PART I
Preliminary
1. Short title and commencement
(1) These Rules may be called the Karnataka Tax on Professions, Trades, Callings and Employments Rules, 1976.
(2) They shall be deemed to have come into force on the First day of April, 1976.
2. Definitions
(1) In these Rules unless the context otherwise requires
(a) “Act” means the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976;
(b) “Form” means a form appended to these Rules;
( c) “Place of work” in relation to a person or employer, means the place where such person or employer ordinarily carries on his profession, trade, calling or employment;
(d) “Section” means a section of the Ad;
(e) “Treasury” means the treasury of the District, the Taluk or Sub-Taluk and includes the Reserve Bank of. India or any of its agency Banks in places where the cash transactions of the Government are handed by the Reserve Bank or any of its agency Banks.
(2) The terms not defined in these rules shall have the meaning assigned to them in the Act.
PART II
Registration and Enrolment
3. Grant of certificate of registration
(1) An application for a certificate of registration under sub-section (1) of Section 5 shall be made in Form-1. An employer having places of work within the jurisdiction of different assessing authorities shall make an application for registration separately to each such authority in respect of his place of work within the jurisdiction of that authority:
Provided that in respect of an industrial undertaking, whose project is approved either by the State High Level Clearance Committee or State Level Single Window Clearance Committee or District Level Single Window Committee, a combined application forms in Form 1-A may be submitted.
Provided further that any assessee having more than one place of work coming within the jurisdiction of different assessing authorities may make a single application in respect of all such places to the assessing authority having jurisdiction over his principal place of work.
(2) (a) On receipt of an application for a certificate of registration, the assessing authority shall grant to the applicant a certificate of registration in Form-3 if it is satisfied that the application is in order and the necessary particulars have been furnished by the applicant.
(b) If the assessing authority finds that the application is not order or that all the particulars necessary for issue of the certificate of registration have not been furnished, it shall direct the applicant to file a revised application or furnish such additional information, as it may consider necessary.
After considering the revised application or the additional information, the assessing authority shall grant a certificate of registration in Form-3.
4. Grant of certificate of enrolment
(1) An application for a certificate of enrolment under sub-section (2) of Section 5 shall be made in Form-2. A person having more than one place of work in the State of Karnataka, whether within the jurisdiction of the assessing authority or outside such jurisdiction, shall be granted only one certificate of enrolment:
Provided that in respect of an industrial undertaking whose project is approved either by the State High Level Clearance Committee or State Level Single Window Clearance Committee or District Level Single Window Committee, a combined application form in Form 1-A may be submitted.
(2) Where the person has more than one place of work within the State of Karnataka, he shall make a single application in respect of all such places, name in such application one of such place as the principal place of work for the purposes of these rules and submit such application to the assessing authority in whose jurisdiction the said principal place of work is situated.
(3) On receipt of an application in Form-2, the assessing authority may call upon the person to furnish such additional information or evidence as may be necessary for determining the amount of tax payable by him according to the Schedule to the Act.
(4) After considering the application and such additional information or evidence as may be furnished, the assessing authority shall grant a certificate of enrolment in Form-4.
(5) Where the person has more than one place of work in the State, as many copies of the certificate shall be issued to him as there are places of work, in addition to the principal place of work.
5. Amendment of certificate of registration
Where the holder of a certificate of registration granted under Rule 3 desires the certificate to be amended, he shall submit an application for this purpose to the assessing authority setting out the specific matters in respect of which he desires such amendment and reasons therefor, together with the certificate of registration, and such authority may, if satisfied with the reasons given, make such amendments as it thinks necessary in the certificate of registration.
6. Amendment of certificate of enrolment
(1) The certificate of enrolment granted under Rule 4 shall remain valid so long as it is not cancelled under sub-rule (2) of Rule 7.
(2) An application for a revised certificate of enrolment shall be made in Form-2. On receipt of such application the assessing authority may call upon the applicant to furnish such additional information in evidence as may be necessary for determining the amount of tax payable by him according to the Schedule to the Act and after so determining the amount of tax payable by the applicant, the assessing authority shall make necessary amendments, in the certificate of enrolment under his dated signature indicating the year from which the tax at the revised rate shall be payable.
7. Cancellation of certificate
(1) The certificate of registration granted under Rule 3 may be cancelled by the assessing authority after it has satisfied itself that the employer to whom such a certificate was granted has ceased to be an employer.
(2) The certificate of enrolment granted under Rule 4 may be cancelled by the assessing authority after it is satisfied that the enrolled person is dead or his liability to pay tax has ceased.
8. Exhibition of certificate
The holder of the certificate of registration or the certificate of enrolment, as the case may be, shall display conspicuously at his places of work the certificate of registration or the certificate of enrolment or a copy thereof.
9. Issue of duplicate copy of certificate
If a certificate of registration or a certificate of enrolment granted under these rules is lost, destroyed or defaced or becomes illegible, the holder of the certificate may apply along with a Court-fee stamp of rupee one to the assessing authority for the grant of a duplicate copy of such certificate. The said authority shall, after such verification as may be necessary, issue to the holder of the certificate a copy of the original certificate, after stamping thereon the words “duplicate copy”.
PART III
Returns, Notices and payment of tax
10. Commissioner to give a public notice
The Commissioner shall in the month of April every year give a publication in the newspapers directing all persons liable to pay tax under the Act to get themselves registered or enrolled as the case may be (unless they are already registered or enrolled), and to furnish returns and pay the tax according to the provisions of the Act and these rules.
11. Return and assessment
(1) The return under sub-section (1) of Section 6 shall be furnished in Form 5.
