High Court of KeralaSingle Judge2011-08-23Writ petition allowed; Ext.P16 quashed; Ext.P5 ...

M/S RAM BAHADUR THAKUR LTD. v. Regional Provident Fund Commissioner, Employees' Provident Fund Organization, and Recovery Officer, EPFO

Case / Petition Number:WP(C).No.22583/2011

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P.N. Ravindran
Judgment Date: 2011-08-23
Court Decision / Holding: I accordingly allow the writ petition, quash Ext.P16 and declare that Ext.P5 order of attachment stands vacated by efflux of time in accordance with the stipulations contained in rule 68B of the II Schedule to the Income Tax Act, 1961. Needless to say it will be open to the respondents to take fresh steps to recover the amounts due from the petitioner.
Final Disposition: Writ petition allowed; Ext.P16 quashed; Ext.P5 order of attachment stands vacated by efflux of time; respondents may take fresh steps to recover the amounts due.

Parties to the Case

Appellants / Petitioners

M/S RAM BAHADUR THAKUR LTD., represented by its Director, Saileesh Mohan Sharma

Respondents

The Regional Provident Fund Commissioner, Employees' Provident Fund Organization, Sub Regional Office, Chalakkuzhy Building, C.M.S. College Road, Kottayam-686001
The Recovery Officer, Employees' Provident Fund Organization, Sub Regional Office, Chalakkuzhy Building, C.M.S. College Road, Kottayam-686001

Legal Representation & Advocates

Counsels for Petitioners

• Sri N. James Koshy

Counsels for Respondents

• Sri Joy Thattil Ittoop, SC, EPF Organization for R1&2

Case Synopsis & Summary

The petitioner, M/S RAM BAHADUR THAKUR LTD., challenged Ext.P5, an attachment order dated 27.08.2006, which immobilized an apartment in Mumbai to recover provident fund dues for 1992-2004. The petition seeks a declaration that Ext.P5 stands vacated on expiry of the limitation period under Rule 68B(1) II Schedule to the Income Tax Act, 1961, and that the attached property cannot be sold now. The court situates the dispute within a framework where the EPF recovery provisions (Section 8G of the EPF and Miscellaneous Provisions Act, 1952) operate in tandem with the IT Act II Schedule, and Rule 68B(1) restricts the sale of attached immovable property beyond three years from the end of the financial year in which the tax demand becomes conclusive or final. It cites the AP High Court’s decision in S.V. Gopala Rao and others v. Commissioner of Income Tax and the Bombay High Court in M.U. Joshi v. Tax Recovery Office to support the time-bar on sale. The court holds that Ext.P5 attachment cannot be used to effect a sale after the prescribed period, and that the attachment must be deemed vacated upon expiry of the limitation. Consequently, Ext.P16 is quashed, and Ext.P5 stands vacated by time, with the respondents free to pursue fresh recovery steps if needed.

Provisions of Law Cited

8G of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952Rule 68B(1) of the II Schedule to the Income Tax Act, 1961Section 245-I of the Income Tax Act, 1961Chapter II of the Income Tax Act, 1961Rule 68B(4) of the II Schedule to the Income Tax Act, 1961

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contended that Ext.P5, the attachment order, has become ineffective and cannot be used to compel sale after the expiry of the three-year limitation period under Rule 68B(1) II Schedule to the IT Act. They argued that the mechanism for attachment and sale is circumscribed by the statutory clock, and that once the limitation period elapsed, the attachment should be treated as vacated under Rule 68B(4). They urged the court to lift the attachment and permit fresh recovery measures within the legal timeframe.

Contentions of Respondents

The respondents argued that the EPF recovery provisions under Section 8G of the EPF Act apply with IT Act II Schedule rules, and that Ext.P5 continued to be valid for recovery; the sale of the attached property would not be foreclosed so long as the attachment stands and the statutory periods allow recovery. They relied on prior precedents reflecting the necessity to safeguard employees’ provident fund dues.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
S.V. Gopala Rao and others v. Commissioner of Income Tax	(2004) 270 ITR 433 (AP)	Positive	Cited to support the proposition that sale beyond the three-year period from the date of attachment is invalid.
M.U. Joshi v. The Tax Recovery Officer	(2005) 199 CTR Bombay 249	Positive	Also supports the time-bar on sale beyond the three-year limit under Rule 68B(1).
W.P(C) No.14341/2011	W.P(C).No.14341/2011	Mentioned Only	Ext.P12 judgment in a Kerala High Court petition, referenced to contextualize the direction/consideration given in that earlier petition; not treated as a binding precedent in this judgment.

