Auction sale validity under tax recovery rules upheld where notice was given and no material irregularity was shown.

An auction proclamation and sale of immovable property under the Second Schedule to the Income-tax Act were challenged for alleged non-disclosure of reserve price and non-compliance with the prescribed sale procedure. The Madras High Court found no violation of Rule 53(b), noting that the auction notice allowed inspection of terms and conditions from the department office or website, the defaulter had been given notice before proclamation, and no material irregularity in the sale process was shown. It also noted that the property was under third-party occupation, earlier auction attempts had failed, and the sale proceeds were to be adjusted against tax and related liabilities. The challenge failed and the sale was treated as valid.

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Issues: Whether the auction proclamation and sale of immovable property under the Second Schedule to the Income-tax Act, 1961 were liable to be quashed for non-disclosure of reserve price and alleged non-compliance with the prescribed sale procedure.

Analysis: The auction notice stated that the terms and conditions could be obtained from the department office or downloaded from its website, and the proclamation was preceded by notice to the defaulter. The Court found no violation of Rule 53(b), which requires due notice and a fair specification of reserve price, if any. It further noted that the property had been under occupation of a third party and earlier auction attempts had failed, while the petitioner had not shown any material irregularity in the conduct of the sale. The sale proceeds were also to be adjusted against the petitioner's tax and related liabilities, and the purchaser had undertaken to discharge remaining dues.

Conclusion: The challenge to the auction proceedings failed and the sale was held to be valid; the writ petition was dismissed.

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