(2) Before an order of assessment is made under clause ( c) sub-section (2) or under sub-section (3) of Section 7, the assessee shall be afforded a reasonable opportunity of showing cause against such assessment and for this purpose he shall be served with a notice in Form 12.
11-A. Payment of tax in advance
The statement under sub-section (1) of Section 6-A shall be in Form 5-A and shall be sent in duplication to the assessing authority, within the time specified in Section 6-A.
12. Notice under Sections 5(6), 6(3) and 7(2)(a) or (3)
The notice under sub-section (6) of Section 5, under sub-section (3) of Section 6 or under clause (a) of sub-section (2) or sub-section (3) of Section 7, shall be issued by the assessing authority in Form-6.
13. Notice under Sections 5(5) and 12
The notice under sub-section (5) of Section 5 or under Section 12 shall be issued by the assessing authority in Form-7.
14. Notice of demand under Section 7(4) etc.
The notice of demand under sub-section (4) of Section 7 and other demands, including any penalty or interest imposed under the Act, shall be issued by the assessing authority in Form-8.
15. Payment of tax by employers
An employer shall make payment of tax and interest and penalty (if any) by deposit of the requisite amount in the treasury by Challan in Form-9 in quadruplicate. The copies marked 'Original' and 'Duplicate' shall be returned to the employer duly receipted, of which the copy marked `Duplicate' shall be submitted by the employer other than an officer referred to in Rule 16 to the assessing authority along with the return prescribed by Rule 11. An officer referred to in Rule 16 shall forward such receipted copies of challans marked 'Duplicate' to the assessing authority along with the statement prescribed in the said Rule.
16. Deduction of tax amount from the salary or wages of employees
(1) The drawing and disbursing officer in the case of non-gazetted Government servants and the treasury officer or the pay and accounts officer, as the case may be, in the case of gazetted Government servants, shall be responsible for the deduction of due amount of tax from the pay bill of the employees. The deduction shall be made every month, and the pay or wages of such an employee for the month of February shall not be permitted to be drawn unless the tax due for the period March to February or part thereof or from the month in which the employee has attracted liability to pay the tax to February, as the case may be, has been fully deducted and a statement showing such deduction has been enclosed with the pay bill. The drawing and disbursing officer or the treasury
officer, as the case may be, shall furnish to the assessing authority not later than the 30th April, a statement relating to the payment of salary made to the Government servants along with a certificate that the tax payable in respect of the employees for whom they drew or passed pay bill during the year immediately preceding has been deducted in accordance with the provisions of the Schedule to the Act. Such statement shall show the name of the employee, the details of salary drawn, the amount of tax deducted therefrom and the period to which the tax relates.
(2) Notwithstanding the provisions contained in Rule 15 and sub-rule (1), the liability of an employee to pay tax shall not cease until the due amount of tax in respect of his has been fully paid to the Government account, and without prejudice to the aforesaid provisions, the said amount may be recovered from him if the employer or the assessing authority is satisfied that the amount has not been deducted from his salary or wages.
16-A. Rounded off of tax, etc
The amount of tax including tax payable in advance, penalty or any other amount payable and the amount of refund due under the Act shall be rounded off to the nearest rupee and for this purpose, where such amount contains a part of a rupee consisting of a paise, then, if such part is fifty paise or more it shall be increased to one rupee and if such part is less than fifty paise it shall be ignored.
17. Collecting Agents to maintain an account of collection of tax, etc
Every Collecting Agent shall maintain proper accounts of the tax and other amounts collected by him under the Act. He shall also maintain a register in Form-22 in which he shall enter the tax and other amounts as and when collected.
18. Employer to keep account of deduction of tax from salary of the employees
Every employer liable to pay tax shall maintain a register in which shall be entered the amount of salary and wages paid to each of the persons in his employment and the said register shall contain a column in which shall be shown the amount deducted from the salary and wages of the employee on account of the tax.
19. Payment of tax filing of returns by enrolled persons 7and deduction of tax in the case of certain enrolled persons
(1) person enrolled under sub-section (2) of Section 5 and liable to pay tax shall make payment of tax within the period specified in sub-section (2) of Section 10 by paying the requisite amount into the treasury by challan in Form-9 in quadruplicate. The copies marked 'Original' and 'Duplicate' shall be returned to the person duly receipted of which the copy of marked 'Duplicate' shall be submitted by him to the assessing authority as proof of payment of tax:
Provided that the payment of tax may also be made in cash to the assessing authority or where the amount does not exceed rupees five hundred, to the Commercial Tax Inspector attached to the jurisdictional assessing authority. The receipts for such payments shall be issued in Form-23.
(2) Where payment of tax„ interest and penalty (if any) is required to be made to a Collecting Agent appointed under Section 15 such payment shall be made within such time as may be notified by means of a paying-in-slip duly filled, in Form-10 in duplicate.
(3) The Collecting Agent shall credit to the treasury by challan in Form-9 in quadruplicate on or before the 10th of each month the amount of tax, interest and penalty collected by him during the preceding month under sub-rule (2) and forward the receipted copy of the challan marked 'Duplicate' to such authority as may be specified by the Commissioner along with a statement of collection in Form-14 signed and verified by him.
(3-A) Every enrolled person liable to pay tax shall furnish to the assessing authority within the time limit as specified in sub-section (2) of Section I 0, a return in Form 4-A.
(4) The statement specified in sub-section (5) of Section 10 shall be in Form 24.
(5) (a) The certificate specified in sub-section (7) of. Section 10 shall be in Form 25 and shall be obtained by the person making deduction under sub-section (3) of Section 10 from the jurisdictional assessing authority on payment of one rupee per form.
(b) The certificate in Form 25 shall be issued within fifteen days from the end of the month in which deduction was made.
