Where an assessee dies before the issue of the certificate, unless his legal representatives are served with a notice of demand under section 156 and they fail to comply with that notice within 30 days from the date of receipt of the notice, they cannot be said to be “assessee in default” and consequently no recovery proceedings can be taken against them. [Satya Pal Verma vs. ITO, 106 ITR 540 (All) : Bai Chandanben Jivanlal vs. I. D. Joshi, Collector, 74 ITR 448, (Guj)]
A recovery certificate issued or drawn up by Tax Recovery Officer against a person who is already dead, is a nullity. The certificate must be against a defaulter who is alive. [Isha Beevi vs. TRO, 80 ITR 82, (Ker) on appeal 101 ITR 449, (SC)]. If an assessee in default dies before the issue of a certificate in his name, proceedings under Section 159 of the Act are necessary to bring on record the name or names of the legal representative or representatives.
If any part of the property of an applicant is illegally or unjustifiably attached, an objection under rule 11(1) of the second Schedule to the Act may be filed by him before the Tax Recovery Officer who has got the jurisdiction to adjudicate upon it.
Rule 58(a) of the Order XXI of C.P.C. provides that the claim should be preferred before the property so attached is sold.
Where a claim or objection is made under rule 11 against attachment of a property in execution of a recovery certificate, it is the bounden duty of the Tax Recovery Officer to first dispose of the objection and then to proceed further. Investigation of a claim properly filed is essential. Even if the property to which the claim or objection applies has been advertised for sale, the Tax Recovery Officer ordering the sale may postpone it, pending such investigation.
Where a claim or an objection preferred under rule 11(1) of the Second Schedule is rejected or dismissed, the party against whom an order rejecting or dismissing the claim or objection is made may institute a suit, under rule 11(6), in a Civil Court to establish the right which he claims to the property. In Sawai Singhai vs. Union of India (AIR) 1966 SC 1968), the Supreme Court observed that the suit brought under Order 21, rule 63 (corresponding to rule 11 (6) of the Second Schedule), concerns not only with the question of possession but also with the question of title.
As per the second proviso if such appeal is not so disposed of within the period specified in first proviso, the stay order shall stand vacated after the expiry of the said period.
In view of the specific language of the aforesaid second proviso, it is not only desirable but imperative on the part of the assessee to file an application for extension of the stay or granting of fresh stay, well in time before the expiry of the impugned six months period.
2. Every application shall be neatly typed on one side of the paper and shall be in English and shall setforth concisely the following:
A specimen Stay Petition
Appendix – X
* Separate sheet may be used if space is not sufficient
The humble application of the petitioner above named most respectfully sheweth:
I, the Director of CITC Ltd., state that whatever is stated hereinabove in the Stay Petition is true to the best of my knowledge and information.
I, S. S. K., Director of CITC Ltd., having office at Andheri (West) Bombay – 400 058, do hereby on solomn affirmation state as under:
I say that whatever is stated hereinabove and in the Stay Petition of even date is true to the best of my knowledge and believe the same to be true.
Solemnly affirmed at Bombay on the 27th day of April, 1999.