2016 (11) TMI 750 - HC - VAT and Sales Tax

Scope and extent of Sec.49A of the Kerala General Sales Tax Act and Sec.79A of the Kerala Value Added Tax Act - Attachment of property - realisation of decree amount - violation of Order XXI Rule 46 of the Code of Civil Procedure and Sec.49A of the Kerala General Sales Tax Act - Held that - the amount collected as tax cannot be attached in execution of the decree or otherwise in view of the bar imposed under Sec.49A of the Kerala General Sales Tax Act and Sec.79A of the Kerala Value Added Tax Act - the impugned order passed in violation of Sec.49A of the Kerala General Sales Tax Act and Sec.79A of the Kerala Value Added Tax Act - attachment of property set aside - petition allowed - decided in favor of petitioner.

Summary

Issues:
Violation of Order XXI Rule 46 of the Code of Civil Procedure and Sec.49A of the Kerala General Sales Tax Act.

Analysis:
The petitioner, a Deputy Commissioner of Commercial Taxes, challenged an order allowing the attachment of an amount held for sales tax payment by the petitioner, in response to a decree holder's claim. The petitioner argued that the order violated Order XXI Rule 46 of the CPC and Sec.49A of the Kerala General Sales Tax Act. The petitioner filed an Original Petition seeking to quash the order under Article 227 of the Constitution of India.

The arguments presented highlighted that the impugned order contravened the relevant legal provisions. The Government Pleader referenced a previous court order and an Official Memorandum to support the contention that the attachment was impermissible under the law. Sec.49A of the Kerala General Sales Tax Act and Sec.79A of the Kerala Value Added Tax Act were cited, emphasizing the prohibition against attaching tax amounts collected and held before being due to the government.

The Court noted that the statutory provisions clearly barred the attachment of tax amounts collected by individuals. A previous Division Bench decision had addressed the same issue, underscoring the legal prohibition on attaching such funds. The Registry had issued a memorandum instructing subordinate courts to adhere to the legal restrictions on attaching tax amounts under the mentioned Acts.

In light of the legal provisions and precedents, the Court concluded that the impugned order indeed violated Sec.49A of the Kerala General Sales Tax Act and Sec.79A of the Kerala Value Added Tax Act. Consequently, the Court quashed the order allowing the attachment and allowed the Original Petition filed by the petitioner, upholding the statutory bar against attaching tax amounts collected by individuals.