2016 (10) TMI 207 - HC - VAT and Sales Tax

Sale of property conducted by Revenue authorities - property having an extent of 6.59 ares in Sy.No.112/3-1 of Block 67 of Erattupetta village - Section 50 of the Kerala Revenue Recovery Act - attachment of property for recovery of duty with interest - prohibitory order passed by Court on 08/03/2011 - whether the sale could have been confirmed in view of the prohibition in the judgment of this Court in W.P.C.No.7119/2011? - amnesty scheme - Held that - in the order in W.P.C.No.7119/2011, Court had imposed a restriction on further recovery steps to be taken only on an application being submitted by the petitioner. Admittedly, the application was submitted only on 12/03/2011. True that Court had granted the petitioner seven days time to submit an application; but the fact remains that recovery steps were to be kept in abeyance only if an application was submitted within the stipulated time and thereafter recovery steps were to be kept in abeyance till a decision is taken on such application. Even according to the petitioner, he submitted an application for amnesty on 12/03/2011 which was allowed on 17/03/2011. He was granted time to remit the amount on 31/03/2011 and he did not remit the amount. Therefore the petitioner was not entitled to the benefit of amnesty. No steps were taken by the revenue authorities after filing an application dated 12/03/2011 and the sale was confirmed only on 29/10/2011 - error on the part of the revenue authorities in conducting sale of property and purchasing the property at Re.1/- especially when there were no bidders. Material irregularity in the issuance of notice - Held that - no such ground found. Present writ petition has been filed only to delay the process of recovery of sales tax dues. An amount of more than ₹ 4 crores is to be paid by the petitioner in addition to tax dues and his attempt is only to delay the process of recovery. No interference required with the sale conducted by the Revenue authorities - writ petition dismissed - decided in favor of Revenue.

Summary

Issues:
Challenge to revenue authorities' proceedings in conducting sale of property under Kerala Revenue Recovery Act; Validity of Ext.P6 order passed by Land Revenue Commissioner; Allegation of material irregularity in conduct of sale; Adjustment of property value towards sales tax dues; Delay tactics in recovery process.

Analysis:
1. The petitioner challenged the revenue authorities' proceedings in conducting the sale of a property under the Kerala Revenue Recovery Act. The property was purchased by the Government as bought-in-land invoking Section 50 of the Act. The petitioner appealed the decision, resulting in Ext.P2 order dated 29/10/2011. Subsequently, a revision before the Land Revenue Commissioner was rejected by Ext.P6 order. Other properties of the petitioner were also attached for recovery. An interim order was passed by the Court to halt the sale pending further orders.

2. The petitioner raised concerns regarding the rejection of appeals and revisions related to the sale proceedings. The focus shifted to the validity of Ext.P6 order dated 01/08/2014 passed by the Land Revenue Commissioner. The petitioner argued that the sale conducted on 10/03/2011 was in violation of a prohibitory order issued by the Court on 08/03/2011. However, the Court found no concrete evidence of irregularity in the sale process, emphasizing the need for proper notice as per statutory provisions.

3. The main contention revolved around the timing of the sale in relation to the petitioner's application for amnesty under the amnesty scheme. The Court noted that the petitioner's application for amnesty was submitted after the sale, rendering the petitioner ineligible for amnesty benefits. The Court highlighted the conditions set by the Court in a previous judgment regarding the submission of an application for amnesty and the subsequent recovery steps.

4. The Court addressed the argument of material irregularity in the issuance of notice, stating that such grounds were not raised by the petitioner in the present petition. It was suggested that the petition was filed to delay the recovery process for substantial tax dues. The Court emphasized the lack of provision in the Act for adjusting the fair value of bought-in land towards arrears, as highlighted in a previous judgment.

5. In conclusion, the Court found no error on the part of the revenue authorities in conducting the sale of the property, especially considering the absence of bidders. The Court dismissed the writ petition, emphasizing that each case must be assessed based on its unique circumstances and that no provision currently allows for adjusting the fair value of bought-in land towards dues under the Act.