THE SECOND SCHEDULE
PROCEDURE FOR RECOVERY OF TAX
74[[See sections 222 and 276]]
PART I
GENERAL
PROVISIONS
Definitions.
1. In this Schedule, unless the context otherwise
requires,
75[(a) certificate, except in rules 7, 44, 65 and
sub-rule (2) of rule 66, means the certificate drawn up by the Tax Recovery
Officer under section 222 in respect of any
assessee referred to in that section;]
(b) defaulter means the assessee mentioned in
the certificate;
(c) execution, in relation to a certificate,
means recovery of arrears in pursuance of the certificate;
(d) movable property includes growing crops;
(e) officer means a person authorised to make
an attachment or sale under this Schedule;
(f) rule means a rule contained in this
Schedule; and
(g) share in a corporation includes stock,
debenture-stock, debentures or bonds.
Issue of notice.
2. 76[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.
When certificate may be executed.
3. No step in execution of a certificate shall be
taken until the period of fifteen days has elapsed since the date of the
service of the notice required by the preceding rule :
Provided that, if the Tax Recovery Officer is satisfied
that the defaulter is likely to conceal, remove or dispose of the whole or any
part of such of his movable property as would be liable to attachment in execution
of a decree of a civil court and that the realisation of the amount of the
certificate would in consequence be delayed or obstructed, he may at any time
direct, for reasons to be recorded in writing, an attachment of the whole or
any part of such property:
Provided further that if the defaulter
whose property has been so attached furnishes security to the satisfaction of
the Tax Recovery Officer, such attachment shall be cancelled from the date on
which such security is accepted by the Tax Recovery Officer.
Mode of recovery.
4. If the amount mentioned in the notice is not
paid within the time specified therein or within such further time as the Tax
Recovery Officer may grant in his discretion, the Tax Recovery Officer shall
proceed to realise the amount by one or more of the following modes :
(a) by attachment and sale of the defaulters
movable property;
(b) by attachment and sale of the defaulters
immovable property;
(c) by arrest of the defaulter and his detention
in prison;
(d) by appointing a receiver for the management
of the defaulters movable and immovable properties.
Interest, costs and charges recoverable.
5. There shall be recoverable, in the proceedings
in execution of every certificate,
(a) such interest upon the amount of tax or
penalty or other sum to which the certificate relates as is payable in
accordance with sub-section (2) of section 220,
and
(b) all charges incurred in respect of
(i) the service of notice upon the defaulter to
pay the arrears, and of warrants and other processes, and
(ii) all other proceedings taken for realising the
arrears.
Purchasers title.
6. (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 purchasers 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.
Suit against purchaser not maintainable on ground of
purchase being made on behalf of plaintiff.
7. (1) No suit shall be maintained against any
person claiming title under a purchase certified by the Tax Recovery Officer in
the manner laid down in this Schedule, on the ground that the purchase was made
on behalf of the plaintiff or on behalf of some one through whom the plaintiff
claims.
(2) Nothing in this section shall bar a suit to obtain
a declaration that the name of any purchaser certified as aforesaid was
inserted in the certificate fraudulently or without the consent of the real
purchaser, or interfere with the right of a third person to proceed against
that property, though ostensibly sold to the certified purchaser, on the ground
that it is liable to satisfy a claim of such third person against the real
owner.
77[Disposal
of proceeds of execution.
8. (1) Whenever assets are realised by sale or
otherwise in execution of a certificate, the proceeds shall be disposed of in
the following manner, namely :
(a) they shall first be adjusted towards the amount due under the certificate
in execution of which the assets were realised and the costs incurred in the
course of such execution;
(b) if there remains a balance after the adjustment referred to in
clause (a), the same shall be utilised for satisfaction of any other
amount recoverable from the assessee under this Act which may be due on the
date on which the assets were realised; and
(c) the balance, if any, remaining after the adjustments under clauses
(a) and (b) shall be paid to the defaulter.
(2)
If the defaulter disputes any adjustment under clause (b) of sub-rule
(1), the Tax Recovery Officer shall determine the dispute.]
General bar to jurisdiction of civil courts, save where fraud alleged.
9. Except as otherwise expressly provided in this Act,
every question arising between the 78[Tax Recovery] Officer
and the defaulter or their representatives, relating to the execution,
discharge or satisfaction of a certificate 79[***], or relating to
the confirmation or setting aside by an order under this Act of a sale held in
execution of such certificate, shall be determined, not by suit, but by order
of the Tax Recovery Officer before whom such question arises :
Provided that a suit may be brought in a civil court in
respect of any such question upon the ground of fraud.
Property exempt from attachment.
10. (1) All such property as is by the Code of Civil
Procedure, 1908 (5 of 1908), exempted from attachment and sale in execution of
a decree of a civil court shall be exempt from attachment and sale under this
Schedule.
(2)
The Tax Recovery Officers decision as to what property is so entitled to
exemption shall be conclusive.
Investigation by Tax Recovery Officer.
11. (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 or
unnecessarily delayed.
(2)
Where the property to which the claim or objection applies has been advertised
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 possessed80 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.
Removal of attachment on satisfaction or cancellation
of certificate.
12. Where
(a) the amount due, with costs and all charges and expenses resulting
from the attachment of any property or incurred in order to hold a sale, are
paid to the Tax Recovery Officer, or
(b) the certificate is cancelled,
the
attachment shall be deemed to be withdrawn and, in the case of immovable
property, the withdrawal shall, if the defaulter so desires, be proclaimed at
his expense, and a copy of the proclamation shall be affixed in the manner
provided by this Schedule for a proclamation of sale of immovable property.
Officer entitled to attach and sell.
13. The attachment and sale of movable property and the
attachment and sale of immovable property may be made by such persons as the
Tax Recovery Officer may from time to time direct.
Defaulting purchaser answerable for loss on resale.
