Limitation for sale of attached property and continuation against legal representatives depend on statutory computation and notice service.

Rule 68B of the Second Schedule limits sale of attached immovable property to three years from the end of the financial year in which the demand order becomes conclusive; for property attached before 1 June 1992, that date is used only to compute the limitation period, not as a fresh starting point. On that reading, a sale notice issued in January 1996 was within time. Rule 85 also permits recovery proceedings to continue against the legal representative of a deceased defaulter from the stage reached on death, and service of notice on the legal representative satisfies natural justice where shown on the record.

---

---

Issues: (i) Whether the sale proclamation and proposed sale of the attached immovable property were barred by limitation under rule 68B of the Second Schedule to the Income-tax Act, 1961. (ii) Whether the recovery proceedings could continue against the petitioner as the legal representative of the deceased defaulter without any violation of natural justice.

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

Analysis: Rule 68B(1) prescribes that no sale of immovable property shall be made after the expiry of three years from the end of the financial year in which the demand order became conclusive. Rule 68B(3) applies where the property was attached before 1 June 1992 and deems that date as the conclusive date only for computing the period under rule 68B(1). Read together, the provisions do not treat 1 June 1992 as the starting point of limitation in such cases. On that basis, the sale notice issued on 5 January 1996 was within time.

Conclusion: The challenge based on limitation failed and the sale proceedings were not time-barred.

Issue (ii): Whether the recovery proceedings could continue against the petitioner as the legal representative of the deceased defaulter without any violation of natural justice.

Analysis: Rule 85 of the Second Schedule authorises continuation of recovery proceedings against the legal representatives of a deceased defaulter from the stage at which they stood on the death of the defaulter, with the legal representative treated as the defaulter for that purpose. The record also showed service of notice on the petitioner demanding payment of arrears. No breach of natural justice was established.

Conclusion: The objection based on absence of notice and natural justice failed.

Final Conclusion: The writ petition was liable to be dismissed, and the Department was left free to proceed in accordance with law after the time granted for payment of arrears.

Ratio Decidendi: For attached immovable property covered by rule 68B(3), the conclusive date is statutorily fixed only for computing the three-year period under rule 68B(1), and recovery may lawfully continue against the legal representative of a deceased defaulter under rule 85 when notice has been served.

---