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TMI Blog2017 (4) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petitions challenging the said notices and the lien marked over its bank account. 3. Relevant facts leading to issuance of notices are, the first respondent passed an ex parte reassessment order dated April 25, 2013 under the provisions of the KVAT Act for the assessment year 2005-06. The same was initially challenged before the Joint Commissioner of Commercial Taxes who allowed it in part. On further appeal, the Karnataka Appellate Tribunal ("KAT", for short) in STA Nos. 3307-3318 of 2013 allowed them in full and remanded the matter for fresh consideration. 4. First respondent passed two other ex parte reassessment orders; an order dated April 7, 2014, under the KVAT Act for the year 2006-07 which was challenged in W. P. No. 107587 of 2014 before this court and another dated April 5, 2014 under the KTEG Act for the year 2006-07 challenged in W. P. No. 104387 of 2016. 5. While the matters stood thus, the petitioner received the impugned communication dated August 16, 2016 from its banker. 6. Assailing the legality and correctness of the notices issued under section 45 of the KVAT Act and section 9 of the KTEG Act, Sri N. G. Rasalkar, learned counsel for the petitioner, mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent-State is vested with power under section 45 of the KVAT Act to demand and recover any tax, penalty or interest from "any person" holding money or property on behalf of an assessee. Thus, every person holding money on behalf of an assessee shall become liable to pay arrears of tax under the KVAT Act; (d) The judgment of this court in the case of M. L. Narasimha Gupta's case [1989] 75 STC 154 (Karn); [1989] 2 Kar. L.J. 353 is not applicable to this case because, firstly, in the facts and circumstances of that case this court had directed the appellate authority to consider the interim application. Secondly, the petitioner has challenged the "vires" of the amendment to the Act and reassessment orders in a writ petition and the same is not a statutory appeal; (e) The petitioner has not exhausted the alternative and efficacious remedy of statutory appeal under section 62 of the KVAT Act. 9. Incontrovertible facts of this case fall within a narrow compass. The first principal contention urged on behalf of the petitioner is with regard to territorial jurisdiction. First respondent is the designated recovery officer. Hence there is no dispute with regard to his authority to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 14. Relevant portion of section 9 of the KTEG Act reads as follows: "9. Recovery of tax from certain other persons.-(1) The assessing authority may, at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the 1 [x x x] 1 dealer from Re: Point No. 1 whom any tax assessed is due, at his last address known to the assessing authority) require any person from whom money is due to the 1 [x x x] 1 dealer or any person who holds or may subsequently hold money for or on account of the 1 [x x x] 1 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 1 [x x x] 1 dealer in [1979: KAR. ACT 27 Tax on Entry of Goods 755 in respect of arrears of tax or penalty or the whole of the money when it is equal to or less than that amount." 15. A careful reading of the above provisions clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the event of the allegations noted in para 81 in SCC (para 74 in 191 Comp Cas) of this judgment levelled against the respondents by the appellant being established, it will have a far-reaching consequence on the Indian investors on securities as well as the stock market and consequently the duty of the SEBI to protect their interests would automatically come into play as stipulated under sections 11B, 11C, 12 and 12A of the SEBI Act, 1992. Therefore, the said judgment when applied carefully we find that the same supports the case of the appellant rather than the respondents." (emphasis1 supplied) 17. Both KVAT Act and KTEG Act authorize recovery of tax by making a demand from "any person". So long as an assessment or reassessment order is in force, it should be lawful for a tax recovery authority to recover the assessed tax liability due to the State. Admittedly, in the instant case, pursuant to reassessment orders there exists tax liability due and payable by the assessee-petitioner herein. Therefore, a combined reading of the relevant provisions of Acts and the judgment of honourable Supreme Court in Securities and Exchange Board of India v. Pan Asia Advisors Ltd. [2015] 191 Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epublic of India as follows." 20. Keeping in pace with the development all over the globe, India has adapted itself to the technology in vogue. In furtherance, Parliament has enacted the Information Technology Act, 2000. Banks in the country are "net enabled" and offer net banking and other products. To effect proper transfer of funds through NEFT, RTGS, etc., Parliament has enacted "The Payment and Settlement Act, 2007". Corresponding amendments have been made in the cognate Acts such as Indian Evidence Act, Bankers' Books Evidence Act in consonance with the Information Technology Act, 2000. Courts cannot remain oblivious to the progress and development in the country, commercial practices in vogue and their corresponding sequel on the citizens' rights as also the interest of State. The honourable Supreme Court in the case of Sil Import v. Exim Aides Silk Exporters, Bangalore reported in [1999] 97 Comp Cas 575 (SC); [1999] 4 SCC 567 has held that the Parliament would be aware of modern devices and equipments. It has precisely stated thus (pages 579 and 580 in 97 Comp Cas): "15. Facsimile (or fax) is a way of sending handwritten or printed or typed material as well as pic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Demat (dematerialized) form. Seizure and sale of shares in "Demat" form can be effected only in cyberspace by using internet. In contrast to real world, cyberspace is made of virtual elements accessible through internet at any time and from any place without barrier of borders. Therefore, it is logical to infer and hold that once the Act has authorized attachment and sale of shares in a company, Legislature had taken into account transaction by electronic mode. Second respondent, Bank of Baroda is State owned. This court can take judicial note of its significant presence in the State of Karnataka. It offers contemporary banking facilities such as NEFT, RTGS, ATM, etc. These services are available with computerized branches. Admittedly, the petitioner's bank account number consists of 14-digits (0950400000015) which indicates that it is "net enabled". Thus, it can be safely concluded that money in petitioner's bank account is available for transaction in every branch and ATM centre across the country and beyond the territory of India. Further, Bank of Baroda is a "State" under article 12 of the Constitution of India. It offers National Electronic Fund Transfer (NEFT) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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