P. T. Chandukutty v. Commercial Tax Officer, Koyilandy, Kozhikode and The State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** ## **THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON** **TUESDAY, THE 2ND DAY OF DECEMBER 2014/11TH AGRAHAYANA, 1936** ## **WP(C).No. 21450 of 2014 (E)** **--------------------------------------** ## **PETITIONER(S):** **-----------------------** **P.T.CHANDUKUTTY, 'VIDYA', KURUVANGAD P.O., KOYILANDI, KOZHIKODE - 673 620.** **BY ADV. SRI.A.KRISHNAN** ## **RESPONDENT(S):** **--------------------------** **1. THE COMMERCIAL TAX OFFICER, KOYILANDY, KOZHIKODE - 673 305.** **2. THE STATE OF KERALA,** - **REPRESENTED BY THE SECRETARY, COMMERCIAL TAXES DEPARTMENT, THIRUVANANTHAPURAM - 695 001.** **BY SENIOR GOVERNMENT PLEADER SMT.SHOBA ANNAMMA EAPEN** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02-12-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **msv/** ## **WP(C).No. 21450 of 2014 (E)** ## **---------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** ## **-------------------------------------** **EXHIBIT P1. TRUE COPY OF THE AUCTION NOTICE DATED 02.02.2010 ISSUED TO THE PETITIONER.** **EXHIBIT P2. TRUE COPY OF THE NOTICE DATED 05.09.2008 EVIDENCING THE PETITIONER'S PROPERTY IS MADE BOUGHT-IN LAND FOR REALIZATION OF PENALTY.** **EXHIBIT P3. TRUE COPY OF THE ABOVE ORDER OF THIS HON'BLE COURT IN W.P.(C)NO.4799 OF 2010 DATED 15.02.2010.** **EXHIBIT P4. TRUE COPY OF THE NOTICE 25.05.2010 ISSUED BY 1ST RESPONDENT TO THE PETITIONER.** **EXHIBIT P5(a). TRUE COPY OF THE CHALAN RECEIPT DATED 25.02.2010, EVIDENCING THE PAYMENT PURSUANT TO EXT.P4 ORDER - IST INSTALLMENT. EXHIBIT P5(b). TRUE COPY OF THE CHALAN RECEIPT DATED 27.03.2010, EVIDENCING THE PAYMENT PURSUANT TO EXT.P4 ORDER - 2ND INSTALLMENT. EXHIBIT P5(c). TRUE COPY OF THE CHALAN RECEIPT DATED 26.04.2010, EVIDENCING THE PAYMENT PURSUANT TO EXT.P4 ORDER - 3RD INSTALLMENT. EXHIBIT P5(d). TRUE COPY OF THE CHALAN RECEIPT DATED 27.05.2010, EVIDENCING THE PAYMENT PURSUANT TO EXT.P4 ORDER - 4TH INSTALLMENT.** **EXHIBIT P6. TRUE COPY OF THE CHALAN RECEIPT DATED 04.06.2010 FOR PAYMENT.** **EXHIBIT P7. TRUE COPY OF THE CERTIFICATE ISSUED BY 1ST RESPONDENT DATED 04.01.2011.** **EXHIBIT P8. TRUE COPY OF THE NOTICE DATED 04.01.2011 ISSUED TO PETITIONER BY 1ST RESPONDENT.** **EXHIBIT P9. TRUE COPY OF ORDER DATED 28.03.2011 OF THIS HON'BLE COURT.** ## **EXHIBIT P10. TRUE COPY OF THE CHALAN RECEIPT DATED 30.03.2011.** **EXHIBIT P11. TRUE COPY OF THE NOTICE DATED 27.09.2011 ISSUED TO PETITIONER BY 1ST RESPONDENT.** ## **EXHIBIT P12. TRUE COPY OF CHALAN RECEIPT DATED 29.09.2011.** **msv/** **-2-** **-2-** **WP(C).No. 21450 of 2014 (E)** **---------------------------------------** **EXHIBIT P13. TRUE COPY OF THE JUDGMENT IN W.P.(C) NO.4799 OF 2010, DATED 24.02.2012.** **EXHIBIT P14. TRUE COPY OF THE NOTICE DATED 07.05.12 ISSUED TO THE PETITIONER.** **EXHIBIT P15. TRUE COPY OF THE ORDER IN R.P.NO.882 OF 2012 DATED 12.12.2013.** **EXHIBIT P16. TRUE COPY OF THE ORDER DATED 01.07.2014 IN W.P.(C)NO.14548 OF 2012 (P).** **RESPONDENT(S)' EXHIBITS:** **-----------------------------------------** ## **NIL** **//TRUE COPY//** **P.S.TO JUDGE.** Msv/ ## **P.R. RAMACHANDRA MENON, J.** ======================== ## W.P.(C). No. 21450 of 2014 -------------------------------------------Dated this the 2[nd] day of December, 2014 ## **JUDGMENT** The petitioner has approached this Court with the following prayers: “1. Through issuing a writ of certiorari or any other appropriate writ, order or direction call for the records pertaining to Ext.P14 and quash Ext.P14. 2. through issuing a writ of mandamus or any other appropriate writ, order or direction command the 1[st] respondent to re-compute the liability by adjusting the amount paid under Ext.P5(b) (c) and (d) towards the principal amount of the sales tax arrears for the year 2000-01. 3. through issuing a writ of mandamus or any other appropriate writ, order or direction command the 1[st] respondent to waive all alleged interests amount of the sales tax arrears for the year 2000-01 as per the stipulations of the Amnesty Scheme floated by the 2[nd] respondent.” 