Prospective tax recovery limits cannot defeat final assessment-based recoveries or vested revenue rights under article 226.

Rule 68B of the Second Schedule to the Income-tax Act was held to operate prospectively, so it could not invalidate recovery and auction proceedings founded on assessment years that had already become final and conclusive before 1 June 1992. The Court reasoned that a later limitation provision cannot be read retrospectively to defeat pending tax recovery steps or to impair the revenue's vested right to collect tax under final assessment orders. Relief under article 226 was also refused because writ jurisdiction is discretionary and no equitable ground existed to interfere with the admitted recoveries on a technical objection.

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Issues: Whether rule 68B of the Second Schedule to the Income-tax Act, 1961 barred the sale and recovery proceedings initiated in respect of assessment years long prior to 1 June 1992, and whether relief under article 226 should be granted against the impugned recoveries.

Analysis: Rule 68B was inserted by the Finance Act, 1992 with effect from 1 June 1992. The attached properties and the recovery certificate in question related to assessment years 1942-43 to 1977-78, and the demand had become final and conclusive long before the new rule came into force. The provision was held to be prospective and not retrospective, because it could not be applied so as to defeat recovery proceedings already pending or to impair the State's vested right to collect taxes arising from final assessment orders. The Court further held that writ jurisdiction under article 226 is discretionary, and no equitable ground existed to interfere with admitted tax recoveries on a technical objection.

Conclusion: Rule 68B did not apply to the impugned recovery proceedings, and the petitioner was not entitled to relief under article 226.

Final Conclusion: The challenge to the auction and recovery proceedings failed, and the attachment and sale proceedings were left undisturbed.

Ratio Decidendi: A limitation provision inserted prospectively cannot defeat tax recovery proceedings arising from assessment orders that had already become final and conclusive before the provision came into force, and vested revenue rights are not to be taken away by retrospective implication.

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