14. Any deficiency of price which may happen on a resale
by reason of the purchasers default, and all expenses attending such resale,
shall be certified to the Tax Recovery Officer by the officer holding the sale,
and shall, at the instance of either the 81[Tax Recovery] Officer
or the defaulter, be recoverable from the defaulting purchaser under the
procedure provided by this Schedule:
Provided that no such application shall be entertained unless
filed within fifteen days from the date of resale.
Adjournment or stoppage of sale.
15. (1) The Tax Recovery Officer may, in his discretion,
adjourn any sale hereunder to a specified day and hour; and the officer
conducting any such sale may, in his discretion, adjourn the sale, recording
his reasons for such adjournment :
Provided that, where the sale is made in, or within the
precincts of, the office of the Tax Recovery Officer, no such adjournment shall
be made without the leave of the Tax Recovery Officer.
(2)
Where a sale of immovable property is adjourned under sub-rule (1) for a longer
period than one calendar month, a fresh proclamation of sale under this
Schedule shall be made unless the defaulter consents to waive it.
(3)
Every sale shall be stopped if, before the lot is knocked down, the arrears and
costs (including the costs of the sale) are tendered to the officer conducting
the sale, or proof is given to his satisfaction that the amount of such arrears
and costs has been paid to the Tax Recovery Officer who ordered the sale.
Private alienation to be void in certain cases.
16. (1) Where a notice has been served on a defaulter
under rule 2, the defaulter or his representative in interest shall not be
competent to mortgage, charge, lease or otherwise deal with any property82 belonging to him
except with the permission of the Tax Recovery Officer, nor shall any civil
court issue any process against such property in execution of a decree for the
payment of money.
(2)
Where an attachment has been made under this Schedule, any private transfer or
delivery of the property attached or of any interest therein and any payment to
the defaulter of any debt, dividend or other moneys contrary to such
attachment, shall be void as against all claims enforceable under the
attachment.
Prohibition against bidding or purchase by officer.
17. No officer or other person having any duty to perform
in connection with any sale under this Schedule shall, either directly or
indirectly, bid for, acquire or attempt to acquire any interest in the property
sold.
Prohibition against sale on holidays.
18. No sale under this Schedule shall take place on a
Sunday or other general holiday recognised by the State Government or on any
day which has been notified by the State Government to be a local holiday for
the area in which the sale is to take place.
Assistance by police.
19. Any officer authorised to attach or sell any property
or to arrest the defaulter or charged with any duty to be performed under this
Schedule, may apply to the officer-in-charge of the nearest police station for
such assistance as may be necessary in the discharge of his duties, and the
authority to whom such application is made shall depute a sufficient number of
police officers for furnishing such assistance.
83[Entrustment of
certain functions by Tax Recovery Officer.
19A. A Tax Recovery Officer may, with the previous
approval of the 84[Joint]
Commissioner, entrust any of his functions as the Tax Recovery Officer to any
other officer lower than him in rank (not being lower in rank than an Inspector
of Income-tax) and such officer shall, in relation to the functions so
entrusted to him, be deemed to be a Tax Recovery Officer.]
PART II
ATTACHMENT AND SAlE
OF MOVABLE PROPERTY
Attachment
Warrant.
20. Except as otherwise provided in this Schedule, when
any movable property is to be attached, the officer shall be furnished by the
Tax Recovery Officer (or other officer empowered by him in that behalf) a
warrant in writing and signed with his name specifying the name of the
defaulter and the amount to be realised.
Service of copy of warrant.
21. The officer shall cause a copy of the warrant to be
served on the defaulter.
Attachment.
22. If, after service of the copy of the warrant, the
amount is not paid forthwith, the officer shall proceed to attach the movable
property of the defaulter.
Property in defaulters possession.
23. Where the property to be attached is movable property
(other than agricultural produce) in the possession of the defaulter, the attachment
shall be made by actual seizure, and the officer shall keep the property in his
own custody or the custody of one of his subordinates and shall be responsible
for due custody thereof:
Provided that when the property seized is subject to speedy
and natural decay or when the expense of keeping it in custody is likely to
exceed its value, the officer may sell it at once.
Agricultural produce.
24. Where the property to be attached is agricultural
produce the attachment shall be made by affixing a copy of the warrant of
attachment
(a) where such produce is growing crop,on the land on which such crop
has grown, or
(b) where such produce has been cut or gathered,on the threshing
floor or place for treading out grain or the like, or fodder-stack, on or in
which it is deposited,
and
another copy on the outer door or on some other conspicuous part of the house
in which the defaulter ordinarily resides, or with the leave of the Tax
Recovery Officer, on the outer door or on some other conspicuous part of the
house in which he carries on business or personally works for gain, or in which
he is known to have last resided or carried on business or personally worked
for gain. The produce shall, thereupon, be deemed to have passed into the
possession of the Tax Recovery Officer.
Provisions as to agricultural produce under attachment.
25. (1) Where agricultural produce is attached, the Tax
Recovery Officer shall make such arrangements for the custody, watching,
tending, cutting and gathering thereof as he may deem sufficient; 85[and he shall have
power to defray the cost of such arrangements].
(2)
Subject to such conditions as may be imposed by the Tax Recovery Officer in
this behalf, either in the order of attachment or in any subsequent order, the
defaulter may tend, cut, gather and store the produce and do any other act
necessary for maturing or preserving it; and, if the defaulter fails to do all
or any of such acts, any person appointed by the Tax Recovery Officer in this
behalf may, subject to the like conditions, do all or any of such acts, and the
costs incurred by such person shall be recoverable from the defaulter as if
they were included in the certificate.
(3)
Agricultural produce attached as a growing crop shall not be deemed to have
ceased to be under attachment or to require reattachment merely because it has
been severed from the soil.
(4)
Where an order for the attachment of a growing crop has been made at a
considerable time before the crop is likely to be fit to be cut or gathered,
the Tax Recovery Officer may suspend the execution of the order for such time
as he thinks fit, and may, in his discretion, make a further order prohibiting
the removal of the crop pending the execution of the order of attachment.