2. The main grievance of the petitioner is with regard to the course and proceedings pursued by the respondents in appropriating various amounts effected by the petitioner by deposits at different points of time, simply crediting against the W.P.C. No. 21450 of 2014 -2- interest portion, instead of crediting the same towards the principal amount and denying to extend the benefit under the Amnesty Scheme to have the liability liquidated accordingly. It is contended that, pursuant to different notices issued to the petitioner, the liability has been substantially scaled down, also with the intervention of this Court at different points of time. The sequence of events is as follows: 3. The petitioner was sought to be proceeded against in respect of 'penalty' to the tune of 15,95,503/- for the year 2002₹ -2003 by issuing Ext.P2 notice dated 5.09.2008 and the 'tax liability' of 27,07,201/-vide Ext.P1 notice dated 2.02.2010. The₹ petitioner approached this Court by filing W.P.(C). No. 4799 of 2010 and after hearing both the sides, the writ petition was admitted, passing Ext.P3 interim order directing the petitioner to satisfy a sum of 16 lakhs by way of 'four' equal monthly₹ instalments; the first of which was to be effected on or before 27.02.2010; followed by similar instalments to be effected on or before 27[th] of the succeeding months. It is stated that, the said condition was satisfied by the petitioner by effecting the deposits W.P.C. No. 21450 of 2014 -3- on 25.02.2010, 21.03.2010, 26.04.2010 and 27.05.2010 as evident from Ext.P5 series of receipts. 4. The application preferred by the petitioner for extending the benefit of Amnesty Scheme was considered and the petitioner was directed to satisfy the amount by way of 'three' equal instalments as stated in Ext.P4 proceedings dated 25.05.2010. The total figure shown therein is 21,80,609/-; out of which ₹ ₹ 16,352/- is towards Sales Tax and Interest for the year 20012002. This amount was stated as satisfied as borne by Ext.P6 receipt and the balance was only in respect of the year 20002001. 5. Despite satisfaction of the amount as above, the petitioner was required to satisfy another sum of 17,64,257/-₹ for the year 2000-2001 as per Ext.P7 notice dated 4.1.2011. The quantification of liability in this regard is shown in Ext.P8, which according to the petitioner reveals that, out of the total sum of ₹ 16 lakhs deposited pursuant to the interim order passed by this Court, only a sum of 4 lakhs came to be credited against the₹ principal amount, whereas the balance 12 lakhs was set off₹ W.P.C. No. 21450 of 2014 -4- against the interest portion. It is stated that, the manner of appropriation was also subjected to challenge by the petitioner in W.P(C). No. 4799 of 2010, wherein Ext.P9 order came to be passed on 28.03.2011 in the following terms: “Post the matter for hearing after vacation. Meanwhile, the petitioner is permitted to make payment of the amounts demanded under Ext.P18 or any amount which may be fixed by the assessing authority towards amnesty settlement, on or before 31.03.2011, subject to the challenge now raised against correctness of the amount demanded there under and subject to final result of this Writ Petition.” 6. Since the Amnesty Scheme was to come to an end on 30.3.2011, the petitioner was required by the concerned authorities to satisfy a sum of 6,38,382/- on or before the said₹ date, which in turn was satisfied as borne by Ext.P10 receipt. Thereafter, the petitioner was served with another notice dated 27.9.2011 as borne by Ext.P11, asking the petitioner to satisfy a further sum of ₹57,419/-(which according to the learned Government Pleader is only a portion of the amount as disclosed in Ext.P14). This amount was also satisfied by the petitioner as borne by Ext.P12 receipt dated 29.09.2011. W.P.C. No. 21450 of 2014 -5- 7. When the writ petition came up for further consideration before this Court, it was submitted from the part of the respondents that, penalty has already been satisfied by the petitioner in respect of the 2002-2003 and the sole remaining liability was in respect of the assessment for the previous year. In the said circumstance, the grievance of the petitioner with regard to the re-conveyance of land which was taken over by the Government as 'brought in land' as per Section 50(2) of the RR Act, was ordered to be considered, subject to satisfaction of the current market value of the land, as specified by the Government in the Government Order dated 22.3.1966. The learned counsel for the petitioner points out that, pursuant to satisfaction of the market value of the property, the land now stands re-conveyed to the petitioner. 8. While so, the Government sought to file a R.P. No. 882 of 2012 referring to an inadvertent mistake caused while passing Ext.P13 judgment in W.P.