Priority as regards recovery of taxes:

Any claim in regard to any property in relation to which a notice under this section is issued, shall be void as against any demand contained therein. Where a person, on whom a notice (garnishee order) under thi s section has been served, objects on oath that the amount demanded from him is not due to the assessee or that he does not hold any money for or on behalf of the assessee, he cannot be compelled by the Assessing Officer to make the payment. But if it is later on found that such a statement made by him was false, he would personally become liable to pay the amount to the extent of his own liability to the assessee or to the extent of the assessee‘s liability, which ever is less. Such personal liability would arise even in cases where the person in receipt of a notice from the Assessing Officer makes a payment in disregard of the notice served on him.

Moneys belonging to the assessee in default which are in the custody of a Court or Receiver are also liable for attachment. Further, on being authorised by the Commissioner, the Assessing Officer is also empowered to recover the tax by distraint and sale of movable property as laid down in the Third Schedule. For details, students may refer to the Third Schedule in the Act. In addition, tax may be recovered, through the State Government if the recovery of tax in any area has been entrusted to it under the Constitution. In such a case the State Government may direct that the tax shall be recovered in respect of any particular area together with the municipal taxes or local rates by municipality or local authority [Section 227].