(1) Where the assets retained under sub-section (7) of section 206 consist solely of money, or partly of money and partly of other assets—

(a) the Deputy Commissioner of Taxes shall first apply such money towards payment of the amount in respect of which the person concerned is deemed to be an assessee in default under that subsection; and thereupon such person shall be discharged of his liability to the extent of the money so applied; and

(b) where, after application of the money under clause (a), any part of the amount referred to therein remains unpaid, the Deputy Commissioner of Taxes may recover the amount remaining unpaid, by sale of such of the assets as do not consist of money in the manner movable property may be sold by a Tax Recovery Officer for the recovery of tax; and for this purpose he shall have all the powers of a Tax Recovery Officer under this Act.

(2) Nothing contained in sub-section (1) and in sub-section (7) of section 206 shall preclude the recovery of any liability of an assessee in default by any other mode provided in this Act.

(3) Any assets or proceeds thereof which remain after the discharge of the liability in respect of the amount referred to in sub-section 7 of section 206 shall forthwith be made over or paid to the persons from whose custody the assets were seized.