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2021 Supreme(Ker) 634
IN THE HIGH COURT OF KERALA AT ERNAKULAM
MURALI PURUSHOTHAMAN, J.
Mercy W/o Joy J. Moyalan – Petitioner
Versus
The District Collector, Thrissur – Respondent
W.P. (C) No. 8685 of 2013
Decided On : 06-09-2021
Advocate Appeared:
For the Petitioners: Sri. N.M. Madhu, Smt. C.S. Rajani.
For the Respondent: Sri. K.M. Faisal.
Point of Law:Arrears of tax - Finding of the District Collector that the defaulter can claim for his right on the property and pay the dues using the said property is not sustainable.
Headnote:
Kerala Revenue Recovery Act, 1968- section 65- Arrears of sales tax dues- defaulter pleaded no means but, the District Collector, in exercise of powers conferred under section 65 of the Act issued Ext.P1 order to arrest and detain the defaulter in civil prison.
Finding of the Court:
reports of the revenue officials that, the defaulter is living in a highly financial family background with financially sound relatives and friends are not factors relevant under S.65 of the Act to make an order for the detention of the defaulter in the civil prison. No objective assessment of facts and the factors relevant under S.65 of the Act was made by the District Collector to make an order for the detention of the defaulter in civil prison. There is nothing on record before the District Collector to hold that the defaulter has means to pay the arrears, or the defaulter is willfully withholding payment of arrears of sales tax or has dishonestly transferred his property or guilty of fraudulent conduct. Therefore, I quash Ext.P7. The petitioner's husband, the defaulter is set free. However, this will not prevent the respondents from taking any fresh steps to recover the amount due from the defaulter, in accordance with law.
Result: writ petition is allowed
JUDGMENT :
MURALI PURUSHOTHAMAN, J.
1. This writ petition is filed by the wife of Sri. Joy J. Moyalan, who was arrested and detained in civil prison by the 1st respondent District Collector invoking the powers under section 65 of the Kerala Revenue Recovery Act, 1968 (for short the Act).
2. Sri. Joy J. Moyalan (hereinafter referred to as ‘defaulter’) was proceeded against for arrears of sales tax dues amounting to Rs. 17,73,432/- [Rupees seventeen lakh seventy three thousand four hundred and thirty two only]. The defaulter pleaded no means but, the District Collector, in exercise of powers conferred under section 65 of the Act issued Ext.P1 order to arrest and detain the defaulter in civil prison.
3. Ext.P1 order was challenged by the defaulter before this Court in W.P. (C) No. 25721/2003 and this Court by Ext.P2 judgment quashed ExtP1 order (Ext. P3 therein). The relevant portion of the judgment reads thus:
“Since the District Collector's order was not a speaking order, this court got an enquiry conducted by the Special Cell of the police. The police have filed a report in this Court stating that on their enquiry petitioner does not have any means and he and his family members are depending on his father. In view of the police report and in the circumstances, Ext.P3 is not tenable. In the circumstances, Ext. P3 is quashed, leaving freedom to the District Collector to conduct independent enquiry as to whether petitioner has means, whether any property is held by the petitioner in benami and whether he has transferred assets to avoid payment to the Government. It is for the District Collector to collect data and furnish it to the petitioner calling for this objections, and issue fresh orders including order under Section 65 of the RR Act if there are new facts and materials available with him.”
(Emphasis supplied)
4. Pursuant thereto, the District Collector issued a show cause notice to the defaulter as to why a warrant of arrest shall not be issued under section 65 of the Act as he is satisfied that the defaulter is willfully withholding payment of the arrears and that the defaulter has dishonestly transferred his father's property to the name of his minor son and that the defaulter has the means to pay the arrears or some substantial part of the arrears but is refusing or neglecting to pay the same and the proceeds of the sale of his property are not sufficient to liquidate the arrears and therefore it is proposed to arrest and imprison the defaulter in the civil prison.
5. The defaulter submitted Ext. P4 explanation to the show cause notice stating that he has no means to pay the arrears and that he has no right in his father's property and he has not dishonestly transferred any property to evade the payment.
6. The District Collector after hearing the defaulter passed Ext.P7 order invoking the powers under section 65 of the Act to arrest and detain the defaulter in civil prison. The relevant portion of Ext.P7 reads as follows:-
“In compliance of judgment in WP (C) No. 25721/2003 of Honorable High Court of Kerala, Tahasildar, Mukundapuram, Thrissur, Chavakkad, Kodungalur and Talappilly were directed to report on the benami property details of Sr. Joy. J. Moyalan. No properties in his name or in benami were reported. In the meanwhile, Sri. Johny, father of defaulter filed A.S. Nos. 406/04, 408/04 and 413/04 before the Honourable District Court, Thrissur for injunction against RR proceedings on his properties and gained a Judgment granting Order restraining the RR Authorities from initiating Revenue Recovery against the plaint Schedule properties belong to Sri. Johny vide the judgment dated 31.7.2010.
Tahasildar (RR), Thrissur has reported vide the paper read as VII above that Sri. Johny, father of defaulter was expired on 11-06-2005 and an extent of 0.1196 Hector of land with a terrace building comprised in Resurvey No. 20/5 of Edakkunny (V) in the name of Sri. Johny was deliberately transferred to the name of Minor Johan, Grandson of S
