions and also provides for the right to recover property held benami. Section 3 thereof provides that no person shall enter into any benami transaction. However, it further provides that nothing in sub-section (1) shall apply to the purchase of property by any person in the name of his wife or unmarried daughter and it shall be presumed, unless the contrary is proved, that the said property had been purchased for the benefit of the wife or the unmarried daughter. This provision thus avails protection in the event of any purchase of property in the name of the wife or the unmarried daughter, where presumption has also been provided by the law in favour of the person and unless contrary is established, it is to be presumed that such property has been purchased for the benefit of wife and unmarried daughter.

10.1 Some of the references of judicial pronouncements on the very issue would be desirable at this juncture.

"(a) The Supreme Court in the case of Canbank Financial Services Ltd. Vs. The Custodian and Others, ; AIR 2004 SC 5123, held thus (pages 283 to 286 in 122 Comp Cas) :

"50. A civilized society furthermore always provides for remedies for cases of what has been called unjust enrichment or unjust benefit derived from another which it is against conscience that he should keep. (See Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd. [1942] 2 All ER 122 (HL). In Carreras Rothmans Ltd. v. Freeman Mathews Treasure Ltd. [1985] 1 Ch. 207 at page 222, it is stated :

''... equity fastens on the conscience of the person who receives from another property transferred for a specific purpose only and not therefore for the recipient''s own purposes, so that such person will not be permitted to treat the property as his own or to use it for other than the stated purpose.''

...

''Benami transaction'' has been defined in section 2(a) of the Benami Transactions Act to mean any transaction in which property is transferred to one person for a consideration paid or provided by another person. Transfer'' of property, therefore, is sine qua non for attracting the said definition.

...

The Benami Transaction Act is not a piece of declaratory or curative legislation. It creates substantive rights in favour of benamidars and destroys substantive rights of real owners who are parties to such transactions and for whom new liabilities are created by the Act. A statute which takes away the rights of a party must be strictly construed. (See R. Rajagopal Reddy (dead) by L.Rs. and others Vs. Padmini Chandrasekharan (dead) by L.Rs., ."

(b) This court while dealing with issue of benami transactions in the case of Heirs of Vrajlal J. Heirs of Vrajlal J. Ganatra and Others Vs. Heirs of Parshottam S. Shah and Others, , held and observed thus :

"16. The Supreme Court had an occasion to deal with benami transaction in the case of Thakur Bhim Singh (Dead) by Lrs and Another Vs. Thakur Kan Singh, . It is held that the question whether a transaction is a benami transaction or not mainly depends on the intention of a person who contributed the purchase money or executed the conveyance and it is further observed that when a person buys a property of his own money, but in the name of another person without any intention to benefit another person, then the transaction is benami and the Supreme Court laid down the following principle at page 734 :

''The principle governing the determination of the question whether a transfer is a benami transaction or not may be summed up thus : (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that it is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money; and (4) the question as to what his intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motives governing their action in bringing about the transaction and their subsequent conduct, etc.''

The burden is on the plaintiff to prove that the transaction is benami. In the present case, even though the consideration money came from the plaintiff, the entire consideration to the plaintiff was provided by the defendant. It is true that the said amount was advanced by the defendant to the plaintiff oh interest and the defendant could have the money claim against the plaintiff, but the fact remains that the entire amount of consideration came from the defendant to the plaintiff and was paid to the vendor by the plaintiff and the sale deed was executed in the name of the defendant. This is not a case where the consideration has come from the real owner and the said benami owner has no connection whatsoever with the transaction. As observed by the Supreme Court, the true character of the transaction is governed by the intention of the person who contributed the purchase money. In the present case, it cannot be said that the defendant had not contributed for the purchase money. In any case, even the intention of the plaintiff cannot be said to be that of the real owner while purchasing the property in the name of the defendant who had substantially invested his money. The facts and circumstances and the relations between the parties clearly show that the arrangement was that the defendant in whose name the sale deed was executed was intended, to be the owner of the land and the plaintiff was given right or option to have the land reconveyed. It is true that the defendant was interested in his money and securing repayment of his money, but the security and the repayment of money can be provided in numerous ways; it could be provided by way of mortgage, charge or it could be provided by arrangement of hire-purchase or in any number of ways. In the hire-purchase agreement of a house, a flat, a truck or a motor vehicle, the financier is interested in securing the, payment of his dues. However, till the full payment is made, the hirer remains the hirer and does, not become the owner. Similarly, the parties had devised a method that the defendant who had advanced the entire amount of consideration should have the registered sale deed executed in his. favour as the real owner and that on repayment of the amount of consideration by the plaintiff, the defendant would re-execute the conveyance. The very requirement of this re-execution shows that the defendant was intended to be the real owner."

(c) The Supreme Court in the case of Thakur Bhim Singh (Dead) by Lrs and Another Vs. Thakur Kan Singh, , has dealt with the subject to observe and hold thus :

"18. The principle governing the determination of the question whether a transfer is a benami transaction or not may be summed up thus : (1) The burden of showing that a transfer is a benami transaction lies on the person who asserts that at is such a transaction; (2) if it is proved that the purchase money came from a person other than the person in whose favour the property is transferred, the purchase is prima facie assumed to be for the benefit of the person who supplied the purchase money, unless there is evidence to the contrary; (3) the true character of the transaction is governed by the intention of the person who has contributed the purchase money; and (4) the question as to what his intention was has to be decided on the basis of the surrounding circumstances, the relationship of the parties, the motives governing their action in bringing about the transaction and their subsequent conduct, etc."

