Appeal dismissed, auction sale invalid, injunction issued, plaintiff's recourse for funds.

The second appeal was dismissed, affirming the lower appellate court's decision. The court held the auction sale invalid due to procedural deficiencies and the invalidity of the recovery proceedings. However, it did not rule on the assessment orders' validity, issuing an injunction against sale confirmation. The plaintiff's recourse for the auction funds deposited with the Collector was left for separate pursuit, with no costs awarded.

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Issues Involved:
1. Validity of assessment orders on the receiver.
2. Jurisdiction and legality of recovery proceedings.
3. Compliance with procedural requirements under the Revenue Recovery Act.
4. Bar of suit under Section 67 of the Indian Income-tax Act, 1922.
5. Limitation period for recovery proceedings.
6. Validity of the auction sale of the properties.
7. Impact of the compromise in S.A. No. 1373 of 1967 on the tax liability.

Detailed Analysis:

1. Validity of Assessment Orders on the Receiver:
The plaintiff contended that the assessment orders on the receiver were illegal, ultra vires, and without jurisdiction, as assessments post the death of S. M. Sheriff should have been made on the legal representatives, not the receiver. The trial court found the assessments valid, but the lower appellate court disagreed, holding that the receiver was not a legal representative and thus the assessments were null and void.

2. Jurisdiction and Legality of Recovery Proceedings:
The plaintiff argued that she could not be considered an assessee in default, and thus recovery proceedings were invalid. The lower appellate court agreed, stating that without valid assessments, the plaintiff could not be an assessee in default, rendering Section 46(2) inapplicable. The trial court, however, had found the recovery proceedings valid.

3. Compliance with Procedural Requirements under the Revenue Recovery Act:
The plaintiff questioned the sale's validity due to non-compliance with Sections 25, 27, and 36 of the Revenue Recovery Act. The lower appellate court found significant procedural lapses, including lack of proper notice and publication, invalidating the sale. The trial court had dismissed these claims, finding the sale valid.

4. Bar of Suit under Section 67 of the Indian Income-tax Act, 1922:
The main defense was that Section 67 barred the suit. The lower appellate court held that since the assessments were void, the plaintiff was not an assessee, and thus Section 67 did not apply. The trial court had not found the suit barred.

5. Limitation Period for Recovery Proceedings:
The lower appellate court found that the certificates under Section 46(2) were issued beyond the prescribed period, thus barring the recovery proceedings. The trial court had not found any issue with the timing of the certificates.

6. Validity of the Auction Sale of the Properties:
The lower appellate court invalidated the sale due to procedural non-compliance and the invalidity of the recovery proceedings. The trial court had upheld the sale's validity.

7. Impact of the Compromise in S.A. No. 1373 of 1967 on the Tax Liability:
The plaintiff argued that a compromise in another case should be deemed to have wiped out the tax liability. The lower appellate court overruled this, noting the compromise only relinquished the department's right to proceed against specific properties, not the entire debt.

Conclusion:
The second appeal was dismissed, upholding the lower appellate court's findings. The court concluded that the sale was invalid due to procedural lapses and the invalidity of the recovery proceedings. However, the court did not provide a declaration on the validity of the assessment orders, only granting an injunction against confirming the sale. The plaintiff's remedies regarding the auction money deposited with the Collector were left to be pursued separately. No costs were awarded.

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