9911796707
TMI Blog2006 (6) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... ort, the KSIDC , additional fifth respondent in W.P.C.No.23355 of 2003, has filed this appeal aggrieved by the direction of the learned single judge that it is open to the Government to proceed against the KSIDC for the recovery of sales tax arrears from the consideration received by the sale of the mortgaged properties by the fourth respondent in the writ petition. The fourth respondent, namely, Star Agro and Wheat Roller and Flour Mills (Pvt.) Ltd., had availed of a loan of Rs.88 lakhs from the KSIDC for which 1 acre 1 cents and 0.985 sq. links of land and the buildings thereon comprised in R.S.No.497/4, 5 and 6 of Naduvattom Amsom in Tirur taluk were mortgaged to the Corporation. The fourth respondent committed default in repaying the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ater came to know that the properties over which the State has got statutory charge have been sold by the KSIDC and were purchased by the petitioner. The petitioner was therefore served with exhibit P3 notice stating that the fourth respondent had defaulted payment of Rs. 34,86,120 towards sales tax arrears. The petitioner was informed that it has purchased properties over which the State has got a statutory first charge and those transactions are invalid under section 44(1) and (2) of the Kerala Revenue Recovery Act. The petitioner has challenged those proceedings in the present writ petition. The learned single judge of this court while disposing of the writ petition stated that if the tax claim of the Government has priority over the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder sections 26A and 26B of the KGST Act. The learned single judge has rightly held that the State can proceed against the sale consideration received by the KSIDC and the petitioner. The constitutional validity of section 26A of the KGST Act was considered by this court in Jaya v. State of Kerala [2005] 2 KLT 543 and this court held that the State Legislature is competent to enact such a provision in exercise of its legislative power under entry 54 of List II of the Seventh Schedule read with article 246 of the Constitution of India. This court in State of Kerala v.Rajmohan Cashew Pvt. Ltd. [2005] 142 STC 283; [2005] 2 KLT 131 held that the statutory first charge will prevail over any charge or right created in favour of a mortgagee/se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is not less than two lakh rupees shall pay tax on his taxable turnover for that year. The fourth respondent had defaulted payment of sales tax arrears for the years 1998-99 and 1999-2000. Consequently there would be a charge over the immovable property for the debt due on the land as a result of non-remittance of sales tax arrears. Taking over the property of the fourth respondent by the KSIDC and execution of sale deed on June 17, 2002 in favour of the petitioner took place only after the creation of charge for the sales tax arrears due for the years 1998-1999 and 1999-2000. The fourth respondent had defaulted sales tax due to the Government for the aforesaid years which would come to Rs.34,64,410 and a sum of Rs.21,710 as penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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