(C). No. 4799 of 2010. After hearing both the sides, the said review petition was allowed as per Ext.P15 order dated 12.12.2013, whereby the case of the W.P.C. No. 21450 of 2014 -6- respondents with reference to the liability to be cleared in respect of the assessment year 2000-2001, 2001-2002 under the Amnesty Scheme was brought alive. As per the last sentence of the said order, it was clarified that, in case any proceedings for recovery in relation to the concerned years are taken, it will be open for the petitioner to dispute the same in accordance with law. Incidentally, it is brought to the notice of this Court that, the petitioner had challenged the correctness and sustainability of Ext.P14 notice dated 7.5.2012 by filing W.P.(C). No. 14548 of 2012. But in view of the subsequent proceedings, particularly by way of Ext.P15 order passed in the review petition, the said writ petition was caused to be dismissed as withdrawn, without prejudice to the rights and liberties to pursue the matter in accordance with law. The grievance of the petitioner is that, the scope and benefit of the Amnesty Scheme declared by the Government have been virtually defeated and denied to the petitioner and appropriation has been done rather arbitrarily, just with reference to Section 55 C of the KGST Act. The learned counsel also points out that, since the matter came to be W.P.C. No. 21450 of 2014 -7- finalized earlier based on the submission made by the learned Government Pleader, while passing Ext.P13 judgment, the challenge raised with regard to the manner of appropriation could not be highlighted, argued or cause to be considered while passing Ext.P13 judgment or the subsequent order in Review Petition by way of Ext.P15. In view of the right reserved in favour of the petitioner vide Ext.P14, it is still open for the petitioner to challenge the same and hence the writ petition; submits the learned counsel. 9. The learned Government Pleader points out with reference to the contents of the counter affidavit filed by the 1[st] respondent that, the petitioner did not avail the opportunity for discharging the liability under the Amnesty Scheme. It is also pointed out that, Ext.P14 was only a notice which however came to be finalized by passing order as early as on 13.6.2012. Paragraph '8' of the counter affidavit is relevant which is as follows: ## “xxxxxxxxxx 8. The petitioner has not remitted that amount as per the permission granted under amnesty schemer for W.P.C. No. 21450 of 2014 -8- the assessment year 2000-01 amounting Rs.21,64,257/-. Notice dated 07.05.2012 proposing revocation of permission granted was issued and the proposal has been given effect as per order dated 13.06.2012. Since Rs.12 lakhs had been remitted prior to the date of filing option under amnesty scheme i.e., on 14.05.2010, the same was adjusted towards the interest due as per Section 55(C) of the KGST Act.” 10. It is not brought to the notice of this Court from the part of the respondents as to how Ext.P14 came to be finalized. It is also not seen whether the notice was issued by registered post, whether the proceedings were finalized with regard to the revocation of permission granted under the Amnesty proposal after giving an opportunity of hearing and whether the concerned order stated as passed on 13.6.2012 was forwarded to the petitioner by registered post. The counter affidavit is also silent as to the manner in which the service was effected and whether any further proceedings were pursued by the petitioner after service of such order. The learned counsel for the petitioner places reliance on the decision rendered by this Court in **M/s. Alwaye Sugar Agency v. Commercial Tax Officer, Alwaye & Others** 2010 (3) KLJ 161, as to the scope of the relevant W.P.C. No. 21450 of 2014 -9- provisions of law and the Amnesty Scheme declared by the Government. Specific reference is made to paragraphs 11 and 13 which are extracted below: “xxxxxxxx 11. With regard to the judgment rendered by the Division Bench in WA 298 of 2010, the benefit granted in terms of sub-S.4 of S.23 B of the KGST Act was withdrawn, for violating the conditions of the 'Amnesty Scheme', as stipulated under subclause/sub-S5. Still, the learned Single Judge allowed the claim of the assessee, referring to the pendency of the application for rectification of the assessment when the application for Amnesty Scheme was filed, observing that, the 'time requirement' as specified under the Scheme could not