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THE FIFTH SCHEDULE - PROCEDURE FOR RECOVERY OF TAX

..... unless the context otherwise requires,- (a) certificate , except in rules 7, 44, 65 and sub-rule (2) of rule 66, in respect of any assessee means the certificate referred to in sub-section (1) of section 221; (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. (1) The Tax Recovery Officer shall, upon assumption of jurisdiction under sub-section (8) of section 220, cause to be served upon the defaulter a notice requiring thedefaulter to pay the amount specified in the certificate within fifteen days from the date of service of 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 .....

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..... 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 .....

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..... or sale, the Tax Recovery Officer shall proceed to investigate the claim or objection. (2) However, no such investigation shall be made where the Tax Recovery Officer considers that the claim or objection was designedly or unnecessarily delayed. (3) 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. (4) The claimant, or objector, must adduce evidence to show that he had some interest in, or was possessed of, the property in question- (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. (5) The Tax Recovery Officer shall make an order releasing 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 defaul .....

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..... it is filed after the end of fifteenth day 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 : (2) However, if 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. (3) 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. (4) 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, o .....

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..... e defaulter and the amount to be realized. Service of copy of warrant. 22. The officer shall cause a copy of the warrant to be served on the defaulter. Attachment. 23. 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. 24. (1) 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: (2) The officer referred in sub-rule (1) may sell the property seized at once, if- (a) the property seized is subject to speedy and natural decay; or (b) the expense of keeping the seized property in custody is likely to exceed its value. Agricultural 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 produ .....

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..... s 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. 27. (1) In the case of a debt not secured by a negotiable instrument, a share in a corporation or 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,- (a) 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; (b) 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; (c) 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 .....

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..... achment 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. (2) Where the 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 the court. Attachment of partnership property. 33. (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. (2) The Tax Recovery Officer may, by the order 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 inqu .....

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..... ched 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. 41. 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. 42. (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. (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 .....

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..... y not to vitiate sale, but any person injured may sue. 46. 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. 47. The Tax Recovery Officer may, regardless of anything to the contrary contained in this Schedule, authorise the sale of any property, which is a negotiable instrument or a share in a corporation, through a broker instead of directing the sale to be made by public auction. Order for payment of coin or currency notes to the Assessing Officer. 48. 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 .....

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..... covery 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 56. 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 57. (1) The sale shall be by public auction to the highest bidder and shall be subject to confirmation 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 .....

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..... 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 62 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. 62. (1) 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- (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 .....

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..... 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 regardless anything contained in this Schedule, to make the proposed mortgage, lease or sale. (3) All moneys payable under the mortgage, lease or sale referred to in sub-rule (2) shall be paid to the Tax Recovery Officer and not to the defaulter. (4) 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. 68. 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. 69. Where the property sold is a share of undivided immovable property, and tw .....

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..... (b) under the circumstances mentioned in rule 58 or rule 59; or (c) due to the sale being set aside under rule 62. (3) In computing the period of limitation under sub-rule (1), the following period shall be excluded:- (a) the period 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; (b) the period during which the proceedings of attachment or sale of the immovable property are stayed by an order or injunction of any court; or (c) the period 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. (4) Where immediately after the exclusion of the period referred in sub-rule (3), 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. (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 va .....

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..... iting, is satisfied- (a) that the defaulter has, with the object or effect of obstructing the execution of the certificate, 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. (3) A warrant for the arrest of the defaulter may, regardless of anything contained in sub-rule (1), be issued by the Tax Recovery Officer, if he is satisfied, by affidavit or otherwise, that the defaulter is likely to abscond, or leave the local limits of the jurisdiction of the Tax Recovery Officer, with the object, or effect, of delaying the execution of the certificate. (4) The Tax Recovery Officer may issue a warrant for 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 Office .....

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..... d 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. (2) However, he shall be released from such detention- (a) on the amount mentioned in the warrant for his detention being paid to the officer-in-charge of the civil prison, or (b) on the request of the Tax Recovery Officer on any ground other than the grounds mentioned in rules 78 and 79. (3) A defaulter released from detention under this rule shall not,- (a) be discharged from his liability for the arrears merely by reason of his release; and (b) be liable to be rearrested under the certificate in execution of which he was detained in the civil prison. Release 81. (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- (a) he has disclosed the whole of his property and has placed it at the disposal of the 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) .....

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..... dule, be deemed to be acting judicially within the meaning of the Judicial Officers Protection Act, 1850. Power to take evidence. 86. Every Chief Commissioner, 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. 87. No certificate shall cease to be in force by reason of the death of the defaulter. Procedure on death of defaulter. 88. 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, if the defaulter dies, at any time, after the certificate is drawn up by the Tax Recovery Officer. 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 .....

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..... 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. 95. Nothing in this Schedule shall affect any provision of this Act whereunder the tax is a first charge upon any asset. - Statutory Provisions, Acts .....

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