(5)
A growing crop which from its nature does not admit of being stored shall not
be attached under this rule at any time less than twenty days before the time
at which it is likely to be fit to be cut or gathered.
Debts and shares, etc.
26. (1) In the case of
(a) a debt not secured by a negotiable instrument,
(b) a share in a corporation, or
(c) other movable property not in the possession of the defaulter
except property deposited in, or in the custody of, any court,
the
attachment shall be made by a written order prohibiting,
(i) in the case of the debtthe creditor from recovering the debt and
the debtor from making payment thereof until the further order of the Tax
Recovery Officer;
(ii) in the case of the sharethe person in whose name the share may be
standing from transferring the same or receiving any dividend thereon;
(iii) in the case of the other movable property (except as
aforesaid)the person in possession of the same from giving it over to the
defaulter.
(2)
A copy of such order shall be affixed on some conspicuous part of the office of
the Tax Recovery Officer, and another copy shall be sent, in the case of the
debt, to the debtor, in the case of the share, to the proper officer of the
corporation, and in the case of the other movable property (except as
aforesaid), to the person in possession of the same.
(3)
A debtor prohibited under clause (i) of sub-rule (1) may pay the amount
of his debt to the Tax Recovery Officer, and such payment shall discharge him
as effectually as payment to the party entitled to receive the same.
Attachment of decree.
27. (1) The attachment of a decree of a civil court for
the payment of money or for sale in enforcement of a mortgage or charge shall
be made by the issue to the civil court of a notice requesting the civil court
to stay the execution of the decree unless and until
(i) the Tax Recovery Officer cancels the notice, or
(ii) the 86[Tax
Recovery] Officer or the defaulter applies to the court receiving such notice
to execute the decree.
(2)
Where a civil court receives an application under clause (ii) of
sub-rule (1), it shall, on the application of the 86[Tax Recovery] Officer
or the defaulter and subject to the provisions of the Code of Civil Procedure,
1908 (5 of 1908), proceed to execute the attached decree and apply the net
proceeds in satisfaction of the certificate.
(3)
The 86[Tax Recovery] Officer
shall be deemed to be the representative of the holder of the attached decree,
and to be entitled to execute such attached decree in any manner lawful for the
holder thereof.
Share in movable property.
28. Where the property to be attached consists of the
share or interest of the defaulter in movable property belonging to him and
another as co-owners, the attachment shall be made by a notice to the defaulter
prohibiting him from transferring the share or interest or charging it in any
way.
Salary of Government servants.
29. Attachment of the salary or allowances of servants of
the Government or a local authority may be made in the manner provided by rule
48 of Order 21 of the First Schedule to the Code of Civil Procedure, 1908 (5 of
1908), and the provisions of the said rule shall, for the purposes of this
rule, apply subject to such modifications as may be necessary.
Attachment of negotiable instrument.
30. Where the property is a negotiable instrument not
deposited in a court nor in the custody of a public officer, the attachment
shall be made by actual seizure, and the instrument shall be brought before the
Tax Recovery Officer and held subject to his orders.
Attachment of property in custody of court or public officer.
31. Where the property to be attached is in the custody of
any court or public officer, the attachment shall be made by a notice to such
court or officer, requesting that such property, and any interest or dividend
becoming payable thereon, may be held subject to the further orders of the Tax
Recovery Officer by whom the notice is issued:
Provided that, where such property is in the custody of a
court, any question of title or priority arising between the 87[Tax Recovery] Officer
and any other person, not being the defaulter, claiming to be interested in
such property by virtue of any assignment, attachment or otherwise, shall be
determined by such court.
Attachment of partnership property.
32. (1) Where the property to be attached consists of an
interest of the defaulter, being a partner, in the partnership property, the
Tax Recovery Officer may make an order charging the share of such partner in
the partnership property and profits with payment of the amount due under the
certificate, and may, by the same or subsequent order, appoint a receiver of
the share of such partner in the profits, whether already declared or accruing
and of any other money which may become due to him in respect of the
partnership, and direct accounts and inquiries and make an order for the sale
of such interest or such other order as the circumstances of the case may
require.
(2)
The other persons shall be at liberty at any time to redeem the interest
charged or, in the case of a sale being directed, to purchase the same.
Inventory.
33. In the case of attachment of movable property by
actual seizure, the officer shall, after attachment of the property, prepare an
inventory of all the property attached, specifying in it the place where it is
lodged or kept, and shall forward the same to the Tax Recovery Officer and a
copy of the inventory shall be delivered by the officer to the defaulter.
Attachment not to be excessive.
34. The attachment by seizure shall not be excessive,
that is to say, the property attached shall be as nearly as possible
proportionate to the amount specified in the warrant.
Seizure between sunrise and sunset.
35. Attachment by seizure shall be made after sunrise and
before sunset and not otherwise.
Power to break open doors, etc.
36. The officer may break open any inner or outer door or
window of any building and enter any building in order to seize any movable
property if the officer has reasonable grounds to believe that such building
contains movable property liable to seizure under the warrant and the officer
has notified his authority and intention of breaking open if admission is not
given. He shall, however, give all reasonable opportunity to women to withdraw.
Sale
Sale.
37. The Tax Recovery Officer may direct that any movable
property attached under this Schedule or such portion thereof as may seem
necessary to satisfy the certificate shall be sold.
Issue of proclamation.
38. When any sale of movable property is ordered by the
Tax Recovery Officer, the Tax Recovery Officer shall issue a proclamation, in
the language of the district, of the intended sale, specifying the time and
place of sale and whether the sale is subject to confirmation or not.
Proclamation how made.
39. (1) Such proclamation shall be made by beat of drum
or other customary mode,
(a) in the case of property attached by actual seizure
(i) in the village in which the property was seized, or, if the
property was seized in a town or city, then, in the locality in which it was
seized; and
(ii) at such other places as the Tax Recovery Officer may direct;
(b) in the case of property attached otherwise than by actual seizure,
in such places, if any, as the Tax Recovery Officer may direct.