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Extracted Judgment Text

Exact text extracted from official judgment records.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN TUESDAY, THE 23RD AUGUST 2011 / 1ST BHADRA 1933 WP(C).No. 22583 of 2011(W) -------------------------- PETITIONER(S): --------------- M/S.RAM BAHADUR THAKUR LTD., REPRESENTED BY ITS DIRECTOR, SAILESH MOHAN SHARMA, SIDHARTHA IIND MAIN ROAD, WILLINGTON ISLAND, KOCHI-682003. BY ADV. SRI.N.JAMES KOSHY RESPONDENT(S): --------------- 1. THE REGIONAL PROVIDENT FUND COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANIZATION, SUB REGIONAL OFFICE, CHALAKKUZHY BUILDING, C.M.S.COLLEGE ROAD, PB NO.36, KOTTAYAM-686001. 2. THE RECOVERY OFFICER, EMPLOYEES PROVIDENT FUND ORGANIZATION, SUB REGIONAL OFFICE, CHALAKKUZHY BUILDING, C.M.S.COLLEGE ROAD, PB NO.36, KOTTAYAM-686001. ADV. SRI.JOY THATTIL ITOOP, SC, EPF ORGANISA FOR R1&2 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23/08/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## W.P(C)No.22583/2011 ## APPENDIX ## PETITIONER'S EXHIBITS: - EXT.P1. TRUE COPY OF THE CERTIFICATE ISSUED BY THE INSPECTOR OF PLANTATIONS, PEERUMEDU DATED 1.7.2009 - EXT.P2. TRUE COPY OF THE NOTIFICATION DATED 17.4.2008 PUBLISHED IN MALAYALA MANORAMA DAILY.. - EXT.P3. TRUE COPY OF THE SALE PROCLAMATION DATED 22.4.2008 ISSUED BY THE 2ND RESPONDENT. EXT.P4. TRUE COPY OF THE COMMUNICATION DATED 18.9.2008 - EXT.P5. TRUE COPY OF THE ATTACHMENT ORDER DATED 17.8.2006 AND THE DETAILS OF THE CERTIFICATES ANNEXED. EXT.P6. TRUE COPY OF THE COMMUNICATION DATED 3.3.2011 - EXT.P7. TRUE COPY OF THE DETAILS OF THE AMOUNT REALIZED AND THE AMOUNT ADJUSTED AGAINST THE EMPLOYEES PROVIDENT FUND DUES IN RESPECT OF EACH ESTATE. - EXT.P8. TRUE COPY OF THE REHABILITATION PACKAGE FOR 33 CLOSED TEA GRADENS FOR LIQUIDATING DAMAGES DATED 11.7.2008 - EXT.P9. TRUE COPY OF THE REHABILITATION PACKAGE ISSUED BY THE 1ST RESPONDENT OF THE NELLIKAI ESTATE. - EXT.P9(a) TRUE COPY OF THE REHABILITATION PACKAGE ISSUED BY THE 1ST RESPONDENT OF THE PAMBANAR ESTATE. - EXT.P9(b) TRUE COPY OF THE REHABILITATION PACKAGE ISSUED BY THE 1ST RESPONDENT OF THE THENGAKKAL ESTATE. - EXT.P9(c) TRUE COPY OF THE REHABILITATION PACKAGE ISSUED BY THE 1ST RESPONDENT OF THE MANJUMALAI ESTATE. W.P(C)No.22583/2011 : 2 : EXT.P10. TRUE COPY OF THE APPLICATION DATED 26.3.2011 - EXT.P12. TRUE COPY OF THE JUDGMENT DATED 6.6.2011 IN W.P(C) NO.14341/2011 OF THE HON'BLE HIGH COURT OF KERALA. - EXT.P13. TRUE COPY OF THE STATEMENT FILED FOR THE RESPONDENT IN W.P(C) NO.14341/2011 DATED 2.6.2011 EXT.P14. TRUE COPY OF THE ARGUMENT NOTE SUBMITTED ON 14.6.2011 - EXT.P15. TRUE COPY OF REQUEST MADE ON 24.1.2011 BY THE PETITIONER. - EXT.P16. TRUE COPY OF THE ORDER NO.KR/KTM/RBT/RECOVERY/ENF.I (6)/2011/5191 DATED 9.8.2011 - EXT.P17. TRUE COPY OF THE JUDGMENT DATED 9.8.2004 OF THE HON'BLE ANDHRA PRADESH HIGH COURT. - EXT.P18. TRUE COPY OF THE JUDGMENT DATED 20.9.2005 OF THE HON'BLE MUMBAI HIGH COURT. / TRUE COPY / P.S.TO JUDGE **P.N.RAVINDRAN, J. ----------------------------------------W.P(C).No.22583 of 2011 ----------------------------------------Dated this the 23[rd] August, 2011** ## **JUDGMENT** In this writ petition the petitioner challenges Ext.P5 order of attachment effected by the second respondent in respect of an apartment situate in Mumbai and seeks a declaration that Ext.P5 order of attachment stood vacated on the expiry of the period of limitation stipulated in rule 68B(1) of the II Schedule to the Income Tax Act, 1961. 