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Issues: Whether, after service of notice under rule 2 of the Second Schedule to the Income-tax Act, 1961, a civil court could validly issue process against the defaulter's property in execution and whether the attachment raised by the civil court was liable to be set aside.
Analysis: Rule 16 of the Second Schedule prohibits the defaulter from dealing with the property and also bars any civil court from issuing process against such property in execution of a money decree once notice under rule 2 has been served. The statutory bar operates to divest the civil court of jurisdiction to proceed against the property covered by the tax recovery notice. Any attachment or consequential execution step taken by the civil court after such notice is therefore without jurisdiction.
Conclusion: The attachment raised by the civil court was invalid and the order setting it aside was liable to be interfered with in favour of the Revenue.
Ratio Decidendi: Service of notice under rule 2 of the Second Schedule to the Income-tax Act, 1961 creates a statutory bar on civil court process against the defaulter's property in execution, and any such process is without jurisdiction.
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