(2)
A copy of the proclamation shall also be affixed in a conspicuous part of the
office of the Tax Recovery Officer.
Sale
after fifteen days.
40. Except where the property is subject to speedy and
natural decay or when the expense of keeping it in custody is likely to exceed
its value, no sale of movable property under this Schedule shall, without the
consent in writing of the defaulter, take place until after the expiry of at
least fifteen days calculated from the date on which a copy of the sale
proclamation was affixed in the office of the Tax Recovery Officer.
Sale
of agricultural produce.
41. (1) Where the property to be sold is agricultural
produce, the sale shall be held,
(a) if such produce is a growing cropon or near the land on which
such crop has grown, or
(b) if such produce has been cut or gatheredat or near the threshing
floor or place for treading out grain or the like, or fodder-stack, on or in
which it is deposited:
Provided that the Tax Recovery Officer may direct the sale to
be held at the nearest place of public resort, if he is of opinion that the
produce is thereby likely to sell to greater advantage.
(2)
Where, on the produce being put up for sale,
(a) a fair price, in the estimation of the person holding the sale, is
not offered for it, and
(b) the owner of the produce, or a person authorised to act on his
behalf, applies to have the sale postponed till the next day or, if a market is
held at the place of sale, the next market day,
the
sale shall be postponed accordingly, and shall be then completed, whatever
price may be offered for the produce.
Special provisions relating to growing crops.
42. (1) Where the property to be sold is a growing crop
and the crop from its nature admits of being stored but has not yet been
stored, the day of the sale shall be so fixed as to admit of the crop being
made ready for storing before the arrival of such day, and the sale shall not
be held until the crop has been cut or gathered and is ready for storing.
(2)
Where the crop from its nature does not admit of being stored or can be sold to
a greater advantage in an unripe stage (e.g., as green wheat), it may be
sold before it is cut and gathered, and the purchaser shall be entitled to
enter on the land, and to do all that is necessary for the purpose of tending
or cutting or gathering the crop.
Sale to be by auction.
43. The property shall be sold by public auction in one
or more lots as the officer may consider advisable, and if the amount to be
realised by sale is satisfied by the sale of a portion of the property, the
sale shall be immediately stopped with respect to the remainder of the lots.
Sale by public auction.
44. (1) Where movable property is sold by public auction,
the price of each lot shall be paid at the time of sale or as soon after as the
officer holding the sale directs and in default of payment, the property shall
forthwith be resold.
(2)
On payment of the purchase-money, the officer holding the sale shall grant a
certificate specifying the property purchased, the price paid and the name of
the purchaser, and the sale shall become absolute.
(3)
Where the movable property to be sold is a share in goods belonging to the
defaulter and a co-owner, and two or more persons, of whom one is such
co-owner, respectively bid the same sum for such property or for any lot, the
bidding shall be deemed to be the bidding of the co-owner.
Irregularity not to vitiate sale, but any person injured may sue.
45. No irregularity in publishing or conducting the sale
of movable property shall vitiate the sale, but any person sustaining
substantial injury by reason of such irregularity at the hand of any other
person may institute a suit in a civil court against him for compensation, or
(if such other person is the purchaser) for the recovery of the specific
property and for compensation in default of such recovery.
Negotiable instruments and shares in a corporation.
46. Notwithstanding anything contained in this Schedule,
where the property to be sold is a negotiable instrument or a share in a
corporation, the Tax Recovery Officer may, instead of directing the sale to be
made by public auction, authorise the sale of such instrument or share through
a broker.
Order for payment of coin or currency notes to the 88[Assessing]
Officer.
47. Where the property attached is current coin or
currency notes, the Tax Recovery Officer may, at any time during the
continuance of the attachment, 89[direct
that such coins or notes shall be credited to the Central Government and the
amount so credited shall be dealt with in the manner specified in rule 8].
PART III
attachment and sale of immovable property
Attachment
Attachment.
48. Attachment of the immovable property of the defaulter
shall be made by an order prohibiting the defaulter from transferring or
charging the property in any way and prohibiting all persons from taking any
benefit under such transfer or charge.
Service of notice of attachment.
49. A copy of the order of attachment shall be served on
the defaulter.
Proclamation of attachment.
50. The order of attachment shall be proclaimed at some
place on or adjacent to the property attached by beat of drum or other
customary mode, and a copy of the order shall be affixed on a conspicuous part
of the property and on the notice board of the office of the Tax Recovery
Officer.
Attachment to relate back from the date of service of notice.
51. Where any immovable property is attached under this
Schedule, the attachment shall relate back to, and take effect from, the date
on which the notice to pay the arrears, issued under this Schedule, was served
upon the defaulter.
Sale
Sale and proclamation of sale.
52. (1) The Tax Recovery Officer may direct that any
immovable property which has been attached, or such portion thereof as may seem
necessary to satisfy the certificate, shall be sold.
(2)
Where any immovable property is ordered to be sold, the Tax Recovery Officer
shall cause a proclamation of the intended sale to be made in the language of
the district.
Contents of proclamation.
53. A proclamation of sale of immovable property shall be
drawn up after notice to the defaulter, and shall state the time and place of
sale, and shall specify, as fairly and accurately as possible,
(a) the property to be sold;
(b) the revenue, if any, assessed upon the property or any part
thereof;
(c) the amount for the recovery of which the sale is ordered; 90[***]
91[(cc) the reserve price, if any, below which the
property may not be sold; and]
(d) any other thing which the Tax Recovery Officer considers it
material for a purchaser to know, in order to judge the nature and value of the
property.
Mode of making proclamation.
54. (1) 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, and a copy of the proclamation shall be affixed on a
conspicuous part of the property and also upon a conspicuous part of the office
of the Tax Recovery Officer.
