High Court of KeralaSingle Judge2014-02-13Disposed of

W.P.(C) Nos.2232 & 3628 of 2014

Case / Petition Number:WP(C).Nos.2232 of 2014 (D) and 3628 of 2014

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P.R.RAMACHANDRA MENON
Judgment Date: 2014-02-13
Court Decision / Holding: Directed to disburse the amount due to the petitioners in light of the Thomas v. District Collector decision, without deducting any income tax. The District Collector and Special Tahsildar LA Kochi Refineries Ltd. are to implement the order, and petitioners must provide a copy of the judgment to the respondents. Both writ petitions are disposed of.
Final Disposition: Disposed of

Parties to the Case

Appellants / Petitioners

Parameswaran Nair
Sukumaran Nair
Madanakumaran
M.G.Baby
Ammini
Arunkumar
Anu N.Many
Anju N.Many
Raju Joseph
George Paul
Shinil Abraham
Sosamma
Viswanathan
Prema
Vivekanandan
Sumathy
Vijumon
Sindu
Ramesan
Thakappan
Mini
Moly Poulouse
Ammini Kuria- kose
Vargehe
Byju P.Mathai
Biju Philip
P.C.Anna
Vicy V.Pulayath
Civy V. Pulayath
Joy @ KuriaKose
Joseph Varghe”]},
lawyers_after_parsing_with_errors_warning_reserved
respondents_involved_in_civil_heading_with_argu

Respondents

The District Collector, Ernakulam District, Civil Station, Kakkanad P.O., Kochi-30
The Special Tahsildar (LA), Kochi Reﬁneries Ltd., North Fort Gate, Tripunithura, PIN-682 301
BPCL Kochi Reﬁneries Ltd., Ambalamugal P.O., PIN-682 302
The Commissioner of Income Tax (TDS), Office of the Commissioner of Income Tax, C.R. Building, I.S. Press Road, PIN-682 018

Legal Representation & Advocates

Counsels for Petitioners

• Sri.T.K.Ajithkumar (Valath)
• Sri.Biju.V.John

Counsels for Respondents

• Mr.V.K.Rafeeq
• Sri.M.Gopikrishnan Nambiar
• Sri.Jose Joseph

Case Synopsis & Summary

The High Court of Kerala deals with tax withholding on sale proceeds arising from land notified for acquisition under the Land Acquisition Act. A large number of petitioners claim that their properties were transferred to the Government after negotiated sale following notices under Section 9(3) of the Land Acquisition Act. They contend that, although the sale price exceeds fifty lakh, the properties are agricultural and situated in a Panchayath area, and therefore income tax must not be deducted at source under Sections 194LA and 194IA of the Income Tax Act, 1961. The petitioners challenge the demand for deduction and seek relief from withholding tax, arguing that agricultural lands in such contexts should not be taxed and that deduction would be contrary to the statutory scheme and prior jurisprudence. The respondents maintain that income tax must be withheld as per the relevant provisions. After hearing both sides, the Court notes a precedent in Thomas v. District Collector (2013 (3) KLT 941) and holds that the issue is squarely covered by that decision. Consequently, the District Collector and the Special Tahsildar LA Kochi Refineries Ltd. are directed to disburse the contested amounts to the petitioners in light of the cited decision, without deducting income tax. The petitions are disposed of, with directions to furnish copies of the judgment to the respondents for implementation.

Provisions of Law Cited

Section 9(3) of the Land Acquisition ActSection 194LA of the Income Tax Act, 1961Section 194IA of the Income Tax Act, 1961

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners submit that the sale of land acquired under Section 9(3) of the Land Acquisition Act, though negotiated, pertains to agricultural properties located in a Panchayath area. They contend that Section 194LA and Section 194IA of the Income Tax Act, 1961, do not require tax deduction on such sale proceeds, as the lands are agricultural and situated within a panchayath limit. Given the agricultural nature and location, withholding income tax would be improper and contrary to the statutory framework. They rely on the corollary that no TDS applies to agricultural land in this context and urge the Court to follow the precedent set in Thomas v. District Collector (2013 (3) KLT 941), directing that no tax deduction be made and the sale proceeds disbursed without withholding. They request a declaration to this effect and production of the judgment copy for implementation by respondents.

