TaxTMI 
TaxTMI 
Procedure For Recovery of Tax
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.... requiring the defaulter to pay the amount specified in the certificate within fifteen days from the date of service of the notice and intimating that in default steps would be taken to realise the amount under this Schedule. When certificate may be executed. 3. No step in execution of a certificate shall be taken until the period of fifteen days has elapsed since the date of the service of the notice required by the preceding rule : Provided that, if the Tax Recovery Officer is satisfied that the defaulter is likely to conceal, remove or dispose of the whole or any part of such of his movable property as would be liable to attachment in execution of a decree of a civil court and that the realisation of the amount of the certificate would in consequence be delayed or obstructed, he may at any time direct, for reasons to be recorded in writing, an attachment of the whole or any part of such property: Provided further that if the defaulter whose property has been so attached furnishes security to the satisfaction of the Tax Recovery Officer, such attachment shall be cancelled from the date on which such security is accepted by the Tax Recovery Officer. Mode of recovery. 4. If t....
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....liable to satisfy a claim of such third person against the real owner. 4 [Disposal of proceeds of execution. 8. (1) Whenever assets are realised by sale or otherwise in execution of a certificate, the proceeds shall be disposed of in the following manner, namely : (a) they shall first be adjusted towards the amount due under the certificate in execution of which the assets were realised and the costs incurred in the course of such execution; (b) if there remains a balance after the adjustment referred to in clause (a), the same shall be utilised for satisfaction of any other amount recoverable from the assessee under this Act which may be due on the date on which the assets were realised; and (c) the balance, if any, remaining after the adjustments under clauses (a) and (b) shall be paid to the defaulter. (2) If the defaulter disputes any adjustment under clause (b) of sub-rule (1), the Tax Recovery Officer shall determine the dispute.] General bar to jurisdiction of civil courts, save where fraud alleged. 9. Except as otherwise expressly provided in this Act, every question arising between the 5[Tax Recovery] Officer and the defaulter or their represen....
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....t on account of or in trust for some other person, or partly on his own account and partly on account of some other person, the Tax Recovery Officer shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or sale. (5) Where the Tax Recovery Officer is satisfied that the property was, at the said date, in the possession of the defaulter as his own property and not on account of any other person, or was in the possession of some other person in trust for him, or in the occupancy of a tenant or other person paying rent to him, the Tax Recovery Officer shall disallow the claim. (6) Where a claim or an objection is preferred, the party against whom an order is made may institute a suit in a civil court to establish the right which he claims to the property in dispute; but, subject to the result of such suit (if any), the order of the Tax Recovery Officer shall be conclusive. Removal of attachment on satisfaction or cancellation of certificate. 12. Where- (a) the amount due, with costs and all charges and expenses resulting from the attachment of any property or incurred in order to hold a sale, are paid to the Tax Recovery Offic....
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....onging to him except with the permission of the Tax Recovery Officer, nor shall any civil court issue any process against such property in execution of a decree for the payment of money. (2) Where an attachment has been made under this Schedule, any private transfer or delivery of the property attached or of any interest therein and any payment to the defaulter of any debt, dividend or other moneys contrary to such attachment, shall be void as against all claims enforceable under the attachment. Prohibition against bidding or purchase by officer. 17. No officer or other person having any duty to perform in connection with any sale under this Schedule shall, either directly or indirectly, bid for, acquire or attempt to acquire any interest in the property sold. Prohibition against sale on holidays. 18. No sale under this Schedule shall take place on a Sunday or other general holiday recognised by the State Government or on any day which has been notified by the State Government to be a local holiday for the area in which the sale is to take place. Assistance by police. 19. Any officer authorised to attach or sell any property or to arrest the defaulter or charged with any dut....
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....another copy on the outer door or on some other conspicuous part of the house in which the defaulter ordinarily resides, or with the leave of the Tax Recovery Officer, on the outer door or on some other conspicuous part of the house in which he carries on business or personally works for gain, or in which he is known to have last resided or carried on business or personally worked for gain. The produce shall, thereupon, be deemed to have passed into the possession of the Tax Recovery Officer. Provisions as to agricultural produce under attachment. 25. (1) Where agricultural produce is attached, the Tax Recovery Officer shall make such arrangements for the custody, watching, tending, cutting and gathering thereof as he may deem sufficient; 10[and he shall have power to defray the cost of such arrangements]. (2) Subject to such conditions as may be imposed by the Tax Recovery Officer in this behalf, either in the order of attachment or in any subsequent order, the defaulter may tend, cut, gather and store the produce and do any other act necessary for maturing or preserving it; and, if the defaulter fails to do all or any of such acts, any person appointed by the Tax Recovery Offi....