(2)
Where the Tax Recovery Officer so directs, such proclamation shall also be
published in the Official Gazette or in a local newspaper, or in both; and the
cost of such publication shall be deemed to be costs of the sale.
(3)
Where the property is divided into lots for the purpose of being sold
separately, it shall not be necessary to make a separate proclamation for each
lot, unless proper notice of the sale cannot, in the opinion of the Tax Recovery
Officer, otherwise be given.
Time of sale.
55. No sale of immovable property under this Schedule
shall, without the consent in writing of the defaulter, take place until after
the expiration of at least thirty days calculated from the date on which a copy
of the proclamation of sale has been affixed on the property or in the office
of the Tax Recovery Officer, whichever is later.
Sale to be by auction.
56. The sale shall be by public auction to the highest
bidder and shall be subject to confirmation by the Tax Recovery Officer :
92[Provided that
no sale under this rule shall be made if the amount bid by the highest bidder
is less than the reserve price, if any, specified under clause (cc) of
rule 53.]
Deposit by purchaser and resale in default.
57. (1) On every sale of immovable property, the person
declared to be the purchaser shall pay, immediately after such declaration, a
deposit of twenty-five per cent on the amount of his purchase money, to the
officer conducting the sale; and, in default of such deposit, the property
shall forthwith be resold.
(2)
The full amount of purchase money payable shall be paid by the purchaser to the
Tax Recovery Officer on or before the fifteenth day from the date of the sale
of the property.
Procedure in default of payment.
58. In default of payment within the period mentioned in
the preceding rule, the deposit may, if the Tax Recovery Officer thinks fit,
after defraying the expenses of the sale, be forfeited to the Government, and the
property shall be resold, and the defaulting purchaser shall forfeit all claims
to the property or to any part of the sum for which it may subsequently be
sold.
Authority to bid.
59. 93[(1) Where
the sale of a property, for which a reserve price has been specified under
clause (cc) of rule 53, has been postponed for want of a bid of an
amount not less than such reserve price, it shall be lawful for an 94[Assessing] Officer,
if so authorised by the 95[Chief
Commissioner or Commissioner] in this behalf, to bid for the property on behalf
of the Central Government at any subsequent sale.]
96[(2)] All persons
bidding at the sale shall be required to declare, if they are bidding on their
own behalf or on behalf of their principals. In the latter case, they shall be
required to deposit their authority, and in default their bids shall be
rejected.
97[(3) Where the 94[Assessing] Officer
referred to in sub-rule (1) is declared to be the purchaser of the property at
any subsequent sale, nothing contained in rule 57 shall apply to the case and
the amount of the purchase price shall be adjusted towards the amount specified
in the certificate.]
Application to set aside sale of immovable property on deposit.
60. (1) Where immovable property has been sold in
execution of a certificate, the defaulter, or any person whose interests are
affected by the sale, may, at any time within thirty days from the date of the
sale, apply to the Tax Recovery Officer to set aside the sale, on his
depositing
98(a) 99[***] the amount
specified in the proclamation of sale as that for the recovery of which the
sale was ordered, with interest thereon at the rate of 1[one and one-fourth per cent for every month or
part of a month], calculated from the date of the proclamation of sale to the
date when the deposit is made; and
(b) for payment to the purchaser, as penalty, a sum equal to five per
cent of the purchase money, but not less than one rupee.
(2)
Where a person makes an application under rule 61 for setting aside the sale of
his immovable property, he shall not, unless he withdraws that application, be
entitled to make or prosecute an application under this rule.
Application to set aside sale of immovable property on ground of
non-service of notice or irregularity.
61. Where immovable property has been sold in execution of
a certificate, 2[such
Income-tax Officer as may be authorised by the Chief Commissioner or
Commissioner in this behalf], the defaulter, or any person whose interests are
affected by the sale, may, at any time within thirty days from the date of the
sale, apply to the Tax Recovery Officer to set aside the sale of the immovable
property on the ground that notice was not served on the defaulter to pay the
arrears as required by this Schedule or on the ground of a material
irregularity in publishing or conducting the sale:
Provided that
(a) no sale shall be set aside on any such ground unless the Tax
Recovery Officer is satisfied that the applicant has sustained substantial
injury by reason of the non-service or irregularity; and
(b) an application made by a defaulter under this rule shall be
disallowed unless the applicant deposits the amount recoverable from him in the
execution of the certificate.
Setting aside sale where defaulter has no saleable interest.
62. At any time within thirty days of the sale, the
purchaser may apply to the Tax Recovery Officer to set aside the sale on the
ground that the defaulter had no saleable interest in the property sold.
Confirmation of sale.
63. (1) Where no application is made for setting aside the
sale under the foregoing rules or where such an application is made and
disallowed by the Tax Recovery Officer, the Tax Recovery Officer shall (if the
full amount of the purchase money has been paid) make an order confirming the
sale, and, thereupon, the sale shall become absolute.
(2)
Where such application is made and allowed, and where, in the case of an
application made to set aside the sale on deposit of the amount and penalty and
charges, the deposit is made within thirty days from the date of the sale, the
Tax Recovery Officer shall make an order setting aside the sale :
Provided that no order shall be made unless notice of the
application has been given to the persons affected thereby.
Return of purchase money in certain cases.
64. Where a sale of immovable property is set aside, any
money paid or deposited by the purchaser on account of the purchase, together
with the penalty, if any, deposited for payment to the purchaser, and such
interest as the Tax Recovery Officer may allow, shall be paid to the purchaser.
Sale certificate.
65. (1) Where a sale of immovable property has become
absolute, the Tax Recovery Officer shall grant a certificate specifying the
property sold, and the name of the person who at the time of sale is declared
to be the purchaser.
(2)
Such certificate shall state the date on which the sale became absolute.
Postponement of sale to enable defaulter to raise
amount due under certificate.