have been widened under any circumstances and further that, if the assessee succeeded in furtherance to the appeal, revision or rectification, the benefit could be claimed by way of refund of the tax paid under the 'Amnesty Scheme' as provided under the sub-S.7 of S.23 B. Observing that, the Scheme, statutory prescription and the time frame were to be strictly followed, which could not have been extended by the learned Single Judge, interference was made, allowing the Writ Appeal filed by the department in part, to the above extent. This decision is also not applicable to the case in hand, as the situation pointed out is not with regard to the extension of time limit. Even if it is assumed for the sake of a moment, that the petitioner has not complied with the demand, as stipulated in Ext.P3 order granting the benefit W.P.C. No. 21450 of 2014 -10- of the Scheme, the fact remains that the Scheme itself, which was originally notified w.e.f. 01/04/2010 till 30/06/2010 has now been extended till 30/09/2010. As such, the said decision is not liable to be considered as a binding precedent to the issue in hand. xxxxxxxxxxxx 13. Obviously, the declaration of the Scheme and the benefit sought to be extended thereunder, enabling the defaulters to opt for the same, to clear the liability, availing the benefit of waiver of a substantial portion of the liability was with an intent to generate revenue in a better and effective manner, rather as a measure of 'give and take' policy. The success of the Scheme notified earlier, with regard to the revenue collection, the factual circumstance that the several persons could not make use of the opportunity because of the time limit and other adverse circumstances as given in Ext.P1 Budget Speech etc. weighed much and the 'Legislature' thought it fit to re-notify the Scheme, providing necessary provisions in the Finance Bill 2010. Declaration of such Scheme is purely a matter of 'Policy' of the Government. Once such a 'Policy' was declared and proclaimed to be given effect to from 01/04/2010, the first question that comes up for consideration is whether there could have been any further coercive proceedings under the Kerala Revenue Recovery Act from the part of the respondents, particularly the second respondent. The petitioner was very much at liberty to wait till 01/04/2010, filing necessary application to have his matter considered as to the eligibility and to have satisfied the liability without effecting any 'pre deposit' as done by him in the instant W.P.C. No. 21450 of 2014 -11- case. As put it clear in Ext.P2, it was only as a 'token of willingness/bone fides' to avail the benefit of the Scheme announced vide Ext.P1, that the petitioner effected payment of Rs.75,000/- specifically seeking the same to be given credit to, in respect of the amount payable under the Scheme and not otherwise. To put it more clear, the benefit contemplated and sought to be given by the Government by virtue of the 'Amnesty Scheme' as a matter of policy, specifying the manner of appropriation, rather stand on a different/higher pedestal, notwithstanding the manner of appropriation as provided under S.55C.” It is contended from the part of the petitioner that, appropriation under the Amnesty Scheme declared by the Government, as a matter of policy, stands on a different pedestal, notwithstanding the normal manner of appropriation as provided under Section 55C. 11. After hearing both the sides, this Court finds that this is a fit case where a further opportunity can be given to the petitioner to highlight the factual and legal aspects by setting him at liberty to submit a detail objection in response to Ext.P14. This shall be done at the earliest at any rate within 'two weeks' from the date of receipt of a copy of this judgment, upon which W.P.C. No. 21450 of 2014 -12- the same shall be considered and appropriate orders shall be passed in accordance with law, also in the light of the verdict passed by this Court as per the decision cited supra and after giving an opportunity of hearing in this regard. This exercise shall be completed at the earliest at any rate within 'three months' from the date of filing the objection as above. Further coercive steps shall be kept in abeyance till such time. The petitioner shall produce a copy of the judgment along with a copy of the writ petition before the concerned respondent for further steps. The writ petition is disposed of. ## **P.R. RAMACHANDRA MENON, JUDGE.** kp/-