Contentions of Respondents

The respondents argue that income tax must be deducted from the sale proceeds under Sections 194LA and 194IA of the Income Tax Act, given the transaction’s nature and value, irrespective of the agricultural character of the land. They contend that withholding at source is a statutory requirement and that the sale to the Government triggers tax deduction under the relevant provisions. They maintain that the petitioners’ agricultural classification does not automatically exempt them from TDS in such negotiated acquisitions and that tax compliance must be enforced unless a contrary judicial ruling explicitly applies.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Thomas v. District Collector	2013 (3) KLT 941	Positive	The court relies on this decision to hold that no income tax should be deducted from the sale proceeds in similar circumstances; the issue is squarely covered by the cited precedent.

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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.R.RAMACHANDRA MENON** ## **THURSDAY, THE 13TH DAY OF FEBRUARY 2014/24TH MAGHA, 1935** ## **WP(C).No. 2232 of 2014 (D)** **---------------------------** ## **PETITIONER(S):** - **-----------------------** **1. PARAMESWARAN NAIR, S/O.KRISHNAN, VAPPALA HOUSE, KAKKAD, MAMALA P.O.** **2. SUKUMARAN NAIR, S/O.PARAMESWARAN NAIR, MULLAKKAL KAROTTU HOUSE, MAMALA P.O.** **3. MADANAKUMARAN, S/O. PARAMESWARAN NAIR, MULLAKKAL KAROTTU HOUSE, MAMALA P.O.** **4. M.G.BABY, MURRIYIKKAL HOUSE, KAKKAD, MAMALA P.O.** **5. AMMINI, W/O. MANY, NEDUNTHURUTHIL HOUSE, KAKKAD, MAMALA P.O.** **6. ARUNKUMAR, S/O. MANY, NEDUNTHURUTHIL HOUSE, KAKKAD, MAMALA P.O.** **7. ANU N.MANY, D/O. MANY, NEDUNTHURUTHIL HOUSE, KAKKAD, MAMALA P.O.** **8. ANJU N.MANY, D/O. MANY, NEDUNTHURUTHIL HOUSE, KAKKAD, MAMALA P.O.** **9. RAJU JOSEPH, S/O. JOSEPH, KOLAPPILLIL HOUSE, KOKKAPPILLIL, THIRUVANIYOOR VILLAGE.** **10. GEORGE PAUL, S/O. PAILY, PALOOPARAMBIL HOUSE, THIRUVANKULAM P.O.,** **11. SHINIL ABRAHAM, PAINATH HOUSE, THIRUVANIYOOR VILLAGE, MAMALA P.O.** **12. SOSAMMA, W/O. THAMBI, THONATTU HOUSE, KAKKAD, MAMALA P.O.** **13. VISWANATHAN, S/O. KUNJUNNI NAIR, AMMANCHERIL HOUSE, MAMALA P.O.** **WP(C).No. 2232 of 2014 (D)** ## **14. PREMA, W/O. VISWANATHAN, AMMANCHERIL HOUSE, MAMALA P.O.** **15. VIVEKANANDAN, S/O. RAMAN NAIR, ANAND BHAVAN, KAKKAD, MAMALA P.O.** **16. SUMATHY, W/O.SANKARAN, VARAMBURATH HOUSE, KAKKAD, MAMALA P.O.** **17. VIJUMON, S/O. SANKARAN, VARAMBURATH HOUSE, KAKKAD, MAMALA P.O.** **18. SINDU, D/O. SANAKARAN, VARAMBURATH HOUSE, KAKKAD, MAMALA P.O.** **19. RAMESAN, S/O. NARAYANAN NAIR, KARULLIL HOUSE, KAKKAD, MAMALA P.O.** **20. THAKAPPAN, S/O. PAPPU, OORADIKKAL HOUSE, KAKKAD, MAMALA P.O.** **21. MINI, D/O. VARGHESE, CHETTIYAT HOUSE, KOKADAPARAMBIL, AMBALAMUGAL P.O.** **22. MOLY POULOSE, W/O. POULOSE, VEEPANATH HOUSE, ADDOORKARA, AMBALAMUGAL P.O.