Rule 68B limitation and natural justice in tax recovery sales: prior objections and deemed dates upheld the auction.

Sale proclamation and auction of attached immovable property were challenged on the ground of no fresh notice and breach of natural justice, but the objection failed because the petitioners had already objected to the attachment order and those objections had been considered and rejected. Limitation under rule 68B of the Second Schedule was also disputed, but the deeming rule in sub-rule (3) applied to fix the relevant date, and the three-year period expired on 31 March 1996, while the sale was conducted on 18 July 1995. The sale was therefore within time, and the writ petition was dismissed, subject to the petitioners' liberty to pursue the statutory civil remedy under rule 11(6).

---

---

Issues: (i) Whether the sale proclamation and auction were vitiated for want of notice and violation of natural justice; (ii) Whether the sale of the attached immovable property was barred by limitation under rule 68B of the Second Schedule to the Income-tax Act, 1961.

Issue (i): Whether the sale proclamation and auction were vitiated for want of notice and violation of natural justice.

Analysis: The petitioners had already filed objections to the attachment order, and those objections were considered and rejected by the authority. On that factual basis, the absence of a further notice before issuance of the sale proclamation did not establish any breach of natural justice or fair play.

Conclusion: The challenge on the ground of want of notice and violation of natural justice failed.

Issue (ii): Whether the sale of the attached immovable property was barred by limitation under rule 68B of the Second Schedule to the Income-tax Act, 1961.

Analysis: Rule 68B(1) prescribes a three-year period from the end of the financial year in which the demand order becomes conclusive or final, while rule 68B(3) deems the relevant date, for attachments made before 1 June 1992 and orders becoming final before that date, to be that date. Applying that provision, the relevant financial year was 1992-93, which ended on 31 March 1993, and the three-year period expired only on 31 March 1996. The sale having been held on 18 July 1995, it fell within time.

Conclusion: The sale was not barred by limitation and the plea under rule 68B failed.

Final Conclusion: The writ petition was liable to be dismissed, while leaving the petitioners free to pursue the statutory civil remedy contemplated by rule 11(6) of the Second Schedule.

Ratio Decidendi: For sales of attached immovable property under the recovery provisions, limitation under rule 68B is computed by applying the deeming rule in sub-rule (3) where applicable, and a sale conducted within the resulting three-year period is valid; a prior rejection of objections also negates a claim of procedural unfairness in the absence of a fresh notice requirement.

---