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.... Attachment of decree. 27. (1) The attachment of a decree of a civil court for the payment of money or for sale in enforcement of a mortgage or charge shall be made by the issue to the civil court of a notice requesting the civil court to stay the execution of the decree unless and until (i) the Tax Recovery Officer cancels the notice, or (ii) the 11[Tax Recovery] Officer or the defaulter applies to the court receiving such notice to execute the decree. (2) Where a civil court receives an application under clause (ii) of sub-rule (1), it shall, on the application of the 12[Tax Recovery] Officer or the defaulter and subject to the provisions of the Code of Civil Procedure, 1908 (5 of 1908), proceed to execute the attached decree and apply the net proceeds in satisfaction of the certificate. (3) The 13[Tax Recovery] Officer shall be deemed to be the representative of the holder of the attached decree, and to be entitled to execute such attached decree in any manner lawful for the holder thereof. Share in movable property. 28. Where the property to be attached consists of the share or interest of the defaulter in movable property belonging to him and another as c....
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.... directed, to purchase the same. Inventory. 33. In the case of attachment of movable property by actual seizure, the officer shall, after attachment of the property, prepare an inventory of all the property attached, specifying in it the place where it is lodged or kept, and shall forward the same to the Tax Recovery Officer and a copy of the inventory shall be delivered by the officer to the defaulter. Attachment not to be excessive. 34. The attachment by seizure shall not be excessive, that is to say, the property attached shall be as nearly as possible proportionate to the amount specified in the warrant. Seizure between sunrise and sunset. 35. Attachment by seizure shall be made after sunrise and before sunset and not otherwise. Power to break open doors, etc. 36. The officer may break open any inner or outer door or window of any building and enter any building in order to seize any movable property if the officer has reasonable grounds to believe that such building contains movable property liable to seizure under the warrant and the officer has notified his authority and intention of breaking open if admission is not given. He shall, however, give all reasonable oppo....
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....) the owner of the produce, or a person authorised to act on his behalf, applies to have the sale postponed till the next day or, if a market is held at the place of sale, the next market day, the sale shall be postponed accordingly, and shall be then completed, whatever price may be offered for the produce. Special provisions relating to growing crops. 42. (1) Where the property to be sold is a growing crop and the crop from its nature admits of being stored but has not yet been stored, the day of the sale shall be so fixed as to admit of the crop being made ready for storing before the arrival of such day, and the sale shall not be held until the crop has been cut or gathered and is ready for storing. (2) Where the crop from its nature does not admit of being stored or can be sold to a greater advantage in an unripe stage (e.g., as green wheat), it may be sold before it is cut and gathered, and the purchaser shall be entitled to enter on the land, and to do all that is necessary for the purpose of tending or cutting or gathering the crop. Sale to be by auction. 43. The property shall be sold by public auction in one or more lots as the officer may consider advisable, ....
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....way and prohibiting all persons from taking any benefit under such transfer or charge. Service of notice of attachment. 49. A copy of the order of attachment shall be served on the defaulter. Proclamation of attachment. 50. The order of attachment shall be proclaimed at some place on or adjacent to the property attached by beat of drum or other customary mode, and a copy of the order shall be affixed on a conspicuous part of the property and on the notice board of the office of the Tax Recovery Officer. Attachment to relate back from the date of service of notice. 51. Where any immovable property is attached under this Schedule, the attachment shall relate back to, and take effect from, the date on which the notice to pay the arrears, issued under this Schedule, was served upon the defaulter. Sale Sale and proclamation of sale. 52. (1) The Tax Recovery Officer may direct that any immovable property which has been attached, or such portion thereof as may seem necessary to satisfy the certificate, shall be sold. (2) Where any immovable property is ordered to be sold, the Tax Recovery Officer shall cause a proclamation of the intended sale to be made in the language of ....
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....t of twenty-five per cent on the amount of his purchase money, to the officer conducting the sale; and, in default of such deposit, the property shall forthwith be resold. (2) The full amount of purchase money payable shall be paid by the purchaser to the Tax Recovery Officer on or before the fifteenth day from the date of the sale of the property. Procedure in default of payment. 58. In default of payment within the period mentioned in the preceding rule, the deposit may, if the Tax Recovery Officer thinks fit, after defraying the expenses of the sale, be forfeited to the Government, and the property shall be resold, and the defaulting purchaser shall forfeit all claims to the property or to any part of the sum for which it may subsequently be sold. Authority to bid. 59. 20[(1) Where the sale of a property, for which a reserve price has been specified under clause (cc) of rule 53, has been postponed for want of a bid of an amount not less than such reserve price, it shall be lawful for an 21[Assessing] Officer, if so authorised by the 22[60[Principal Chief Commissioner or] Chief Commissioner or 60[Principal Commissioner or] Commissioner] in this behalf, to bid for the p....
