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IN THE HIGH COURT OF KERALA AT ERNAKULAM
N.NAGARESH, J.
Cheriyan J.Puthiyadam, S/o.John – Appellant
Versus
State Of Kerala – Respondent
WP(C).No.1760 of 2010(T)
Decided on : 04-03-2021
retrospective operation of Section 19C of the Kerala General Sales Tax Act - The court held that the revenue recovery proceedings initiated against the 7th respondent for recovery of tax dues of the 6th respondent were illegal. All proceedings against the 7th respondent, including the attachment of his property for recovery of such dues, were declared illegal. Consequently, the petitioner was declared entitled to pay land tax and to apply for transfer of registry, if he is otherwise eligible.
Fact of the Case:
The petitioner sought to quash certain proceedings and to command the respondents not to interfere with the possession and enjoyment of the property purchased by the petitioner. The events leading to the filing of the writ petition involved the cancellation of a dealer's license, subsequent transactions, attachment and sale of property, and the petitioner's purchase of the property.
Finding of the Court:
The court found that the revenue recovery proceedings initiated against the 7th respondent for recovery of tax dues of the 6th respondent were illegal. All proceedings against the 7th respondent, including the attachment of his property for recovery of such dues, were declared illegal. Consequently, it was declared that the petitioner would be entitled to pay land tax and to apply for transfer of registry, if he is otherwise eligible.
Issues: The court considered several issues, including the retrospective operation of Section 19C of the Kerala General Sales Tax Act, the legality of revenue recovery proceedings, the entitlement of the petitioner to pay land tax and apply for transfer of registry, and the maintainability of the writ petition.
Ratio Decidendi: The court held that the revenue recovery proceedings initiated against the 7th respondent for recovery of tax dues of the 6th respondent were illegal. It further declared that the petitioner would be entitled to pay land tax and to apply for transfer of registry, if he is otherwise eligible.
Final Decision: The writ petition was allowed, and the revenue recovery proceedings against the 7th respondent were set aside. The petitioner was declared entitled to pay land tax and to apply for transfer of registry, if he is otherwise eligible.
JUDGMENT :
The petitioner is before this Court seeking to quash Exts.P15 and P21 proceedings of the 8th and 1st respondents respectively and to command the 1st respondent and its instrumentalities including respondents 2 to 4 not to interfere with the free possession and enjoyment of the property of the petitioner purchased as per Ext.P9 deed from the 5th respondent and cultivated with rubber and pineapple.
2. Events leading to the filing of this writ petition, chronologically, are as follows:-
3. The Rubber Board cancelled the licence issued to the 6th respondent on 09.01.1987 as per Ext.P2, with effect from 15.01.1987. Subsequently, the Rubber Board, as per Ext.P3, granted Dealers licence to the 6th respondent again on 12.04.1989 for the period ending on 31.03.1992. The 6th respondent had cancelled the Power of Attorney given to the 7th respondent as per Ext.P4 revocation letter dated 02.07.1989. Thereupon, the 7th respondent returned all documents including the Rubber Board licence to the 6th respondent on 15.07.1989, which was acknowledged by the 6th respondent as per Ext.P5. The 7th respondent himself obtained Dealers licence from the Rubber Board on 10.07.1989, the validity of which was later extended upto 31.03.1990.
4. In the meanwhile, the Principal Sub Court, Kottayam passed Ext.P7 money decree in OS No.403/1986 in favour of the 5th respondent-Bank and against the 7th respondent.
5. The State of Kerala amended the Kerala General Sales Tax Act, 1963 inserting Section 19C, as per Act 3 of 1990. Section 19C provided for protective assessment and enabled the Assessing Authority to recover sales tax from any person carrying on business as agent, employee, manager, power of attorney holder, guarantor or in any other capacity, in the name or in association with a registered dealer. Section 19C inserted in the year 1990 was given retrospective effect from 29.08.1989. In exercise of Section 19C, the Sales Tax authorities served a notice of recovery dated 27.08.1991 on the 7th respondent under Section 34 of the Revenue Recovery Act for realising defaulted sales tax dues of the 6th respondent. The land of the 7th respondent in Survey No.1921/1 of Kondoor Village was attached on 30.12.1991 and was notified for sale. On 11.02.1992, the Government of Kerala itself bought the property in auction.
6. Before the said bought-in-auction was confirmed in favour of the Government, on 22.12.1994, the Principle Sub-Court, Kottayam auctioned the very same property of the 7th respondent in execution of Ext.P7 decree. The 5th respondent-Bank purchased the property in auction. The sale in favour of the 5th respondent-Bank was confirmed on 21.02.1995. Subsequently, on 31.05.1995, the land purchase made by the State by way of buy-in, was confirmed. The Court issued an Auction Certificate to the Bank on 31.01.1996 and the Bank took possession of the property on 27.11.1996. The Bank remitted land tax and submitted an application for transfer of registry in February, 1998. The learned Government Pleader contends that the Government took custody of the property on 05.09.2000.
7. On 18.09.2001, the 5th respondent-Bank sold the property to the petitioner by way of Ext.P9 sale deed registered in SRO, Erattupetta. The Revenue Authorities refused to effect transfer of registry in favour of the petitioner, in view of the auction conducted by the Sales Tax authorities. The petitioner hence filed W.P.(C) No.10661 of 2002 before this Court. A learned Single Judge dismissed the writ petition as per Ext.P12, h
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