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Issues:
1. Validity of auction sale proceedings. 2. Compliance with Section 167 of the U.P. Land Revenue Act, 1901. 3. Impact of subsequent order by the Income-tax Tribunal on recovery proceedings. Analysis: Issue 1: Validity of auction sale proceedings The case involved a certificate for the recovery of estate duty against the petitioner, Smt. Gaitri Devi, leading to an auction of her property. The auction took place on February 4, 1986, where Sri Shiv Kumar emerged as the highest bidder but failed to deposit the required amount. Consequently, the second-highest bidder, Sri Sharad Jaiswal, deposited the amount and the auction was set aside due to objections raised by Smt. Gaitri Devi. The Commissioner, Varanasi Division, upheld the auction proceedings, dismissing the appeals of Smt. Gaitri Devi and Sri Shiv Kumar. However, the High Court found that the Commissioner's order was flawed as it did not order a re-auction as mandated by Section 167 of the U.P. Land Revenue Act, 1901. The Court held that the failure to comply with the mandatory provisions rendered the Commissioner's order invalid, leading to the quashing of the order. Issue 2: Compliance with Section 167 of the U.P. Land Revenue Act, 1901 The High Court emphasized the mandatory nature of Section 167, which requires the property to be re-auctioned if the highest bidder fails to deposit the required amount. In this case, since Sri Shiv Kumar defaulted on the deposit, the Collector was obligated to cancel the auction and direct a re-sale of the property. However, the Sub-Divisional Magistrate set aside the sale based on irregularities, a decision that was overturned by the Commissioner. The Court held that the failure to order a re-auction in such circumstances was a legal error, leading to the quashing of the Commissioner's order. Issue 3: Impact of subsequent order by the Income-tax Tribunal During the pendency of the writ petitions, the Income-tax Tribunal set aside the demand for estate duty against the petitioner and remanded the case for further review. Although the petitioner did not seek relief based on this development in the writ petition, the Court noted that the petitioner could pursue appropriate steps before the Assistant Controller of Estate Duty for withdrawal of the recovery certificate if advised to do so. The Court did not delve into this matter due to the lack of amendment in the writ petition but left the option open for the petitioner to address the issue separately. In conclusion, the High Court allowed both writ petitions, quashed the Commissioner's order, and highlighted the mandatory nature of Section 167 in auction proceedings, emphasizing the need for strict compliance with statutory provisions in such matters.
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