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....ishing or conducting the sale: Provided that (a) no sale shall be set aside on any such ground unless the Tax Recovery Officer is satisfied that the applicant has sustained substantial injury by reason of the non-service or irregularity; and (b) an application made by a defaulter under this rule shall be disallowed unless the applicant deposits the amount recoverable from him in the execution of the certificate. Setting aside sale where defaulter has no saleable interest. 62. At any time within thirty days of the sale, the purchaser may apply to the Tax Recovery Officer to set aside the sale on the ground that the defaulter had no saleable interest in the property sold. Confirmation of sale. 63. (1) Where no application is made for setting aside the sale under the foregoing rules or where such an application is made and disallowed by the Tax Recovery Officer, the Tax Recovery Officer shall (if the full amount of the purchase money has been paid) make an order confirming the sale, and, thereupon, the sale shall become absolute. (2) Where such application is made and allowed, and where, in the case of an application made to set aside the sale on deposit of the a....
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....Bid of co-sharer to have preference. 68. Where the property sold is a share of undivided immovable property, and two or more persons, of whom one is a co-sharer, respectively bid the same sum for such property or for any lot, the bid shall be deemed to be the bid of the co-sharer. 29[Acceptance of property in satisfaction of amount due from the defaulter. 68A. (1) Without prejudice to the provisions contained in this Part, an 30[Assessing] Officer, duly authorised by the 31[60[Principal Chief Commissioner or] Chief Commissioner or 60[Principal Commissioner or] Commissioner] in this behalf, may accept in satisfaction of the whole or any part of the amount due from the defaulter the property, the sale of which has been postponed for the reason mentioned in sub-rule (1) of rule 59, at such price as may be agreed upon between the 32[Assessing] Officer and the defaulter. (2) Where any property is accepted under sub-rule (1), the defaulter shall deliver possession of such property to the 33[Assessing] Officer and on the date the possession of the property is delivered to the 34[Assessing] Officer, the property shall vest in the Central Government and the Central Government....
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.... stay was received by the jurisdictional Principal Commissioner or Commissioner; or] (iii) commencing from the date of the presentation of any appeal against the order passed by the Tax Recovery Officer under this Schedule and ending on the day the appeal is decided, shall be excluded : Provided that where immediately after the exclusion of the aforesaid period, the period of limitation for the sale of the immovable property is less than 180 days, such remaining period shall be extended to 180 days and the aforesaid period of limitation shall be deemed to be extended accordingly. (3) Where any immovable property has been attached under this Part before the 1st day of June, 1992, and the order giving rise to a demand of any tax, interest, fine, penalty or any other sum, for the recovery of which the immovable property has been attached, has also become conclusive or final before the said date, that date shall be deemed to be the date on which the said order has become conclusive or, as the case may be, final. (4) Where the sale of immovable property is not made in accordance with the provisions of sub-rule (1), the attachment order in relation to the said property shall ....
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....riting, is satisfied (a) that the defaulter, with the object or effect of obstructing the execution of the certificate, has, after 40[the drawing up of the certificate by the Tax Recovery Officer], dishonestly transferred, concealed, or removed any part of his property, or (b) that the defaulter has, or has had since 41[the drawing up of the certificate by the Tax Recovery Officer], the means to pay the arrears or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same. (2) Notwithstanding anything contained in sub-rule (1), a warrant for the arrest of the defaulter may be issued by the Tax Recovery Officer if the Tax Recovery Officer is satisfied, by affidavit or otherwise, that with the object or effect of delaying the execution of the certificate, the defaulter is likely to abscond or leave the local limits of the jurisdiction of the Tax Recovery Officer. (3) Where appearance is not made in obedience to a notice issued and served under sub-rule (1), the Tax Recovery Officer may issue a warrant for the arrest of the defaulter. 42[(3A) A warrant of arrest issued by a Tax Recovery Officer under sub-rule (2) or sub-rule (3....
