Rule 68B limitation for tax recovery sale upheld; later status change did not defeat attachment rights.

Rule 68B of the Second Schedule governs sale of attached immovable property by reference to the date the tax demand becomes final, and the statutory provisos permit extension where the prescribed conditions for resale are met. On the stated facts, the attachment and sale steps were taken within time, the auction failed for want of bidders, and the extension up to 31.03.2022 was consistent with the rule. A later claim of exemption from attachment and sale under Rule 10 read with Section 60 CPC also failed because recovery rights had already accrued when the liability was confirmed, and a subsequent change in occupation did not defeat the attachment.

---

---

Issues: (i) Whether the limitation for sale of the attached immovable property had expired under Rule 68B of the Second Schedule to the Income-tax Act, 1961, and whether the period could be extended by one year under the proviso; (ii) Whether the petitioner was entitled to exemption from attachment and sale under Rule 10 of the Second Schedule read with Section 60 of the Code of Civil Procedure, 1908.

Issue (i): Whether the limitation for sale of the attached immovable property had expired under Rule 68B of the Second Schedule to the Income-tax Act, 1961, and whether the period could be extended by one year under the proviso.

Analysis: The assessment and penalty orders had attained finality, and the recovery proceedings were governed by Rule 68B, which restricts sale of immovable property after the prescribed period from the end of the financial year in which the demand becomes final. On the facts, the property was attached and sale proceedings were initiated before expiry of the relevant period. The auction held on 25.03.2021 fetched no bidders, bringing the case within the second proviso to Rule 68B, which permits extension by one year where resale is required because the highest bid is less than the reserve price. The extension granted for sale up to 31.03.2022 was therefore consistent with the statutory scheme.

Conclusion: The challenge based on limitation failed, and the extension of time for sale was upheld.

Issue (ii): Whether the petitioner was entitled to exemption from attachment and sale under Rule 10 of the Second Schedule read with Section 60 of the Code of Civil Procedure, 1908.

Analysis: The claim of exemption depended on the petitioner's status at the time the assessment and penalty liabilities arose, not on a later change in occupation. The recovery right had already accrued to the Department when the liability stood confirmed, and a subsequent assertion that the petitioner was a labourer could not defeat the attachment. The materials relied upon by the Department also negatived the plea that the petitioner was within the protected class claimed for exemption.

Conclusion: The claim for exemption from attachment and sale was rejected.

Final Conclusion: The impugned recovery action was held to be within time and not hit by the exemption plea, so the writ petition was dismissed.

Ratio Decidendi: For recovery of tax arrears, the limitation for sale of attached immovable property under Rule 68B must be computed according to the finality of the demand, and the statutory provisos governing extension operate where the prescribed conditions are met; a later change in the assessee's status does not nullify recovery rights already accrued.

---