** **23. AMMINI KURIAKOSE, W/O. KURIAKOSE, VEEPANATH HOUSE, ADDOORKARA, AMBALAMUGAL P.O.** **24. VARGHESE, S/O. PATHROSE, MUTTAKATTU KUZHY HOUSE, AMBALAMUGAL P.O.** **25. BYJU P.MATHAI, S/O. MATHAI, POONATTU HOUSE, THIRUBANKULAM P.O.** **26. BIJU PHILIP, S/O. PHILIP, MUREEKKAL HOUSE, RAMAMANGALAM P.O.** **27. P.C. ANNA, W/O. VARGHESE, PULAYATH HOUSE, KAKKAD, MAMALA P.O.** **28. VICY V.PULAYATH, D/O. VARGHESE, PULAYATH HOUSE, KAKKAD, MAMALA P.O.** **29. CIVY V. PULAYATH, S/O. VARGHESE, PULAYATH HOUSE, KAKKAD, MAMALA P.O.** **WP(C).No. 2232 of 2014 (D)** **30. JOY @ KURIAKOSE, S/O. GEORGE, MUREEKKAL HOUSE, KAKKAD, MAMALA P.O.** **31. JOSEPH, S/O. VARGHESE, PAINATH HOUSE, VENMANI, MAMALA P.O.** **BY ADVS.SRI.T.K.AJITHKUMAR (VALATH), SRI.BIJU.V.JOHN.** **RESPONDENT(S):** **----------------------------** **1. THE DISTRICT COLLECTOR, ERNAKULAM DISTRICT, CIVIL STATION, KAKKANAD P.O., KOCHI-30.** **2. THE SPECIAL TAHSILDAR (LA), KOCHI REFINERIES LTD., NORTH FORT GATE, TRIPUNITHURA, PIN-682 301.** **3. BPCL KOCHI REFINERIES LTD., AMBALAMUGAL P.O., PIN-682 302.** **4. THE COMMISSIONER OF INCOME TAX (TDS), OFFICE OF THE COMMISSIONER OF INCOME TAX, C.R. BUILDING, I.S. PRESS ROAD, PIN-682 018.** **R1 & R2 BY GOVT. PLEADER MR.V.K. RAFEEQ. R3 BY ADV. SRI.M.GOPIKRISHNAN NAMBIAR, SC. R4 BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX.** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13-02-2014, ALONG WITH WP(C).NO. 3628 OF 2014,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **rs.** **WP(C).No. 2232 of 2014 (D)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:-** **EXHIBIT P1THE TRUE COPY OF THE NOTICE ISSUED TO THE 1ST PETITIONER. EXHIBIT P2THE TRUE COPY OF THE NOTICE ISSUED TO THE2ND AND 3RD PETITIONERS DATED 26-12-2013. EXHIBIT P3THE TRUE COPY OF THE NOTICE ISSUED TO THE 4TH PETITIONER. EXHIBIT P4THE TRUE COPY OF THE NOTICE ISSUED TO THE 5TH TO 8TH PETITIONER DATED 26-12-2013. EXHIBIT P5THE TRUE COPY OF THE NOTICE ISSUED TO THE 9TH PETITIONER DATED 26-12-2013. EXHIBIT P6THE TRUE COPY OF THE NOTICE ISSUED TO THE 10TH PETITIONER DATED 26-12-2013. EXHIBIT P7THE TRUE COPY OF THE NOTICE ISSUED TO THE 11TH PETITIONER. EXHIBIT P8THE TRUE COPY OF THE NOTICE ISSUED TO THE 12TH PETITIONER DATED 26-12-2013. EXHIBIT P9THE TRUE COPY OF THE NOTICE ISSUED TO THE 13TH & 14TH PETITIONERS DATED 26-12-2013. EXHIBIT P10THE TRUE COPY OF THE NOTICE ISSUED TO THE 15TH PETITIONER DATED 26-12-2013. EXHIBIT P11THE TRUE COPY OF THE NOTICE ISSUED TO THE 16TH TO 18TH PETITIONER DATED 26-12-2013. EXHIBIT P12THE TRUE COPY OF THE NOTICE ISSUED TO THE 19TH PETITIONER. EXHIBIT P13THE TRUE COPY OF THE NOTICE ISSUED TO THE 20TH PETITIONER DATED 26-12-2013. EXHIBIT P14THE TRUE COPY OF THE NOTICE ISSUED TO THE 21ST PETITIONER DATED 26-12-2013. EXHIBIT P15THE TRUE COPY OF THE NOTICE ISSUED TO THE 22ND PETITIONER DATED 26-12-2013. EXHIBIT P16THE TRUE COPY OF THE NOTICE ISSUED TO THE 23RD PETITIONER DATED 26-12-2013.** **2/-..........