(1) If any municipal corporation makes a default in the collection or payment to the State Government of any sum due in respect of the tax under this Act, the State Government may, after holding such inquiry as it thinks fit, fix a period for the collection or payment of such sum.
(2) If the collection or payment of the sum is not made within the period so fixed, the State Government may, notwithstanding anything contained in any law relating to the funds vesting in such municipal corporation or any other law for the time being in force, direct any bank in which any moneys or the municipal corporation are deposited or the person in-charge of the Government treasury or of any other place of security in which the moneys of such municipal corporation are deposited, to pay such sum from such money as may be standing to the credit of the municipal corporation in such bank or, as the case may be, in the hands of such person or as may, from time to time, be received, from or on behalf of the municipal corporation by way of deposit by such bank or person, and such bank or person shall be bound to obey such order.
(3) Every payment made pursuant to an order under sub-section (2) shall be sufficient discharge to such bank or person, from all liability to the municipal corporation, in respect of any sum so paid by it or him out of the moneys of that municipal corporation so deposited with such bank or person.