The main legal point established in the judgment is the obligation of the petitioners to pay collection charges and service charges as per the provisions of Rule 4 and Rule 5(3) of the Kerala Revenue Recovery Act, 1968.

A.M. Shaffique, J.

This appeal has been remitted back to this Court by the Supreme Court for fresh disposal, in accordance with law, with the following observations:

"7. In our opinion, in these types of cases, the High Court should have taken up the matters individually and decided whether the State was justified in issuing the demand notices for the purpose of collection charges as well as service charges under Rules 4 and 5 of the Rules.

8. In view of the above, we set aside the judgment and order passed by the High Court and remand the matters to the High Court for a fresh disposal in accordance with law. We also request the High Court to take the cases individually instead of clubbing ail the matters and look into the facts of each case and take a positive decision on the pleadings adduced by both the parties."

2. The writ petition was filed challenging Exts. P-2 and P-4 by which petitioners were called upon to remit 7.5% on Rs.14.00.000 which was paid by the petitioner before availing the OTS facility and calling upon the petitioner to pay 1% service tax on Rs.72 lakhs.

3. According to the petitioners, they availed a loan from Kerala Financial Corporation (for short 'KFC')- They further availed One Time Settlement (for short 'OTS') facility by which they remitted Rs.72 lakhs. When the title deeds were not returned, he filed W.P.C. No. 8739/2009 before this Court which was disposed of by judgment dated 22-5-2009 observing that the issue regarding collection charges which are liable to be paid by the petitioners is left open an will be subject to the result in W.P.C. No. 23991/2005. It is stated that the said case was decided on 18-8-2009 declaring that collection charges are not leviable. The said judgment is reported in Malabar Organics Ltd. v. State (Kerala 2009 (4) K.L.T. 328 It is contended that a notice dated 25-8-2009 came to be issued : KFC calling upon the petitioners to pay collection charges, which is impugned.

4. The learned Single Judge, in the impugned judgment held that the issue is covered by the judgment in Malabar Organics Ltd. (supra) and hence allowed the writ petition quashing Ext. P-4, however observing that the 1st respondent shall take effective steps for lifting the attachment and that the said judgment does not preclude the 1st respondent from claiming expenses, if any, actually incurred which will fall in the category in item (i) to (vii) of the Table appended to Rule 4 of the Revenue Recovery Rules, 1968.

5. The State and its authorities are in appeal. While impugning the aforesaid judgment, it is contended by the learned Government Pleader that the judgment in Malabar Organics Ltd. (supra) had been set aside by the Supreme Court. It is argued that as far as the petitioners are concerned, Rule 5 of the Rules clearly applies to the fact situation. It is stated that Rs.14 lakhs was recovered during revenue recovery proceedings and the balance amount was recovered by way of OTS, after sub rule (3) of Rule 5 came into force.

6. Perusal of the writ petition does not disclose any facts controverting the stand taken in Ext. P-4. In Ext. P-4, it is stated that Rs.14 lakhs was recovered before OTS and Rs.72 lakhs after the OTS. It is apparent that, if the payment of Rs.14 lakhs has been made during revenue recovery proceedings, the revenue authorities are entitled to collect the collection charges. In regard to OTS, the amended provision clearly applies as the payment had been made by the petitioners subsequent to Rule 5(3) coming into force. Rule 5(3) reads as under:

"5(3) Institutions except Government Departments accepting defaulted payments directly from the defaulter after initiating Revenue Recovery Proceedings under the Kerala Revenue Recovery Act, 1968 (15 of 1968) and filing the certificate by the District Collector under sub-section (3) of Section 69 of the said Act shall be liable to pay 1% of the amount so collected towards service charge for the initiation of Revenue Recovery Proceedings ag