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....tion of a certificate may be so detained, (a) where the certificate is for a demand of an amount exceeding two hundred and fifty rupeesfor a period of six months, and (b) in any other casefor a period of six weeks: Provided that he shall be released from such detention (i) on the amount mentioned in the warrant for his detention being paid to the officer-in-charge of the civil prison, or 47[(ii) on the request of the Tax Recovery Officer on any ground other than the grounds mentioned in rules 78 and 79.] 48[***] (2) A defaulter released from detention under this rule shall not, merely by reason of his release, be discharged from his liability for the arrears; but he shall not be liable to be rearrested under the certificate in execution of which he was detained in the civil prison. Release. 78. (1) The Tax Recovery Officer may order the release of a defaulter who has been arrested in execution of a certificate upon being satisfied that he has disclosed the whole of his property and has placed it at the disposal of the Tax Recovery Officer and that he has not committed any act of bad faith. (2) If the Tax Recovery Officer has ground for believin....
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....ssioner or] Chief Commissioner or 60[Principal Commissioner or] Commissioner], Tax Recovery Officer or other officer acting under this Schedule shall, in the discharge of his functions under this Schedule, be deemed to be acting judicially within the meaning of the Judicial Officers Protection Act, 1850 (18 of 1850). Power to take evidence. 83. Every 50[60[Principal Chief Commissioner or] Chief Commissioner or 60[Principal Commissioner or] Commissioner], Tax Recovery Officer or other officer acting under the provisions of this Schedule shall have the powers of a civil court while trying a suit for the purpose of receiving evidence, administering oaths, enforcing the attendance of witnesses and compelling the production of documents. Continuance of certificate. 84. No certificate shall cease to be in force by reason of the death of the defaulter. Procedure on death of defaulter. 85. 51[If at any time after the certificate is drawn up by the Tax Recovery Officer] the defaulter dies, the proceedings under this Schedule (except arrest and detention) may be continued against the legal representative of the defaulter, and the provisions of this Schedule shall apply as i....
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....count of any sum so payable. Forms. 91. The Board may prescribe the form to be used for any order, notice, warrant, or certificate to be issued under this Schedule. Power to make rules. 92. (1) The Board may make rules, consistent with the provisions of this Act, regulating the procedure to be followed by 56[60[Principal Chief Commissioner,] Chief Commissioner, 60[Principal Commissioner,] Commissioner], Tax Recovery Officers and other officers acting under this Schedule. (2) In particular, and without prejudice to the generality of the power conferred by sub-rule (1), such rules may provide for all or any of the following matters, namely: (a) the area within which 57[60[Principal Chief Commissioner,] Chief Commissioner, 60[Principal Commissioner,] Commissioner] or Tax Recovery Officers may exercise jurisdiction; (b) the manner in which any property sold under this Schedule may be delivered; (c) the execution of a document or the endorsement of a negotiable instrument or a share in a corporation, by or on behalf of the Tax Recovery Officer, where such execution or endorsement is required to transfer such negotiable instrument or share to a pe....
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....-1989. Earlier, rule 8 was amended by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1988. 5. Substituted for "Assessing" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 6. Words "duty filed under this Act" omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 7. Substituted for "Assessing" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 8. Substituted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Prior to its substitution, rule 19A was inserted by the Finance Act, 1963, w.r.e.f. 1-4-1962 and later on amended by the Taxtion Laws (Amendment) Act, 1-10- 1975. 9. Substituted for "Deputy" by the Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. 10. Substituted for "and the Assessing Officer shall bear sum as the Tax Recovery officer shall require in order to defray the cost of such arrangement" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 11. Substituted for "Assessing" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 12. Substituted for "Assessing" by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 13. Substituted for "Assessing" by the Direct Tax Laws (....
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....ncome-tax" by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f 1-4-1988. 33. Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1989 w.r.e.f. 1-4-1988. 34. Substituted for "Income-tax", by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988. 35. Substituted for "Income-tax", by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988. 36. Substituted for "Income-tax", by the Direct Tax Laws (Amendment) Act, 1989, w.r.e.f. 1-4-1988. 37. Substituted for "eight" by the Taxation Laws (Amendment) Act, 2003, w.e.f. 8-9-2003. Earlier "eight" was substituted for "nine" by the Finance Act, 2002, w.e.f. 1-16-2002 and "nine" was substituted for "twelve" by the Finance Act, 2001, w.e.f. 1-6-2001. 38. Substituted for "37[six] per cent per annum" by the Finance Act, 2007, w.e.f. 1-4-2008. 39. Inserted by the Finance Act, 1992, w.e.f. 1-6-1992. 40. Substituted for "the receipt of the certificate in the office of the Tax Recovery Officer" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 41. Substituted for "the receipt of the certificate in the office of the Tax Recovery Officer" by the Direct Tax Laws (Amendment) Act, 1987, ....