( c) Every such form so obtained by 11The person shall be kept by him in safe custody and he shall be personally responsible for the loss, destruction or theft of any such form or the loss of revenue to the Government, resulting directly or indirectly from such loss, destruction or theft.
(d) Every insurance company or bank or other financial institution issuing certificate in Form 25 shall maintain for each year separately an account showing the certificates issued, in Form 26.
(e) If any Form 25 is lost, destroyed or stolen, 12The person shall report the fact to the assessing authority within a week of such loss, destruction or theft and shall make appropriate entries in the register maintained in Form 26 and take such other steps including the furnishing of an indemnity bond and issue of public notice of the loss, destruction or theft as the assessing authority may direct.
(f) Any insurance company or bank or other financial institution who has obtained Form 25 shall not either directly or any other person, transfer the same to another person.
(g) As soon as a report is received from 13the person regarding the loss, destruction or theft of Form 25, the assessing authority shall, within ten days, report to the jurisdictional Joint Commissioner of Commercial. Taxes and also to take action to notify such loss, destruction or theft in the Official Gazette.
(h) The register maintained in Form 26 along with Form 25 shall be open for inspection by the assessing authority or any other officer empowered under Section 21.
(i) Any unused declaration form held in stock with 14a person shall be surrendered to the assessing authority on discontinuance of business by 15The person
PART III - A Filing of statements, returns and payments through Banks
19-A. Procedure to file statements, returns and payments through Banks
(1) The tax payable and any other amount due under Sections 3, 4, 5, 6, 6-A and any other provision of the Act read with Rules 11, 11-A, 15, 19 and any other Rule, may be paid into the State Bank of India or its associate Bank or any other Bank approved by the Reserve Bank of India and specified by the Government, in Form 9-A along with the prescribed statements and returns and subject to the stipulations specified under the relevant provisions of the Act and the Rules.
(2) Every payment made under the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976 or under the relevant rules into the State Bank of India or its associate Bank or any other Bank approved by the Reserve Bank of India and specified by the Government, shall be through a Challan in Form 9-A and the Challan may be obtained from the office of the Assessing Authority or the Bank.
(3) Challan in Form 9-A shall be filled up in quadruplicate and the copy marked “original” shall be returned to the dealer duly receipted as proof of payment, and copy marked as “duplicate” shall be sent to the Assessing Authority, and such copy marked as “triplicate” shall be sent to the Treasury by the Bank and the copy marked “quadruplicate” shall be retained by the bank.
PART IV - Appeals
20. Appeal to the Joint Commissioner
(1) Every appeal under Section 16 to the Joint Commissioner shall be in Form-18 and shall be verified in the manner specified therein.
(2) The appeal may be sent to the appellate authority by registered post or may be presented to the authority or to such other officer as the appellate authority may appoint in this behalf, by the appellant or by his authorised agent or a legal practitioner or an accountant or sales tax practitioner duly authorised by the appellant in writing.
21. Appeal to Appellate Tribunal
An appeal under Section 17 to the Tribunal shall be in Form-19 and shall be verified in the manner specified therein.
22. Appeal to the High Court
An appeal to the High Court under sub-section (4) of Section 18 shall be in Form-20 and shall be verified in the manner specified therein.
22-A. Revision petition to the High Court
(1) (a) Every petition under sub-section (1) of Section 18-A to the High Court shall be in Form-20-A and shall be verified in the manner specified therein;
(b) The petition shall be accompanied by a certified copy of the order of the Appellate Tribunal.
(2) Every application for review under sub-section (7) of Section 18-A to the High Court shall be in Form-20-B and shall be verified in the manner specified therein.
PART V - Miscellaneous
23. Action for default by an enrolled person
(1) If it comes to the notice of the assessing authority that a person enrolled under sub-section (2) of Section 5 has failed to pay the amount of tax due from him, in the manner laid down in Rule 19, he shall serve on that person a notice in Form-13 requiring him on a date specified in the notice, to attend in person or through an authorised representative for showing cause regarding non-payment of tax. After giving such a person a reasonable opportunity of being heard and after holding such inquiry as may be deemed fit, or otherwise, if the assessing authority is satisfied that the tax is payable but it has not been paid, that authority shall serve a notice of demand in Form-16 on that person or his representative to pay the amount within fifteen days of the receipt of the notice.
(2) If a person, liable to pay tax has wilfully failed to get himself enrolled, then without prejudice to the action that may be taken against him under sub-section (5) of Section 5, the assessing authority shall after giving that person a reasonable opportunity of being heard and after such inquiry, as may be deemed fit, or otherwise, assess the tax due to the best of its Judgment and serve on him a notice of demand in Form-17 to pay the tax within fifteen days of the receipt of the notice. Notice of hearing in such case shall be issued by the assessing authority in Form-11. The notice under sub-section (6) of Section 5 in respect of persons liable for enrolment shall also be in Form-11.
24. Notice under Section 8 or 9
Notice under Section 8 or 9 shall be issued in Form-14.
25. Treasury Officer to forward quadruplicate copies of Challans to the Government Computer Centre
The receipted copies of challans in Form-9 marked 'Quadruplicate' in respect of each month shall be forwarded by the officer-in-charge of the Treasury to the Government Computer Centre, Bangalore within the 15th of the succeeding month.
26. Shifting of place of work
(1) If the holder of a certificate of registration or a certificate of enrolment in one area shifts his place of work to another area, he shall within fifteen days of such shifting, give notice thereof to the assessing authority from whose office the certificate was issued, and shall, at the same time, send a copy of such notice to the assessing authority exercising jurisdiction over the area to which the place of work is being or has been shifted.
