Service of recovery notice under the Second Schedule triggers restraint on dealing with property and bars civil execution process.

Service of a notice under rule 2 of the Second Schedule to the Income-tax Act was established, and that service triggered rule 16. Once the notice was duly served, the defaulter and any representative-in-interest were restricted from mortgaging, creating any charge on, or otherwise dealing with the attached property without the permission of the Tax Recovery Officer. Rule 16 also barred a civil court from issuing process against such property in execution for payment of money. The objection to interference therefore failed and the revision was dismissed.

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Issues: Whether the notice under rule 2 of the Second Schedule to the Income-tax Act, 1961 had been duly served and, if so, whether rule 16 barred the defaulter from dealing with the property.

Analysis: The notice under rule 2 was found to have been not only issued but also served on the defaulter. Once such service was established, rule 16 operated to restrict the defaulter or his representative-in-interest from mortgaging, creating any charge on, or otherwise dealing with the property without the permission of the Tax Recovery Officer. The same rule also barred the civil court from issuing process against such property in execution for payment of money.

Conclusion: The objection to interference failed, and the revision was liable to be dismissed.

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