I downloaded and installed avast 5 only yesterday, but there is an issue:
I came to know that avast 5 cannot be updated automatically or through the program interface, then what is the procedure to update it?
Welcome to the forums, koolblue. 
First, where did you get avast 5 from … the avast website or some other website?
The official avast 5 is a beta version and should not be installed on an everyday use computer. For that, version 4.8 should be used.
As a beta version, there are no updates unless avast releases a beta update. This will not occur often.
Um it actually can be updated through the interface.
@CharleyO
[b]Yet Another Beta Refresh (5.0.160)[/b] Note: we're still aware of some bugs related to the upgrade process 4.8 -> 5.0 so it is generally not recommended to install this beta using the upgrade path from v4.8. A clean install will work much better for now.http://forum.avast.com/index.php?topic=49685.0
Definitions update fine:
Virus definitions version: 091012-0
When the final version comes out I will do a clean install but I want to test the beta now.