(2) With effect from the commencement of the month immediately succeeding that in which the notice is given, the assessing authority having jurisdiction over the area to which the place of work has been shifted shall exercise all powers and discharge all functions pertaining to the determination and recovery of tax, and matters ancillary thereto, in respect of the sender of such notice.
27. Service of notices
(1) Notices under the Act or the rules made thereunder may be served by any of the following methods, namely:—
(i) by delivering or tendering a copy of the notice to the addressee or any adult member of his family residing with him or to a person regularly employed by him; or
(ii) by Registered post:
Provided that, if upon an attempt having been made to serve any such notice by any of the above mentioned methods the authority under whose orders the notice was issued is satisfied that the addressee is keeping out of the way for the purpose of avoiding service or that, for any other reasons, the notice cannot be served by any of the above mentioned methods, the said authority shall order the service of the notice to be effected by affixing a copy thereof on some conspicuous part of the addressee's place of work or residence last notified by him and such service shall be deemed to have been made on the addressee personally.
(2) When the serving officer delivers or tenders a copy of the notice to the addressee personally or to any of the persons referred to in clause (i) of sub-rule (1), he shall require the signature of the person to whom the copy is so delivered or tendered to an acknowledgment of service endorsed on the original notice.
(3) When the notice is served by affixing a copy -thereof in accordance with the proviso to sub-rule (1), the serving officer shall return the original to the authority which issued. the notice with a report endorsed thereon or annexed thereto stating that he so affixed the copy, the circumstances under which he did so and the name and address of the person, if any, by whom the addressee's place of work or residence is or was located was identified and in whose presence the copy was affixed. The serving officer shall also obtain the signature or thumb impression of the person identifying the addressee's place of work or residence to his report.
(4) The authority under whose orders the notice was issued shall, on being satisfied from the report of the messenger or the postal acknowledgment or by taking such evidence as he deems proper that the notice has been served in accordance with this rule, record the fact and make an order to that effect.
(5) If the authority is not satisfied that the notice has been properly served, he may after recording an order to that effect, direct the issue of a fresh notice.
28. Grant of copies
(1) If any assessee wants to have a certified copy of a document filed by him or of an order concerning him passed by any authority, he shall make to the authority concerned an application bearing adhesive Court-fee stamp of the value of twenty-five paise for an ordinary copy or such stamp of the value of rupee one and twenty-five paise for a copy which he desires to be supplied within two days of his applying for the same.
(2) On receipt of the application, the said authority shall inform the applicant of the amount of Court-fee stamps required, under the provisions of sub-rule (3) for supply of the copy. After the requisite amount of Court-fee stamp is furnished by the applicant, the said authority shall cause a certified copy of the document or order to be prepared and granted to the applicant.
(3) Additional fee in the shape of Court-fee stamp shall be payable for the grant of copies at the rates given below:
(a) Copying fee for the first 200 words or less of the documents Seventy-five paise
(b) For every additional 100 words or fraction thereof Forty paise
28-A. Fee for clarification of rate of tax
(1) The fee payable for seeking clarifications under sub-section (2) of Section 14-A shall be one hundred rupees.
(2) The fee specified in sub-rule (1) shall be paid by way of Crossed Demand Draft drawn in favour of Commissioner of Profession Tax in Karnataka, Bangalore.
29. Refund of tax
Where the assessing authority receives an application for refund of tax under Section 22 he shall, if he is satisfied that a refund is due to the applicant in terms of the provisions of the said Section, record an order showing the amount of refund due and shall issue to the applicant a refund payment order in Form-21.
30. Offences and composition of offences
(1) The assessing authority may institute prosecution in respect of an offence specified in Section 23 in a Court, not inferior to that of a Magistrate of the First Class.
(2) The assessing authority shall exercise the powers specified in Section 26 in respect of such offence subject to the control and direction of the Joint Commissioner.
PART VI - Procedure for Recovery
31. Definitions
In this Part, unless the context otherwise requires.
(1) “Certificate” means a certificate of default of payment of tax received by the Tax Recovery Officer;
(2) “Defaulter” means the person named in the certificate;
(3) “Execution” in relation to a certificate, means recovery of arrears in pursuance of the certificate;
(4) “Movable property” includes growing crops;
(5) “Share in a corporation” includes stock, debentures or bonds;
(6) “Tax Recovery Officer” means the assessing authority or any other officer authorized by the Commissioner to exercise powers under clause (b) of sub-section (1) of Section 13 or under clause (aa) of sub-section (3) of Section 13 of the Karnataka Sales Tax Act, 1957 (Karnataka Act 25 of 1957).
32. (1) Where a person is in default, or is deemed to be in default, in making a payment of tax or any other amount due under the Act, the authority concerned may forward to the jurisdictional Tax Recovery Officer a certificate in Form 27.
(2) The authority concerned shall forward a certificate in Form 27, in respect of any additional amount that becomes due in cases where a certificate in Form 27 has already been issued and the amount clue covered by such certificate is not recovered fully, to the Tax Recovery Officer to whom such certificate was forwarded earlier notwithstanding that the additional amount or total amount due exceeds the limit specified in sub-rule (1).
(3) The Tax Recovery Officer, on receipt of the certificate in Form 27, shall proceed to recover from such defaulter the amount specified therein in accordance with the provisions in this Part.
(4) The authority concerned may issue a certificate under sub-rule (1) notwithstanding that, proceedings for recovery of the amount by any other mode has been taken.
33. When a certificate has been received by the Tax Recovery Officer, he shall cause CO be served upon the defaulter a notice in Form 28 requiring the defaulter to pay the amount specified in the certificate within fifteen days from the date of service of the notice.
34. (1) The certificate shall not be executed until the period of fifteen days has elapsed since the date of the service of the notice.
