THE SECOND SCHEDULE
PROCEDURE FOR RECOVERY OF TAX
[[See sections 222 and 276]]
PART I
GENERAL
PROVISIONS
Definitions.
1. In this Schedule, unless the context
otherwise requires,—
[(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. [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 defaulter’s movable property;
(b) by attachment
and sale of the defaulter’s immovable property;
(c) by arrest of
the defaulter and his detention in prison;
(d) by appointing a
receiver for the management of the defaulter’s 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.
Purchaser’s 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 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.
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.
[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 [Tax Recovery] Officer and the
defaulter or their representatives, relating to the execution, discharge or
satisfaction of a certificate [***], 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 Officer’s 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 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.
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 purchaser’s 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 [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 property
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.
[Entrustment
of certain functions by Tax Recovery Officer.
19A. A Tax Recovery Officer may, with the previous
approval of the [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
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
defaulter’s 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;
[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 re-attachment 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 debt—the
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 share—the 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 [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 [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 [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 [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
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.
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.
41. (1) Where the property to be sold is
agricultural produce, the sale shall be held,—
(a) if such produce is a growing crop—on or near the land on
which such crop has grown, or
(b) if
such produce has been cut or gathered—at 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.
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.
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 [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, [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
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
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; [***]
[(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.
56. The sale shall be by public auction to the
highest bidder and shall be subject to confirmation by the Tax Recovery Officer :
[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. [(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 [Assessing] Officer, if so authorised by the [Chief
Commissioner or Commissioner] in this behalf, to bid for the property on behalf
of the Central Government at any subsequent sale.]
[(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.
[(3) Where
the [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—
(a)
[***] 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 [ [fifteen] per cent per annum],
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, [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.
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.
[Acceptance of property in satisfaction of amount due from the defaulter.
68A. (1) Without prejudice to the provisions
contained in this Part, an [Assessing] Officer,
duly authorised by the [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 [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 Assessing] Officer and on the date the possession of the property is
delivered to the [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 [Assessing] Officer to the defaulter within a
period of three months from the date of delivery of possession of the property
and where the [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 [six] per cent per annum]
to the defaulter on such amount.]
[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 years 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 circumstances 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 [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 [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.
[(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 [this rule] shall be brought before the
Tax Recovery Officer [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.
[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, [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 rupees—for a period of six months, and
(b) in any other case—for 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
[(ii) on the request of the Tax Recovery Officer on any ground
other than the grounds mentioned in rules 78 and 79.]
[***]
(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 [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 [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. [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. [(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.
[(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 [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 [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 [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 [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.
[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 [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.]