66. (1) Where an order for the sale of immovable property
has been made, if the defaulter can satisfy the Tax Recovery Officer that there
is reason to believe that the amount of the certificate may be raised by the
mortgage or lease or private sale of such property, or some part thereof, or of
any other immovable property of the defaulter, the Tax Recovery Officer may, on
his application, postpone the sale of the property comprised in the order for
sale, on such terms, and for such period as he thinks proper, to enable him to
raise the amount.
(2)
In such case, the Tax Recovery Officer shall grant a certificate to the
defaulter, authorising him, within a period to be mentioned therein, and
notwithstanding anything contained in this Schedule, to make the proposed
mortgage, lease or sale:
Provided that all moneys payable under such mortgage, lease or
sale shall be paid, not to the defaulter, but to the Tax Recovery Officer:
Provided also that no mortgage, lease or sale under this rule shall
become absolute until it has been confirmed by the Tax Recovery Officer.
Fresh proclamation before re-sale.
67. Every re-sale of immovable property, in default of
payment of the purchase money within the period allowed for such payment, shall
be made after the issue of a fresh proclamation in the manner and for the
period hereinbefore provided for the sale.
Bid of co-sharer to have preference.
68. Where the property sold is a share of undivided
immovable property, and two or more persons, of whom one is a co-sharer,
respectively bid the same sum for such property or for any lot, the bid shall
be deemed to be the bid of the co-sharer.
3[Acceptance
of property in satisfaction of amount due from the defaulter.
68A. (1) Without prejudice to the provisions contained in
this Part, an 4[Assessing]
Officer, duly authorised by the 5[Chief Commissioner
or Commissioner] in this behalf, may accept in satisfaction of the whole or any
part of the amount due from the defaulter the property, the sale of which has
been postponed for the reason mentioned in sub-rule (1) of rule 59, at such
price as may be agreed upon between the 6[Assessing] Officer and the defaulter.
(2)
Where any property is accepted under sub-rule (1), the defaulter shall deliver
possession of such property to the 7[Assessing] Officer and on the date the
possession of the property is delivered to the 7[Assessing] Officer, the property shall vest in
the Central Government and the Central Government shall, where necessary, intimate
the concerned Registering Officer appointed under the Registration Act, 1908
(16 of 1908), accordingly.
(3) Where
the price of the property agreed upon under sub-rule (1) exceeds the amount due
from the defaulter, such excess shall be paid by the 7[Assessing] Officer to the defaulter within a
period of three months from the date of delivery of possession of the property
and where the 7[Assessing]
Officer fails to pay such excess within the period aforesaid, the Central
Government shall, for the period commencing on the expiry of such period and
ending with the date of payment of the amount remaining unpaid, pay simple
interest at 8[one-half
per cent for every month or part of a month] to the defaulter on such amount.]
9[Time
limit for sale of attached immovable property.
68B. (1) No sale of immovable property shall be made under
this Part after the expiry of three years10 from the end of the financial year in which the
order giving rise to a demand of any tax, interest, fine, penalty or any other
sum, for the recovery of which the immovable property has been attached, has
become conclusive under the provisions of section 245-I
or, as the case may be, final in terms of the provisions of Chapter XX:
Provided that where the immovable property is required to be
re-sold due to the amount of highest bid being less than the reserve price or
under the circumstan-ces mentioned in rule 57 or rule 58 or where the sale is
set aside under rule 61, the aforesaid period of limitation for the sale of the
immovable property shall stand extended by one year.
(2)
In computing the period of limitation under sub-rule (1), the period
(i) during which the levy of the aforesaid tax, interest, fine,
penalty or any other sum is stayed by an order or injunction of any court; or
(ii) during which the proceedings of attachment or sale of the
immovable property are stayed by an order or injunction of any court; or
(iii) commencing from the date of the presentation of any appeal against
the order passed by the Tax Recovery Officer under this Schedule and ending on
the day the appeal is decided,
shall be excluded :
Provided that where immediately after the exclusion of the
aforesaid period, the period of limitation for the sale of the immovable
property is less than 180 days, such remaining period shall be extended to 180
days and the aforesaid period of limitation shall be deemed to be extended
accordingly.
(3)
Where any immovable property has been attached under this Part before the 1st
day of June, 1992, and the order giving rise to a demand of any tax, interest,
fine, penalty or any other sum, for the recovery of which the immovable
property has been attached, has also become conclusive or final before the said
date, that date shall be deemed to be the date on which the said order has
become conclusive or, as the case may be, final.
(4)
Where the sale of immovable property is not made in accordance with the
provisions of sub-rule (1), the attachment order in relation to the said
property shall be deemed to have been vacated on the expiry of the time of
limitation specified under this rule.]
PART IV
APPOINTMENT OF RECEIVER
Appointment of receiver for business.
69. (1) Where the property of a defaulter consists of a
business, the Tax Recovery Officer may attach the business and appoint a person
as receiver to manage the business.
(2)
Attachment of a business under this rule shall be made by an order prohibiting
the defaulter from transferring or charging the business in any way and
prohibiting all persons from taking any benefit under such transfer or charge,
and intimating that the business has been attached under this rule. A copy of
the order of attachment shall be served on the defaulter, and another copy
shall be affixed on a conspicuous part of the premises in which the business is
carried on and on the notice board of the office of the Tax Recovery Officer.
Appointment of receiver for immovable property.
70. Where immovable property is attached, the Tax Recovery
Officer may, instead of directing a sale of the property, appoint a person as
receiver to manage such property.
Powers of receiver.
71. (1) Where any business or other property is attached
and taken under management under the foregoing rules, the receiver shall,
subject to the control of the Tax Recovery Officer, have such powers as may be
necessary for the proper management of the property and the realisation of the
profits, or rents and profits, thereof.
(2)
The profits, or rents and profits, of such business or other property, shall,
after defraying the expenses of management, be adjusted towards discharge of
the arrears, and the balance, if any, shall be paid to the defaulter.
Withdrawal of management.