(2) Where 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 or distraint in execution of a decree of a Civil Court, and that the realization of the amount of the certificate would in consequence be delayed or obstructed, he may at any time, for reasons to be recorded in writing, attach to or distrain on the whole or any part of such property,
(3) If such defaulter furnishes security to the satisfaction of the Tax Recovery Officer, such attachment or distraint shall be cancelled from the date on which such security is accepted by the Tax Recovery Officer.
35. If the amount mentioned in the notice is not paid within the time specified therein, the Tax Recovery Officer shall proceed to realize the amount by.
(1) attachment or distraint and sale of the defaulter's moveable property; and
(2) attachment and sale of the defaulter's immovable property.
36. There shall be recoverable in the proceedings in execution of every certificate
(1) interest at the rate of six per cent per annum from the day commencing after the end of fifteen days from the date of service of notice in Form 28; and
(2) all charges incurred in respect of.
(a) the service of notice upon the defaulter to pay the arrears, warrants and other processes, and
(b) all other proceedings taken for realizing the arrears.
37. (1) Where property is sold in execution of a certificate, there shall vest in the purchaser merely the right, title and interest of the defaulter at the time of the sale, even though the property itself is specified.
(2) Where immovable property is sold in execution of certificate, and such sale has become absolute, the purchaser's right-, title and interest shall be deemed to have vested in him when the property is sold, and not from the time when the sale becomes absolute.
38. No suit shall be maintained against any person claiming title under a purchase certified by the Tax Recovery Officer in the manner laid down in this Part on the ground that the purchase was made on behalf of the plaintiff or on behalf of someone through whom the plaintiff claims.
39. (1) Whenever assets are realized, by sale or otherwise in execution of a certificate, the amounts so realized shall.
(a) first, cover the costs incurred by the authority concerned;
(b) next, be paid to the authority concerned for the amount due under the certificate in execution of which the assets were realized;
( c) next, be paid to the authority concerned for any other amount due under the Act or these rules; and
(d) any balance, be paid to the defaulter.
(2) If the defaulter disputes any claim made by the authority concerned to receive any amount referred to in clause ( c) above, the Tax Recovery Officer shall resolve the dispute.
40. (1) Except as otherwise expressly provided in the Act and these rules, every question arising between the authority concerned and the defaulter or their representatives relating to the execution, discharge or satisfaction of a certificate, or relating to the confirmation or setting aside of a sale held in execution of such certificate, shall be resolved by the order of the Tax Recovery Officer before whom such question arises.
(2) A suit may be brought in a Civil Court in respect of any such question upon the ground of fraud.
41. (1) All such property as is by the Code of Civil Procedure, 1908 (5 of 1908), exempted from attachment and sale in execution of a decree of a Civil Court, shall be exempted from attachment or distraint and sale under this Part.
(2) The Tax Recovery Officer's decision as to what property is entitled to exemption shall be final.
42. (1) Where any claim is preferred, or any objection is made to the attachment, distraint or sale of any property in execution of a certificate, On the ground that such property is not liable to stich attachment, distraint or sale, the Tax Recovery Officer shall proceed to investigate the claim or objection.
(2) The Tax Recovery Officer shall. not investigate where he considers that the claim or objection was itself deliberately or unnecessarily delayed.
(3) Where 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 the investigation of the claim or objection, upon such terms, security or otherwise.
(4) The claimant or objector must adduce evidence to show that.
(a) in the case of immovable property, on the date of the service of notice issued under this Part, to pay the arrears, or
(b) in the case of movable property, on the date of the distraint or attachment, he had some interest in, or was in possession of, the property in question.
(5) Where, upon investigation, the Tax Recovery Officer is satisfied that, for the reason stated in the claim or objection, such property was not, on the said date, in the possession of the defaulter or of any other person on his behalf or that, being in the possession of the defaulter at the said date, it was in his possession, not on his own account or as his own property, but on account of or in trust for any 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 distraint or attachment or sale.
(6) Where the Tax Recovery Officer is satisfied that the property was, on 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.
(7) 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, the order of the Tax Recovery Officer shall be final.
43. (1) Where the amount due with costs and all charges and expenses, resulting from the attachment to or distraint on any property, or incurred in order to bold a sale, are paid to the Tax Recovery Officer, or
(2) Where the certificate is cancelled,
the attachment or distraint shall be deemed to be withdrawn, and in the case of immovable property, the withdrawal shall, if the defaulter so desires, be proclaimed at his own expense, and a copy of the proclamation shall be affixed in the manner provided by this Part for a proclamation of sale of immovable property.
44. (1) Any deficiency of price which may happen on a resale, by reason of the purchaser's default, and all expenses resulting from such resale, shall be certified by the Tax Recovery Officer and shall, at the instance of either the authority concerned or the defaulter, be recoverable from the defaulting purchaser under the procedure provided under this Part.
(2) An application filed after fifteen days from the date of resale shall not be entertained.
45. (1) The Tax Recovery Officer may, in his discretion, adjourn any sale hereunder to a specified day and hour.
(2) Where a sale of immovable property is adjourned under sub-rule (1) for a longer period than one calendar month, a fresh proclamation of the sale under this Part shall be made, unless the defaulter consents to waive it.
(3) Every sale shall be stopped if, before the lot is knocked down, the arrears and costs, including the costs of the sale, are paid to the Tax Recovery Officer.
46. (1) Where a notice has been served on a defaulter under Rule 56, the defaulter or his representative in interest shall not be competent to mortgage, charge, lease or otherwise deal with any property belonging 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 Part, 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 monies contrary to such attachment, shall be void as against all claims enforceable under the attachment.
