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TMI BlogTHE FIFTH SCHEDULE - PROCEDURE FOR RECOVERY OF TAXX X X X Extracts X X X X X X X X Extracts X X X X ..... f the notice. (2) The notice under sub-rule (1) shall also intimate to the defaulter that steps would be taken to realize the amount under this Schedule, if he defaults to make payment within the time specified therein. When certificate may be executed. 3. (1) 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. (2) However, the Tax Recovery Officer may attach the whole, or any part, of the movable property of the defaulter, as would be liable to attachment in execution of a decree of a civil court, within the said period of fifteen days if,- (a) he is satisfied, for reasons to be recorded in writing, that the defaulter is likely to conceal, remove or dispose of the whole, or any part, of the movable property; and (b) the realization of the amount of the certificate would in consequence be delayed or obstructed. (3) The defaulter whose property has been so attached may furnish security to the satisfaction of the Tax Recovery Officer and on such acceptance of the security by the Tax Recovery Officer, the attachment shall be cancelled from the date on which the sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the property, wholly or to such extent as he thinks fit, from attachment or sale if, upon the said investigation, he is satisfied that, for the reason stated in the claim or objection, such property- (a) was not, at the said date, in the possession of the defaulter or of some person in trust for him; (b) was not in the occupancy of a tenant or other person paying rent to the defaulter; or (c) 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, . (6) The Tax Recovery Officer shall disallow the claim, if, for reasons to be recorded in writing, he is satisfied that the property was (a) at the said date, in the possession of the defaulter as his own property and not on account of any other person; (b) in the possession of some other person in trust for the defaulter, or (c) in the occupancy of a tenant or other person paying rent to the defaulter. (7) 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 est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural produce. 25. (1) 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; (2) A copy of warrant of attachment, where the property to be attached is agricultural produce, shall also affixed 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- (a) carries on business or personally works for gain; or (b) is known to have last resided or carried on business or personally worked for gain. (3) Upon affixing the copy of warrant, under sub-rules (1) and (2), the produce shall be deemed to have passed into the possession of the Tax Recovery Officer. Provisions as to agricultural produce under attachment. 26. (1) Where agricultural produce is attached, the Tax Recovery Officer shall mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 28. (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- (a) the Tax Recovery Officer cancels the notice; or (b) 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 (b) 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, proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to in sub-rule(1) or any 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. (3) 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. 34. 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. 35. 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. 36. Attachment by seizure shall be made after sun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear the threshing floor or place for treading out grain or the like, or fodder-stack, on or in which it is deposited. (2) However, 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. (3) The sale shall be postponed, 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. (4) When the sale has been postpone under sub-rule (3), it shall be then completed on the date postponed regardless of any price offered for the produce. Special provisions relating to growing crops. 43. (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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 SALE OF IMMOVABLE PROPERTY ATTACHMENT Attachment. 49. 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. 50. A copy of the order of attachment shall be served on the defaulter. Proclamation of attachment. 51. 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. 52. Where any immovable property is attached under this Schedule, the attachment shall relate back to, and take effect from, the date on which the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation by the Tax Recovery Officer. (2) However, 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 (d) of rule 54. Deposit by purchaser and resale in default. 58. (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. 59. 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. 60. (1) Where the sale of a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he immovable property on the ground- (a) that notice was not served on the defaulter to pay the arrears as required by this Schedule; or (b) of a material irregularity in publishing, or conducting, the sale. (2) No sale shall be set aside on any ground referred to in sub-rule (1) unless the Tax Recovery Officer is satisfied that the applicant has sustained substantial injury by reason of the non-service or irregularity. (3) 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. 63. 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. 64. (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 sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 69. 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. 70. (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 60, 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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid period of limitation shall be deemed to be extended accordingly. (5) 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. 72. (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. 73. Where immovable property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the arrest of the defaulter if appearance is not made in obedience to a notice issued and served under sub-rule (1). (5) A warrant of arrest issued by a Tax Recovery Officer under sub-rule (3) or sub-rule (4) may also be executed by any other Tax Recovery Officer within whose jurisdiction the defaulter may for the time being be found. (6) 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). (7) The Tax Recovery Officer shall at once release the defaulter if he pays the amount entered in the warrant of arrest as due and the costs of the arrest to the officer arresting him. (8) For the purposes of this rule, the karta of a Hindu undivided family shall be deemed to be the defaulter if the defaulter is the Hindu undivided family. Hearing. 77. The Tax Recovery Officer shall give the defaulter an opportunity of showing cause why he should not be committed to the civil prison, when the defaulter appears before the Tax Recovery Officer in obedience to a notice to show caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tax Recovery Officer; and (b) he has not committed any act of bad faith. (2) The Tax Recovery Officer may order the rearrest of the defaulter in execution of the certificate, if he has ground for believing the disclosure made by the defaulter under sub-rule (1) to have been untrue. (3) However, the period of the detention of the defaulter in the civil prison shall not in the aggregate exceed that authorised by rule 77. Release on ground of illness. 82. (1) The Tax Recovery Officer may, at any time after a warrant for the arrest of a defaulter has been issued, cancel the warrant on the ground of serious illness of the defaulter. (2) The Tax Recovery Officer may, in a case where a defaulter has been arrested, 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) A defaulter, who has been committed to the civil prison, 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 civ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer. Appeals. 89. (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) Where a Chief Commissioner or Commissioner is authorised to exercise powers as such in respect of any area, then, regardless of anything contained in sub-rule (1), 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. 90. Any order passed under this Schedule may, after notice to all persons interested, be reviewed by the Chief Commissioner, 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 sure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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