72. The attachment and management under the foregoing
rules may be withdrawn at any time at the discretion of the Tax Recovery
Officer, or if the arrears are discharged by receipt of such profits and rents
or are otherwise paid.
PART
V
ARREST AND DETENTION OF THE DEFAULTER
Notice to show cause.
73. (1) No order for the arrest and detention in civil
prison of a defaulter shall be made unless the Tax Recovery Officer has issued
and served a notice upon the defaulter calling upon him to appear before him on
the date specified in the notice and to show cause why he should not be
committed to the civil prison, and unless the Tax Recovery Officer, for reasons
recorded in writing, is satisfied
(a) that the defaulter, with the object or effect of obstructing the
execution of the certificate, has, after 11[the drawing up of the certificate by the Tax
Recovery Officer], dishonestly transferred, concealed, or removed any part of
his property, or
(b) that the defaulter has, or has had since 11[the drawing up of the certificate by the Tax
Recovery Officer], the means to pay the arrears or some substantial part
thereof and refuses or neglects or has refused or neglected to pay the same.
(2) Notwithstanding anything contained in sub-rule
(1), a warrant for the arrest of the defaulter may be issued by the Tax
Recovery Officer if the Tax Recovery Officer is satisfied, by affidavit or
otherwise, that with the object or effect of delaying the execution of the
certificate, the defaulter is likely to abscond or leave the local limits of
the jurisdiction of the Tax Recovery Officer.
(3) Where appearance is not made in obedience to a
notice issued and served under sub-rule (1), the Tax Recovery Officer may issue
a warrant for the arrest of the defaulter.
12[(3A) A
warrant of arrest issued by a Tax Recovery Officer under sub-rule (2) or
sub-rule (3) may also be executed by any other Tax Recovery Officer within
whose jurisdiction the defaulter may for the time being be found.]
(4) Every person arrested in pursuance of a warrant of
arrest under 13[this rule]
shall be brought before the Tax Recovery Officer 14[issuing the warrant] as soon as practicable and
in any event within twenty-four hours of his arrest (exclusive of the time
required for the journey):
Provided that, if the defaulter pays the amount entered
in the warrant of arrest as due and the costs of the arrest to the officer
arresting him, such officer shall at once release him.
15[Explanation.For
the purposes of this rule, where the defaulter is a Hindu undivided family, the
karta thereof shall be deemed to be the defaulter.]
Hearing.
74. When a defaulter appears before the Tax Recovery
Officer in obedience to a notice to show cause or is brought before the
Tax Recovery Officer under rule 73, 16[the Tax Recovery Officer shall give the
defaulter] an opportunity of showing cause why he should not be committed to
the civil prison.
Custody pending
hearing.
75. Pending the conclusion of the inquiry, the Tax
Recovery Officer may, in his discretion, order the defaulter to be detained in
the custody of such officer as the Tax Recovery Officer may think fit or
release him on his furnishing security to the satisfaction of the Tax Recovery
Officer for his appearance when required.
Order of detention.
76. (1) Upon the conclusion of the inquiry, the Tax
Recovery Officer may make an order for the detention of the defaulter in the
civil prison and shall in that event cause him to be arrested if he is not
already under arrest:
Provided that in order to give the defaulter an opportunity of
satisfying the arrears, the Tax Recovery Officer may, before making the order
of detention, leave the defaulter in the custody of the officer arresting him
or of any other officer for a specified period not exceeding 15 days, or
release him on his furnishing security to the satisfaction of the Tax Recovery
Officer for his appearance at the expiration of the specified period if the
arrears are not so satisfied.
(2)
When the Tax Recovery Officer does not make an order of detention under
sub-rule (1) he shall, if the defaulter is under arrest, direct his release.
Detention in and release from prison.
77. (1) Every person detained in the civil prison in
execution of a certificate may be so detained,
(a) where the certificate is for a demand of an amount exceeding two
hundred and fifty rupeesfor a period of six months, and
(b) in any other casefor a period of six weeks:
Provided that he shall be released from such detention
(i) on the amount mentioned in the warrant for his detention being
paid to the officer-in-charge of the civil prison, or
17[(ii) on the request of the Tax Recovery Officer on
any ground other than the grounds mentioned in rules 78 and 79.]
18[***]
(2)
A defaulter released from detention under this rule shall not, merely by reason
of his release, be discharged from his liability for the arrears; but he shall
not be liable to be rearrested under the certificate in execution of which he
was detained in the civil prison.
Release.
78. (1) The Tax Recovery Officer may order the release of
a defaulter who has been arrested in execution of a certificate upon being
satisfied that he has disclosed the whole of his property and has placed it at
the disposal of the Tax Recovery Officer and that he has not committed any act
of bad faith.
(2)
If the Tax Recovery Officer has ground for believing the disclosure made by a
defaulter under sub-rule (1) to have been untrue, he may order the rearrest of
the defaulter in execution of the certificate, but the period of his detention
in the civil prison shall not in the aggregate exceed that authorised by rule
77.
Release on ground of illness.
79. (1) At any time after a warrant for the arrest of a
defaulter has been issued, the Tax Recovery Officer may cancel it on the ground
of his serious illness.
(2)
Where a defaulter has been arrested, the Tax Recovery Officer may release him
if, in the opinion of the Tax Recovery Officer, he is not in a fit state of
health to be detained in the civil prison.
(3)
Where a defaulter has been committed to the civil prison, he may be released
therefrom by the Tax Recovery Officer on the ground of the existence of any
infectious or contagious disease, or on the ground of his suffering from any
serious illness.
(4)
A defaulter released under this rule may be rearrested, but the period of his
detention in the civil prison shall not in the aggregate exceed that authorised
by rule 77.
Entry into dwelling house.