** **WP(C).No. 2232 of 2014 (D)** **EXHIBIT P17THE TRUE COPY OF THE NOTICE ISSUED TO THE 24TH PETITIONER DATED 26-12-2013.** **EXHIBIT P18THE TRUE COPY OF THE NOTICE ISSUED TO THE 25TH PETITIONER DATED 26-12-2013.** **EXHIBIT P19THE TRUE COPY OF THE NOTICE ISSUED TO THE 26TH PETITIONER DATED 26-12-2013.** **EXHIBIT P20THE TRUE COPY OF THE NOTICE ISSUED TO THE HUSBAND OF PETITIONER 27 AND FATHER OF PETITIONER 28 & 29 DATED 26-12-2013.** **EXHIBIT P21THE TRUE COPY OF THE NOTICE ISSUED TO THE 30TH PETITIONER DATED 26-12-2013.** **EXHIBIT P22THE TRUE COPY OF THE NOTICE ISSUED TO THE 31ST PETITIONER DATED 26-12-2013.** **RESPONDENT'S EXHIBITS:NIL.** ## **//TRUE COPY//** ## **P.A. TO JUDGE** **rs.** ## P.R.RAMACHANDRA MENON, J. --------------------------------------- W.P.(C) Nos.2232 & 3628 of 2014 () ---------------------------------------Dated this the 13[th] day of February, 2014 ## JUDGMENT The properties of the petitioners in both the cases are transferred to Government on negotiated after issuing notices under Section 9(3) of the Land Acquisition Act. Though, the purchase price is more than `50 lakhs, the properties in both the cases are agricultural properties and are situated in a Panchayath area. Therefore, according to the petitioners, no tax is liable to be deducted either under Section 194 LA or under Section 194 IA of the Income Tax Act, 1961. But the respondents are insisting to deduct income tax from the sale price payable to the petitioners and hence these writ petitions. - 2.Heard the learned Government Pleader as well as the learned Standing Counsel for the respondents 3 and 4. 2 W.P.(C) Nos.2232 & 3628 of 2014 3.After hearing both the sides, this Court finds that the issue is squarely covered by the decision rendered by this Court in Thomas v. District Collector [2013 (3) KLT 941]. In the said circumstance, the respondents 1 & 2 [District Collector and Special Tahsildar LA (NH)] are directed to disburse the amount due to the petitioners in the light of the decision cited supra. The petitioners shall produce a copy of the judgment along with a copy of the writ petition before the concerned respondents for further steps. Both the writ petitions are disposed of. sd/- ## P.R. RAMACHANDRA MENON, JUDGE AMV/14/2/ The third paragraph of the common judgment dated 13.02.2014 in W.P.(C) Nos.2232/2014 and 3628/2014 is modified as follows : “3. After hearing both the sides, this Court finds that the issue is squarely covered by the decision 3 W.P.(C) Nos.2232 & 3628 of 2014 rendered by this Court in Thomas v. District Collector [2013 (3) KLT 941]. In the said circumstance, the respondents 1 & 2 (District Collector and Special Tahsildar (LA) Kochi Refineries Ltd., are directed to disburse the amount due to the petitioners in the light of the decision cited supra, without deducting any amount as income tax. “ vide order dated 25.03.2014 in W.P.(C) Nos.2232 & 3628 of 2014 sd/Registrar (Judicial)