2. The petitioner had earlier approached this Court by filing W.P(C)No.14341 of 2011 for an order directing the respondents to lift the attachment of the apartment referred to above. At that stage a request made by the petitioner in that regard was pending before the Regional Provident Fund Commissioner, Kottayam. Taking note of that fact his Court disposed of the said writ petition by Ext.P12 judgment delivered on 6.6.2011 with a direction to the first respondent to consider that representation in the light of the statutory provisions and to take a decision thereon after affording the petitioner/petitioner's representative an opportunity of being **W.P(C).No.22583 of 2011** -:2:- heard. The first respondent thereafter considered the said representation and passed Ext.P16 order dated 1.8.2011 wherein overruling the contention raised by the petitioner the first respondent rejected the petitioner's request to lift the attachment. 3. I heard Sri.N.James Koshy, learned counsel appearing for the petitioner and Sri.Joy Thattil Ittoop, learned standing counsel appearing for the respondents. It is not in dispute that by virtue of section 8G of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 the provisions of the II Schedule to the Income Tax Act, in force from time to time, apply in the matter of recovery of amounts due from employers to the employees provident fund. It was in terms of the said provisions that Ext.P5 order of attachment was issued on 27.8.2006. Rule 68B(1) of the II Schedule of the Income Tax Act stipulates that no sale of immovable property shall be made after the expiry of three years from the end of the financial year in which the order giving rise to a demand of any tax, interest, fine, penalty or any other sum, for the recovery of which the immovable property has been attached, has become conclusive under the provisions of section 245-I or as the case may be, final in terms of the provisions of Chapter II. Interpreting the said provision, a Division Bench of ## **W.P(C).No.22583 of 2011** -:3:- the Andhra Pradesh High Court has in _**S.V.Gopala Rao and others v. Commissioner of Income Tax**_ , (2004) 270 ITR 433 (AP) held that a sale of the attached property beyond the period of three years from the date of attachment in terms of rule 68B(1) is invalid. The same view was taken by a Division Bench of the Bombay High Court in _**M.U.Joshi v. The Tax Recovery Office**_ r, (2005) 199 CTR Bombay 249. In such circumstances I am prima facie satisfied that pursuant to Ext.P5 order of attachment, which was effected on 17.8.2006, the immovable property attached therein cannot now be sold. Ext.P5 order of attachment was passed on 17.8.2006. The order of attachment was effected to recover the amounts due from the petitioner for the period 1992 to 2004. If the period of three years is reckoned from 17.8.2006, even then pursuant to Ext.P5 order of attachment the property attached therein cannot now be sold. Sub-rule (4) of rule 68B stipulates that where the sale of immovable property is not made in accordance with the provisions of sub rule (1), the attachment order in relation to the said property shall be deemed to have been vacated on the expiry of the period of limitation specified under that rule. Necessarily therefore, it has to be held that pursuant to Ext.P5 order of attachment the property attached -:4:- ## **W.P(C).No.22583 of 2011** thereunder cannot now be sold except after effecting a fresh order of attachment. I accordingly allow the writ petition, quash Ext.P16 and declare that Ext.P5 order of attachment stands vacated by efflux of time in accordance with the stipulations contained in rule 68B of the II Schedule to the Income Tax Act, 1961. Needless to say it will be open to the respondents to take fresh steps to recover the amounts due from the petitioner. **P.N.RAVINDRAN, Judge.** **ahg.** **P.N.RAVINDRAN, J. --------------------------W.P(C).No.22583 of 2011 ----------------------------** ## **JUDGMENT** **23[rd] August, 2011**