47. Any officer or other person having any duty to perform in connection with any sale under this Part shall not, either directly or indirectly, bid for, acquire or attempt to acquire any interest in the property sold.
48. A sale under this Part shall not take place on a Sunday or other general holidays recognized by the State Government or 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.
49. The Tax Recovery Officer may apply to the officer-in-charge of the nearest police station for such assistance as may be necessary in the discharge of his duties, and the authority to whom such application is made shall depute a sufficient number of police officers for furnishing such assistance.
Attachment or distraint and sale of movable property
50. The Tax Recovery Officer, attaching to or distraining on any movable property, shall prepare a warrant in Form 29 specifying the name of the defaulter, and the amount to be realized and cause a copy of the warrant to be served on the defaulter.
51. If, after service of the copy of the warrant, the amount is not paid forthwith, the Tax Recovery Officer shall proceed to attach to or distrain on the movable property of the defaulter.
52. (1) Where any movable property, other than agricultural produce, proceeded against is in the possession of the defaulter, it shall be seized, and the Tax Recovery Officer shall keep the property in his own custody or the custody of one of his subordinates or arrange for its safe custody, and shall be responsible for due custody thereof.
(2) Where the property seized is subject to speedy and natural decay, or where the expense of keeping it in custody is likely to exceed its value, the Tax Recovery Officer may sell it forthwith.
53. Where the property proceeded against is agricultural produce, it shall be attached by affixing a copy of the warrant.
(1) on the land on which such crop has grown, if such produce is a growing crop; or
(2) on the threshing floor, the place for treading out grain or the like, or fodder-stack, on or in which it is deposited, if such produce has been cut or gathered, and another copy on the outer door or on some other conspicuous part of the house in which the defaulter ordinarily resides, or 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, and the produce shall thereupon be deemed to have passed into the possession of the Tax Recovery Officer.
54. (1) Where agricultural produce is distrained, the Tax Recovery Officer shall make such arrangements for the custody, watching, tending, cutting and gathering thereof, and the authority concerned shall bear such amount as the Tax Recovery Officer shall require in order 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 Officer in this behalf may, subject to the like conditions, do all or any of such acts, and the costs incurred by such person shall be recoverable from the defaulter as if they were included in the certificate.
(3) Agricultural produce attached as a growing crop shall not be deemed to have ceased to be under attachment or to require re-attachment merely because it has been severed from the soil.
(4) Where an order for the attachment of a growing crop has been made at a considerable time before the crop is likely to be fit to be cut or gathered, the Tax Recovery Officer may suspend the execution of the order for such time as he thinks fit, and may, in his discretion, make a further order prohibiting the removal of the crop pending execution of the order of attachment.
(5) A growing crop which is not fit for storing shall not be attached under this rule within twenty days before the time at which it is likely to be fit to be cut or gathered.
55. (1) A debt not secured by a negotiable instrument, a share in a corporation or other movable property not in the possession of the defaulter except for property deposited in, or in the custody of, any Court, shall be attached, and the attachment shall be made by a written order in Form 30 prohibiting :
(a) in the case of a debit, the creditor from recovering the debt and the debtor from making payment thereof until receipt of a further order from the Tax Recovery Officer;
(b) in the case of a share, the person in whose name the share may be standing from transferring the same or receiving any dividend thereon;
( c) in the case of any other movable property, the person in possession of the same from giving it to the defaulter.
(2) A copy of such order shall be affixed on some conspicuous part of the office of the Tax Recovery Officer, and another copy shall be sent, in the case of debt, to the debtor, and in the case of shares, to the proper officer of the corporation and in the case of other movable property, to the person in possession of the same.
(3) A debtor, prohibited under clause (a) of sub-rule (1), may pay the amount of his debt to the Tax Recovery Officer, and such payment shall be deemed as paid to the defaulter.
56. (1) Where the property proceeded against is a decree of a Civil Court for the payment of money or for sale in enforcement of a mortgage or charge, it shall be attached, and attachment shall be made by the issue of a notice in Form 31 to the Civil Court requesting the Civil Court to stay the execution of the decree unless and until.
(a) the Tax Recovery Officer cancels the notice; or
(b) the authority concerned or the defaulter applies to the Court receiving such notice to execute the decree.
(2) Where a Civil Court receives an application under clause (b) of sub-rule (1), it shall on the application of the authority concerned or the defaulter, and subject to the provisions of the Code of Civil Procedure, 1908 (Central Act 5 of 1908), proceed to execute the attached decree, and apply the net proceeds in satisfaction of the certificate.
(3) The authority concerned 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.
57. Where the property proceeded against consists of the share or interest of the defaulter in movable property belonging to him and another as co-owner, it shall be attached, and the attachment shall be made by a notice in Form 32 to the defaulter prohibiting him from transferring the share or interest or charging it in any way.
58. Where the property is a negotiable instrument not deposited in a Court or in the custody of a public officer, it shall be distrained by the Tax Recovery Officer.
59. (1) Where the property proceeded against is in the custody of any Court or public officer, it shall be attached and the attachment shall be made by a Tax Recovery Officer by a notice in Form 33 to such Court or officer, requesting that such property, and any interest or dividend becoming payable thereon, should be held subject to his further orders.
(2) Where such property is in the custody of a Court and a question of title or priority arising between the authority concerned and any other person not being the defaulter, claiming to be interested in such property by virtue of any assignment, attachment or otherwise, shall be determined by such Court.
60. (1) Where the property proceeded against consists of an interest of the defaulter being a partner in the partnership property, the Tax Recovery Officer may make an order charging the share of such partner in the partnership property and profits with such payment of the amount due under the certificate, and may, by the same or subsequent order, appoint a receiver of the share of such partner in the profits, whether already declared or accruing, and of any other money which may become due to him in respect of the partnership, direct accounts and enquiries and make an order for the sale of such interest or such other order as the circumstances of the case may require.