80. For the purpose of making an arrest under this
Schedule
(a) no dwelling house shall be entered after sunset and before
sunrise;
(b) no outer door of a dwelling house shall be broken open unless such
dwelling house or a portion thereof is in the occupancy of the defaulter and he
or other occupant of the house refuses or in any way prevents access thereto;
but, when the person executing any such warrant has duly gained access to any
dwelling house, he may break open the door of any room or apartment if he has
reason to believe that the defaulter is likely to be found there;
(c) no room, which is in the actual occupancy of a woman who,
according to the customs of the country, does not appear in public, shall be
entered into unless the officer authorised to make the arrest has given notice
to her that she is at liberty to withdraw and has given her reasonable time and
facility for withdrawing.
Prohibition against arrest of women or minors, etc.
81. The Tax Recovery Officer shall not order the arrest
and detention in the civil prison of
(a) a woman, or
(b) any person who, in his opinion, is a minor or of unsound mind.
PART
VI
MISCELLANEOUS
Officers deemed to be acting judicially.
82. Every 19[Chief
Commissioner or Commissioner], Tax Recovery Officer or other officer acting
under this Schedule shall, in the discharge of his functions under this
Schedule, be deemed to be acting judicially within the meaning of the Judicial
Officers Protection Act, 1850 (18 of 1850).
Power to take evidence.
83. Every 19[Chief
Commissioner or Commissioner], Tax Recovery Officer or other officer acting
under the provisions of this Schedule shall have the powers of a civil court
while trying a suit for the purpose of receiving evidence, administering oaths,
enforcing the attendance of witnesses and compelling the production of
documents.
Continuance of certificate.
84. No certificate shall cease to be in force by reason of
the death of the defaulter.
Procedure on death of defaulter.
85. 20[If at any
time after the certificate is drawn up by the Tax Recovery Officer] the
defaulter dies, the proceedings under this Schedule (except arrest and
detention) may be continued against the legal representative of the defaulter,
and the provisions of this Schedule shall apply as if the legal representative
were the defaulter.
Appeals.
86. 21[(1) An
appeal from any original order passed by the Tax Recovery Officer under this
Schedule, not being an order which is conclusive, shall lie to the Chief
Commissioner or Commissioner.]
(2)
Every appeal under this rule must be presented within thirty days from the date
of the order appealed against.
(3)
Pending the decision of any appeal, execution of the certificate may be stayed
if the appellate authority so directs, but not otherwise.
22[(4) Notwithstanding
anything contained in sub-rule (1), where a Chief Commissioner or Commissioner
is authorised to exercise powers as such in respect of any area, then, all
appeals against the orders passed before the date of such authorisation by any
Tax Recovery Officer authorised to exercise powers as such in respect of that
area, or an area which is included in that area, shall lie to such Chief
Commissioner or Commissioner.]
Review.
87. Any order passed under this Schedule may, after notice
to all persons interested, be reviewed by the 23[Chief Commissioner or Commissioner], Tax
Recovery Officer or other officer who made the order, or by his successor in
office, on account of any mistake apparent from the record.
Recovery from surety.
88. Where any person has under this Schedule become surety
for the amount due by the defaulter, he may be proceeded against under this
Schedule as if he were the defaulter.
Penalties.
89. [Omitted by the Direct Tax Laws (Amendment) Act,
1987, w.e.f. 1-4-1989.]
Subsistence allowance.
90. (1) When a defaulter is arrested or detained in the
civil prison, the sum payable for the subsistence of the defaulter from the
time of arrest until he is released shall be borne by the 24[Tax Recovery Officer].
(2)
Such sum shall be calculated on the scale fixed by the State Government for the
subsistence of judgment-debtors arrested in execution of a decree of a civil
court.
(3)
Sums payable under this rule shall be deemed to be costs in the proceeding:
Provided that the defaulter shall not be detained in the civil
prison or arrested on account of any sum so payable.
Forms.
91. The Board may prescribe the form to be used for any
order, notice, warrant, or certificate to be issued under this Schedule.
Power to make rules.
92. (1) The Board may make rules, consistent with the
provisions of this Act, regulating the procedure to be followed by 25[Chief Commissioners, Commissioners], Tax
Recovery Officers and other officers acting under this Schedule.
(2)
In particular, and without prejudice to the generality of the power conferred
by sub-rule (1), such rules may provide for all or any of the following
matters, namely:
(a) the area within which 25[Chief Commissioners, Commissioners] or Tax
Recovery Officers may exercise jurisdiction;
(b) the manner in which any property sold under this Schedule may be
delivered;
(c) the execution of a document or the endorsement of a negotiable
instrument or a share in a corporation, by or on behalf of the Tax Recovery
Officer, where such execution or endorsement is required to transfer such
negotiable instrument or share to a person who has purchased it under a sale
under this Schedule;
(d) the procedure for dealing with resistance or obstruction offered
by any person to a purchaser of any immovable property sold under this
Schedule, in obtaining possession of the property;
(e) the fees to be charged for any process issued under this Schedule;
(f) the scale of charges to be recovered in respect of any other
proceeding taken under this Schedule;
(g) recovery of poundage fee;
(h) the maintenance and custody, while under attachment, of livestock
or other movable property, the fees to be charged for such maintenance and
custody, the sale of such livestock or property, and the disposal of proceeds
of such sale;
(i) the mode of attachment of business.
Saving regarding charge.
93. Nothing in this Schedule shall affect any provision of
this Act whereunder the tax is a first charge upon any asset.
26[Continuance
of certain pending proceedings and power to remove difficulties.
94. All proceedings for the recovery of tax pending
immediately before the coming into force of the amendments to this Schedule by
the Direct Tax Laws (Amendment) Act, 1987 shall be continued under this
Schedule as amended by that Act from the stage they had reached, and, for this
purpose, every certificate issued by the 27[Assessing] Officer under section 222 before such amendment shall be deemed to
be a certificate drawn up by the Tax Recovery Officer under that section after
such amendment, and, if any difficulty arises in continuing the said
proceedings, the Board may issue (whether by way of modification, not affecting
the substance, of any rule in this Schedule or otherwise) general or special
orders which appear to it to be necessary or expedient for the purpose of
removing the difficulty.]