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I am facing a problem that while executing a serial receive interrupt my program needs to service a timer0 interrupt. The program is not jumping to the timer0 isr till the uart isr is fully complete even an overflow is generated and interrupt has been enabled ??
"Actually I am using timer0 as a time-out to exit the serial ISR waiting for the second byte."
Please stop with that. Do not let your processor busy-loop in any ISR waiting for more events.
Instead let your main loop wait until your serial ISR collects the second byte or until the timer interrupt (or just polled timer test) indicates a timeout.
You really should not (!) create "slow" interrupts. It will just complicate everything for you