(2) The other partners shall be at liberty at any time to redeem the interest charged or, in the case of a sale being directed, to purchase the same.
61. In the case of distraint, the property seized shall be, as far as possible, proportionate to the amount specified in the warrant.
62. In the case of distraint of movable property by actual seizure, the Tax Recovery Officer shall, after seizing the property, prepare an inventory of all the property attached, specifying in it the place where it is lodged or kept, and a copy of the inventory shall be delivered to the defaulter.
63. Attachment by seizure shall be made after sunrise and before sunset and not otherwise.
64. The Tax Recovery Officer may break open any inner or outer-door of any building and enter any building in order to seize any movable property, if he has reasonable grounds to believe that such building contains movable property liable to seizure under the warrant and be has notified his authority and intention of breaking open if admission is not given, and he shall give all reasonable opportunity to women to withdraw.
65. The Tax Recovery Officer may direct that any movable property attached or distrained under this Part, or such portion thereof as may seem necessary to satisfy the certificate, shall be sold.
66. When any sale of movable property is ordered by the Tax Recovery Officer, he shall issue a proclamation in Form 34 in the language of the District where the intended sale takes place, specifying the time and place of sale and whether the sale is subject to confirmation or not.
67. (1) A proclamation under Rule 66 shall be made public by the beat of a drum or other customary mode,
(a) in the case of property distrained. —
(i) in the village in which the property was seized or, if the property was seized in a town or city, in the locality in which it was seized; and
(ii) at such other places as the Tax Recovery Officer may direct; and
(b) in the case of property attached other than by distraint, in such places as the Tax Recovery Officer may direct. –
(2) A copy of the proclamation shall also be affixed in a conspicuous part of the office of the Tax Recovery Officer.
68. Except where the property is subject to speedy and natural decay or when the expense of keeping it in custody is likely to exceed its value, no sale of movable property under this Part shall, without the consent in writing of the defaulter, take place until after the expiry of at least fifteen days from the date on which a copy of the sale proclamation was affixed in the office of the Tax Recovery Officer.
69. (1) When the property to be sold is agricultural produce,
(a) sale shall be held if such produce is a growing crop, on or near the land on which such crop has grown; or
(b) sale shall be held if such produce has been cu t or gathered, at or near the threshing floor or place of treading out grain or the like, or fodder-stack on or in which it is deposited; or
( c) the Tax Recovery Officer may direct that the sale to be held at the nearest place of public resort, if he is of opinion that the produce is thereby likely to sell to greater advantage.
(2) Where, on the produce being put up for sale.
(a) a fair price in the estimation of the Tax Recovery Officer is not offered for it; and
(b) the owner of the produce, or a person authorized 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.
70. (1) Where the property to be sold is a growing crop and such crop is fit for storing but is not stored, the day of sale shall be so fixed as to make the crop 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 is not fit for storing or can be sold to a greater advantage in an unripe state, 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.
71. The property shall be sold by public auction in one or more lots as the Tax Recovery Officer may consider advisable and, if the amount to be realized by sale is satisfied by the sale of a portion of the property, the sale shall be immediately stopped with respect to the remainder of the lots.
72. (1) Where movable property is sold by public auction, the price of each lot shall be paid at the time of sale or as soon after as the Tax Recovery Officer directs and, in default of payment, the property shall forthwith be resold.
(2) On payment of the purchase money, the Tax Recovery Officer shall grant a certificate specifying the property purchased, the price paid and the name of the purchaser and the sale shall become absolute.
(3) Where the movable property to be sold is a share in goods belonging to the defaulter and a co-owner, and two or more persons, of whom one is such co-owner respectively, bid the same sum for such property or for any lot, the bidding shall be deemed to be the bidding of the co-owner.
73. Any irregularity in publishing or conducting the sale of movable property shall not vitiate the sale, but any person sustaining substantial injury by reason of such irregularity at the hands of any other person may institute a suit in a Civil Court against him, for compensation, or if such other person is the purchaser, for the recovery of the specific property and for compensation in default of such recovery.
74. Notwithstanding anything contained in this Part, where the property to be sold is a negotiable instrument or a share in a corporation, the Tax Recovery Officer may, instead of selling it by public auction, sell such instrument or share through a broker.
75. Where the property attached to or distrained on is current coins or currency notes, the Tax Recovery Officer may, at any time during the continuance of the attachment or distraint, direct that such coins or notes, or a part thereof sufficient to satisfy the certificate, be paid over to the authority concerned.
Attachment and sale of immovable property
76. Attachment of the immovable property of the defaulter shall be made by an order in Form 35 prohibiting the defaulter from transferring or charging the property in any way and prohibiting all persons from taking any benefit under such transfer or charge, and a copy of the order of attachment shall be served on the defaulter.
77. 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.
78. Where any immovable property is attached under this Part, the attachment shall relate back to, and take effect from, the date on which the notice to pay the arrears, issued under this Part, was served upon the defaulter.
79. (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, in. Form 36 of the intended sale, to be made in the language of the district.
80. A proclamation of sale of immovable property shall be made after notice to the defaulter and shall state the time and place of sale and shall specify, as fairly and accurately as possible.
(1) the property to be sold;
(2) the revenue, assessed upon the property or any part thereof;
(3) the amount for recovery of which the sale is ordered; and
(4) any other thing which the Tax Recovery Officer considers is material for a purchaser to know, in order to judge the nature and value of property.
81. (1) Every proclamation for the sale of immovable property shall be made at some place on or near such property by beat of drum or other customary mode, and acopy of the proclamation shall be affixed on a conspicuous part of the property and also on a notice-board at the office of the Tax Recovery Officer.