The expression "benami'''' denotes the transaction for the benefit not of the person taking part in the transaction, but of the person/persons not mentioned in the transaction. Transferring the property is inevitable for attracting the said transaction. For any transfer to be termed as Benami, the person who so asserts need to prove that the consideration is paid by the person other than the one in whose name property is purchased and the true character of intention also can be gathered from surrounding circumstances. Law since does not allow application of provision of section 3 of the Benami Act where purchase is made in the name of wife and unmarried daughter, burden surely requires to be discharged by the person who asserts that the transaction is Benami.

As reflected hereinabove, it is to be noted at this juncture that the State has fervently contended, inter alia, that the transaction of purchase of property in the name of Smt. Jayshreeben Magiya by her husband Deepak Magiya who is alleged to have defaulted, being called "King of bogus purchases" was only with a view to avoid the tax liability and to defraud the revenue. It is also further contended that Smt. Jayshreeben Magiya, being the house-wife, would have no money to purchase the impugned property. We notice that the suit property is a tenement, admeasuring 127.05 square metres, situated at Bhavnagar. The purchase was made by Mrs. Magiya on June 29, 1995 by a registered sale deed. We notice that tax dues of Mr. Deepak Magiya have been finalised somewhere in the month of October, 2009. It will not be out of context to make a reference of severe matrimonial disputes between the parties and the factum of pendency of a petition before the Family Court, Mumbai, filed in October, 2011. The disputes continued from May, 2007 and they started residing separately. The petition culminated into dissolution of the marriage on December 31, 2012 as per the rejoinder affidavit and a copy of such decision has also come on record. The custody of both the children has been given to the wife. In the said background, such contention of the State is wholly unacceptable and unsustainable that to defraud the State''s revenue benami transaction is made.

12.(a) The contention raised by the respondents that Mrs. Jayshreeben Magiya would have no funds of her own, is also not acceptable as she also possibly can have her "Stridhan" or can own property inherited from her father. Moreover, the very provision of section 3 of the Benami Transactions Act makes it obligatory on the part of the person to prove otherwise when such property is purchased in the name of the wife as legal presumption favours the wife and unmarried daughter.

12.(b) However, such presumption can be rebutted by the person who alleges by production of evidence or other material before the court, that the property was purchased for the benefit and interest of the person other than the wife and the unmarried daughter. In other words, unless the presumption gets rebutted by successfully producing cogent evidence that the suit property was purchased benami by the husband/father for his own benefit, such presumption would continue.

12.(c) Moreover, the property had been transferred in the name of the present petitioner by way of a registered sale deed on payment of due consideration and, this was done in absence of any charge, registered with the office of the Sub-Registrar in respect of the said property. Therefore also, prima facie, it shall have to be termed as the bona fide purchase of the immovable property for value without notice.

13.(a) The learned Assistant Government Pleader has made an earnest request not to conclude this issue as the respondent-State is desirous to move the civil court to get the question of title of the property decided on the line of the decision of the apex court in the case of The Tax Recovery Officer II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade (Dead) Through Mrs. Shobha Ravindra Nemiwant, . In absence of any explicit provision under the GVAT Act and in the wake of the fact that the outstanding dues of Mr. Deepak Magiya, nearly to the tune of Rs. 5 crores, having been finalized somewhere in the year 2009 for the assessment years 2005-06, 2006-07 and 2007-08. We, prima facie, are of the opinion that serious question of limitation also would stare in the face of the respondent. However, we choose not to conclude the maintainability of the suit.

13.(b) Mr. Hemani has fervently objected to this by submitting that the availability of the civil suit in case of the Income-tax Act is on account of the provision explicitly made in Schedule II to rule 11(6). However, in absence of such explicit provision under the GVAT Act, even if both the provisions are somewhat similarly worded, such liberty may not be made available to the respondents.

On considering rival versions, we choose not to adjudicate on disputed questions of title which shall have to be necessarily decided by the court of law in the civil suit rather than concluding on this aspect in the present petition. At this stage, we may allow the respondents to take recourse if permissible under law and for both the parties to argue all these aspects at an appropriate stage before appropriate forum.

Thus, the question in relation to the title of the property, so also the issues of benami transactions of the said property and the question concerning law of limitation in preferring such suit, acceding to the request of learned AGP,'' we leave all these issues open for the parties to raise and contest at an appropriate stage before the appropriate forum.

In the result, the petition is allowed, by quashing the direction issued by respondent No. 1 to respondent No. 2 for the attachment of the impugned property. Respondent No. 2 is also further directed to permit the execution of the sale deed in favour of the proposed purchaser.

Needless to state that the respondents, if are desirous to get the title of the property decided, they can resort to the remedy of preferring civil suit as provided by the apex court in the case of The Tax Recovery Officer II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade (Dead) Through Mrs. Shobha Ravindra Nemiwant, . The concerned court shall decide all the questions, including the question of limitation as may be raised before it, without being influenced by any of the observations made by this court while deciding the present petition. Rule is made absolute accordingly, with no order as to costs.