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TMI Blog2009 (4) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... Act is not attracted and if at all it can be said the provisions of section 13 of the KST Act are attracted. In this view of the matter, annexure B garnishee notice is definitely not supported by law. Respondents Nos. 3 and 4 are not entitled to attach the bank accounts of the petitioner which has nothing to do with the property in question and cannot enforce the notices to compel respondents Nos. 8 to 11 to make over the amount at the credit of the petitioner to the State Government, thus annexure B notice dated March 4, 2009 is quashed by issue of a writ of certiorari. - Writ Petition Nos. 6123 to 6136 of 2009 - - - Dated:- 17-4-2009 - SHYLENDRA KUMAR D.V. , J. ORDER:- D.V. SHYLENDRA KUMAR J. Writ petitions by a person who was the auction purchaser of certain immovable properties which were put to auction sale on April 5, 2006 by the second respondent-Karnataka State Financial Corporation for non-payment of loan borrowed by respondents Nos. 5 to 7-partners of M/s. Hari Industries and Renuka Enterprises located at Challakere town of Chitradurga District. The proposed auction which had been notified on July 14, 2005 and after the bid of the petitioner was acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty as respondents Nos. 5 to 7 and the banks on whom the Commercial Taxes Department has served the garnishee notices figuring as respondents Nos. 8 to 11 to the petition. Emergent notices had been issued to the respondents and learned Government Pleader had been directed to take notice for respondents Nos. 3 and 4. While the first respondent-Karnataka State Financial Corporation is represented by Sri Rudragouda, learned counsel who takes notice for second respondent also, respondents Nos. 3 and 4-officials of the Commercial Taxes Department are represented by Sri Shivayogiswamy, learned Government Pleader, the fifth respondent one of the partners of M/s. Hari Industries which had owned the property purchased by the petitioner is represented by M/s. Siddappa and Sunildutt Yadav, learned counsel who takes notice for respondents Nos. 6 and 7 also, the tenth respondent-State Bank of India is represented by Sri Veerendra Patil, Advocate, respondents Nos. 8, 9 and 11 banks who are said to have been served are not represented, these writ petitions, though had been listed for orders regarding taking fresh steps for service of notice on the sixth and the seventh respondents, with this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82 which reads as under: 55. Rights and liabilities of buyer and seller. (1) The seller is bound, (g) to pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all encumbrances on such property due on such date, and except where the property is sold subject to encumbrances, to discharge all encumbrances on the property then existing. 69. Power of sale when valid. (1) . . . . (4) The money which is received by the mortgagee, arising from the sale, after discharge of prior encumbrances, if any, to which the sale is not made subject, or after payment into court under section 57 of a sum to meet any prior encumbrance, shall, in the absence of a contract to the contrary, be held by him in trust to be applied by him first, in payment of all costs, charges and expenses properly incurred by him as incident to the sale or any attempted sale; and, secondly, in discharge of the mortgage-money and costs and other money, if any, due under the mortgage; and the residue of the money so received shall be paid to the person entitled to the mortgaged property, or authorised to give receipts for the proceeds of the sale there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and at any rate even when the provisions of the KST Act only indicated recourse to the property which was subject to a charge in favour of the State Government for any tax arrears due by the owner, attachment of the bank account of the petitioner which has nothing to do with the properties owned by an erstwhile assessee in default has absolutely no legal basis and is to be quashed, etc. Statement of objections has been filed on behalf of respondents Nos. 3 and 4-State Government. It is brought on record that the present action is not an isolated action; that it has a history behind it; that in a proceeding for recovery of the amount from the erstwhile assessee by resorting to section 13(3) of the KST Act for realizing amount as fine imposed by criminal court and in such proceedings the assessee in default had made an application for impleading the purchaser of the auctioned property, in S.T. Mis. 10 of 2000 on the file of the court of Munsiff JMFC, Challakere; that the application though was allowed as per order dated May 23, 2008 (copy at annexure R1 to the statement of objections), the learned Magistrate nevertheless having observed that the newly added respondent-the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s customer. Sri Sunil Dutt Yadav, learned counsel for respondents Nos. 5 to 7 with reference to the proceedings in Criminal Revision Petition Nos. 742, 744, 745 and 746 of 2008 referred to by the learned Government Pleader, submits that in the light of the order it is no more open to the petitioner to contend that the liability for realization of the tax dues of the erstwhile owners of the property sold in public auction cannot now be disputed in the present writ petition by the petitioner; that the petitioner in fact had filed writ petitions for a like relief in W.P. Nos. 826 of 2009, 1675 to 1677 of 2009; that this court dismissed the writ petitions in the light of the above developments as pointed out by the learned Government Pleader and also learned counsel for respondents Nos. 5 to 7 and in the light of the order dated January 22, 2009 passed by this court in W.P. Nos. 826 of 2009, 1675 to 1677 of 2009 the writ petitions filed by the very petitioner and the writ petitions having been dismissed, the present writ petitions should not be entertained and should be dismissed. A perusal of the earlier proceedings while can indicate that the petitioner had not objected to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said the provisions of section 13 of the KST Act are attracted. Even then, the entitlement of the Department for realization of such amount which was an arrears of tax due by the erstwhile owners is only to the extent of enforcing the charge on the property and nothing beyond. It is for this reason, while there is nothing to interfere with annexure A notice at this stage which is only a proposal to attach the property and to take further action against the property, the notice being one not mentioning specific property but generally of all the properties of the petitioner both movables and immovables, notice cannot be allowed to operate to such a large extent and in a general manner, but has to be construed as one relating to the property purchased by the petitioner at the auction sale conducted by the Karnataka State Financial Corporation and nothing beyond. It is made clear that annexure A can operate only in respect of the property purchased by the petitioner, a property which had a charge on the date of auction sale, for payment of sales tax dues which were dues to the State by the erstwhile owners, respondents Nos. 5, 6 and 7 and for nothing else. Notice is permitted to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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