(2) Where the Tax Recovery Officer so directs, such proclamation shall also be published in the Official Gazette or in a local newspaper, or in both, and the cost of such publication shall be deemed to be part of the costs of the sale.
(3) Where the property is divided into lots for the purpose of being sold separately, it shall not be necessary to make a separate proclamation for each lot, unless proper notice of the sale cannot, in the opinion of the Tax Recovery Officer, otherwise be given.
82. A sale of immovable property under Rule 79 shall not, without the consent in writing of the defaulter, take place until after the expiration of at least thirty days calculated from the date on which a copy of the proclamation of the sale has been affixed on the property or in the office of the Tax Recovery Officer, whichever is later.
83. The sale shall be by public auction to the highest bidder and shall be subject to confirmation by the Tax Recovery Officer.
84. (1) On every sale of immovable property, the person declared to be the purchaser shall pay, immediately after such declaration, a deposit of twenty-five per cent of the amount of his purchase money, to the Tax Recovery Officer, 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.
85. In default of payment within the period specified in sub-rule (2) of Rule 84, the deposit shall, after defraying the expenses of the sale, be forfeited to the Government by the Tax Recovery Officer, 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.
86. All persons bidding at the sale shall be required to declare if they are bidding on their own behalf or on behalf of their principals, and in the latter case, they shall file their authority, and in default, their bids shall be rejected.
87. (1) Where immovable property has been sold in execution of a certificate, the defaulter, or any person whose interests are affected by the sale, may at any time within thirty days from the date of the sale, apply to the Tax Recovery Officer to set aside the sale, on his depositing. —
(a) for payment to the authority concerned, the amount specified in the proclamation of sale for the recovery of which the sale was ordered, with interest thereon at the rate of six percent per annum calculated from the date of the proclamation of sale to the date when the deposit made; and
(b) for payment to the purchaser, as penalty, a sum equal to five per cent of the purchase money
(2) Where a person makes an application under Rule 88 for setting aside the sale of his immovable property, he shall not, unless he withdraws the application, be entitled to make or pursue an application under this rule.
88. (1) Where immovable property has been sold in execution of a certificate, the authority concerned, the defaulter or any person whose interests are affected by the sale, may, at any time within thirty days from the date of sale, apply to the Tax Recovery Officer to set aside the sale of the immovable property on the ground that notice was not served on the defaulter to pay the arrears as required by this Part or on the ground of a material irregularity in publishing or conducting the sale.
(2) A sale shall be set aside on any such ground, if the Tax Recovery Officer is satisfied that the applicant has sustained substantial injury by reason of the non-service or irregularity.
(3) An application made by a defaulter without depositing the amount recoverable from him in execution of the certificate shall be disallowed.
89. 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.
90. (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 amount and penalty and charges, the deposit is made within thirty days from the date of the sale, the Tax Recovery Officer shall make an order setting aside the sale.
(3) An order shall be made under sub-rule (2), after a notice of the application has been given to the persons affected thereby.
91. When a sale of immovable property is set aside, any money paid or deposited by the purchaser on account of the purchase, together with any penalty, deposited for payment to the purchaser, and such interest as the Tax Recovery Officer may determine, shall be paid to the purchaser.
92. (1) Where a sale of immovable property has become absolute, the Tax Recovery Officer shall grant a certificate in Form 37 specifying the property sold, and the name of the person who, at the time of sale, is declared to be the purchaser.
(2) Such certificate shall state the date on which the sale became absolute.
93. (1) Where an order for the sale of immovable property has been made, if the defaulter can satisfy the Tax Recovery Officer that there is a reason to believe that the amount of the certificate may be raised by the mortgage or lease or private sale of such property, or some .part thereof, or of any other immovable property of the defaulter, the Tax Recovery Officer may, on the defaulter's request in writing, postpone the sale of the property comprised in the order for sale, on such terms and for such period as he thinks proper, to enable him to raise the amount.
(2) In such a case:-
(a) the Tax Recovery Officer shall grant a certificate to the defaulter, authorizing him, within a period to be specified therein, and notwithstanding anything contained in this Part, to make the proposed mortgage, lease or sale;
(b) all monies payable under such mortgage, lease or sale shall be paid to the Tax Recovery Officer; and
( c) a mortgage, lease or sale under this rule shall become absolute after it is confirmed by the Tax Recovery Officer.
94. Every resale of immovable property, in default of payment of the purchase money within the period allowed for such payment, shall be made after the issue of a fresh proclamation in the manner and for the period herein before provided for the sale.
Where the property sold is a share of undivided immovable property, belonging to the defaulter and a co-sharer, and two or more persons, of whom one is such 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.
96. Every Tax Recovery Officer, or others acting under this Part, shall have the powers of a. Civil Court while trying a suit, for the purpose of receiving evidence administering oaths, enforcing the attendance of witness and compelling the production of documents.
97. (1) An appeal from any original order passed by the Tax Recovery Officer under this Part not being an order which is final, shall lie to the jurisdictional. Joint Commissioner authorized by the Commissioner in this behalf.
(2) Every appeal under this rule must be made within thirty days from the date of the order appealed against.
(3) Pending the decision of any appeal, execution of the certificate may be stayed if the appellate authority so directs.
98. Any order passed under this Part may, after notice to all persons interested, be reviewed by the officer who made the order, or by his successor-in-office, on account of any mistake apparent from the record.
99. Where any person has, under this Part, become surety for the amount due by the defaulter, he may be proceeded against under this Part as if he were the defaulter.
100. Nothing in this Part shall affect any provision of the Act under which the tax is a first charge upon any asset.