Income-tax recovery certificates must be timely forwarded; mandatory revenue sale formalities are strictly enforced to sustain jurisdiction and validity.

Recovery of income-tax arrears under section 46(2) depended on the certificate being forwarded within the limitation period in section 46(7); where timely forwarding was not proved, the Collector had no jurisdiction to proceed. Revenue sale proceedings under the Tamil Nadu Revenue Recovery Act also required strict compliance with demand service, attachment publication and sale notice formalities, and defects in those mandatory steps rendered the sale invalid. A challenge to the sale was not barred by limitation where the suit was brought before confirmation of sale and the cause of action had arisen from the sale process itself. The note states that these defects could not sustain the recovery or sale.

---

---

Issues: (i) Whether the certificate for recovery of income-tax arrears was issued and forwarded within the period prescribed by section 46(7) of the Indian Income-tax Act, 1922, so as to confer jurisdiction on the Collector; (ii) Whether the revenue sale was invalid for non-compliance with the mandatory requirements of sections 25, 27 and 36 of the Tamil Nadu Revenue Recovery Act (II of 1864); (iii) Whether the suit to challenge the sale was barred by limitation under section 59 of the Tamil Nadu Revenue Recovery Act (II of 1864).

Issue (i): Whether the certificate for recovery of income-tax arrears was issued and forwarded within the period prescribed by section 46(7) of the Indian Income-tax Act, 1922, so as to confer jurisdiction on the Collector.

Analysis: The statutory scheme under section 46(2) required the Income-tax Officer to forward a certificate to the Collector, and section 46(7) barred recovery proceedings commenced after one year from the last day of the financial year in which the demand was made. The evidence did not establish that the certificates for either assessment year were issued or forwarded within time. Recovery proceedings commence when the certificate is forwarded, and proof of timely forwarding is essential to jurisdiction.

Conclusion: The recovery proceedings were barred by limitation and the Collector lacked jurisdiction to proceed on the basis of the certificates.

Issue (ii): Whether the revenue sale was invalid for non-compliance with the mandatory requirements of sections 25, 27 and 36 of the Tamil Nadu Revenue Recovery Act (II of 1864).

Analysis: The Act required service of demand, proper attachment notice and publication, and a sale notice specifying the time, place and conditions of sale. The findings showed absence of proof of service of demand, no Gazette publication of attachment, and material defects in the sale proclamation and its mode of publication. These were mandatory requirements and the defects went to the root of the sale process.

Conclusion: The revenue sale was invalid.

Issue (iii): Whether the suit to challenge the sale was barred by limitation under section 59 of the Tamil Nadu Revenue Recovery Act (II of 1864).

Analysis: In a challenge to a sale under the Revenue Recovery Act, the cause of action arises from the sale or confirmation of sale, not merely from the earlier demand. The suit had been instituted when the plaintiff was contesting the threatened sale and before confirmation, so the statutory bar of limitation did not apply.

Conclusion: The suit was not barred by limitation.

Final Conclusion: The assessment validity question was left undecided, but the tax recovery proceedings and the sale could not be sustained, so the plaintiff obtained injunctive relief and the appeal failed.

Ratio Decidendi: For recovery of income-tax arrears under section 46(2), the certificate must be forwarded within the limitation period, and in revenue recovery proceedings mandatory statutory notice and sale formalities must be strictly complied with; otherwise the recovery and sale are without jurisdiction and invalid.

---