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TMI Blog2005 (3) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... e licence so granted would expire on August 7, 2005. Similarly, the first petitioner has granted another licence to the third respondent for running a refreshment room at Jamkhandi bus stand for a period of six years commencing from June 20, 2002 on a monthly licence fee of Rs. 28,500 for the first year with escalation of 10 per cent every year thereafter. The general standing orders of the Corporation provides for collection of security deposit from the licensees of commercial establishments for the due performance of the terms and conditions of the agreement of licence. The agreements entered into for the said purpose are at annexures A and B respectively. The third respondent has deposited Rs. 94,800 towards security deposit in respect of the first agreement. In respect of the second agreement, the third respondent has deposited nine times the offered amount towards security deposit. 3.. The third respondent is an assessee borne on the file of the second respondent. It appears that the third respondent has defaulted in payment of taxes. The second respondent issued garnishee notices under section 14 of the KST Act to the petitioner attaching the aforesaid security deposit hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded to the dealer at his last address known to the assessing authority) require any person from whom money is due or may become due to the dealer or any person who holds or may subsequently hold money for or on account of the dealer to pay to the assessing authority, either forthwith upon the money becoming due or being held at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the dealer in respect of arrears of tax or penalty or the whole of the money when it is equal to or less than that amount. (2) to (4)............ (5) Where any person to whom a notice under this section is sent objects to it on the ground that the sum demanded or any part thereof is not due by him to the dealer or that he does not hold any money for or on account of the dealer, then nothing contained in this section shall be deemed to require such person to pay the sum demanded or any part thereof, to the assessing authority. 9.. The section provides a machinery for the department to collect tax arrears from the debtors of the assessee. It is in substance the garnishee proceedings under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be payable forthwith, solvendum in praesenti, then it is a debt 'due' or it may be payable at a future date, solvendum futuro; then it is a debt 'accruing'. But in either case it is a debt. But a contingent debt has no present existence, because it is payable only when the contingency happens, and ex hypothesi that may or may not happen. 12.. In the case of Hyderabad Co-operative Commercial Corporation Ltd. v. Syed Mohiuddin Khadir (dead) by LRs. AIR 1975 SC 2254, it has been held that to be capable of attachment, there must be in existence at the date when the attachment becomes operative something, which the law recognizes as a debt. So long as there is a debt in existence, it is not necessary that it should be immediately payable. Where any existing debt is payable by future instalments the garnishee order may be made to become operative as and when each instalment becomes due. The debt must be one, which the judgment-debtor could himself enforce for his own benefit. A debt is a sum of money which is now payable or will become payable in the future by reason of a present obligation. 13.. In Karnataka Bank Ltd. v. Commissioner of Commercial Taxes in Kar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forthwith as on the date of receipt of notice or it may be that such liability would mature after the notice. But as on the date of service of notice, the person should be under an existing obligation to pay the amounts to the assessee. It does not include a contingent debt which is no debt till the contingency happens. 16.. In the present case, the relationship between the defaulting assessee and the petitioner-corporation is that of licensor and licensee. A licence is defined as a right to do or continue to do in or upon the immovable property of the grantor something which would in the absence of such right be unlawful and such right does not amount to an easement or an interest in the property. The security deposit with the corporation is intended for due performance of licence. In Stroud's Judicial Dictionary the following meaning is given to the word security : A 'security' speaking generally is anything that makes the money more assured in its payment or more readily recoverable; as distinguished from, e.g., a mere I.O.U. which is only evidence of debt. In Black's Law Dictionary, the meaning given to the term security deposit is as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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