K.S. RASHEED v. SALES TAX OFFICER-II
Case at a glance
- Decided
- 21 May 2009
- Bench
- S SIRI JAGAN
Outcome
Dismissed
Accordingly, following that judgment, this writpetition is dismissed
Provisions considered
Key paragraphs
- Para 44. In Hamsa's case (supra), in paragraph 9, this Court held thus:'9.To attract S.26A, it is not necessary that the assessment should be completed. It is also not necessary that a demand should bemade to the assessee to pay any amount. If the transfer is…
Judgment
S.SIRI JAGAN, J.==================W.P(C).No.2274 of 2007==================Dated this the 21st day of May, 2009J U D G M E N TThe petitioner purchased certain properties from the 4threspondent on 19.2.1997 as per sale deed registered as No.829/97(sub registry office is not mentioned in the writ petition).Subsequently, by Ext.P4 notice, the said properties were put to sale by the revenue recovery authorities for realisation of sales tax arrears due from the 4th respondent. The petitioner is challenging Ext.P4 notice in this writ petition. The petitioner submits that the first notice issued to the 4th respondent in respect of the sales tax arrears is Exts.P3dated 7.8.1998, which is subsequent to the date of sale. Therefore, according to the petitioner, the property purchased by the petitioner from the 4th respondent cannot be put to sale for recovery of the arrears of sales tax due from the 4th respondent in so far as the arrears became due subsequent to the transfer of title in the property to the petitioner and therefore, S.26A of the Kerala General Sales TaxAct is not attracted.
The learned Government Pleader strongly opposes the writ petition. According to him, in view of Section 26A, the petitioner cannot contend that the property purchased by the petitioner from adefaulter is not liable to be proceeded against. According to the w.p.c.2274/07 2Government Pleader, it is not necessary that for attracting Section26A, a demand for tax should have been made prior to the sale. Pendency of some proceedings in respect of the sales tax arrears would be sufficient to attract Section 26A of the Kerala General SalesTax Act, 1963. He also relies on the Division Bench decision in Hamsav. Asst. Commissioner [2008 (3) KLT 180] in support of his contentions.
I have heard both sides in detail.
In Hamsa's case (supra), in paragraph 9, this Court held thus:'9.To attract S.26A, it is not necessary that the assessment should be completed. It is also not necessary that a demand should bemade to the assessee to pay any amount. If the transfer is made by theassessee during the pendency of any proceedings , such transfer shall bevoid as against any claim in respect of any tax or any other sum payable by the assessee under the K.G.S.T. Act. Inspection of the shop, factory or business premises of the assessee by the sales tax officers would also come within the meaning of the expression “during the pendency of any proceedings” under S.26A. The transfer as such is not void. It would be avalid transfer as between the transferor and the transferee. But it would be void against any claim in respect of any tax or any other sum payable by the assessee-transferor under the Act. The transferee is not entitled to put forward any defence that the transfer was made for valid consideration or that he is a bonafide purchaser for value.
Such defences are outside the purview of S.26A of the Act. Once the ingredients ofS.26A are attracted, the transfer made by the assessee would be void. The transferee cannot claim any valid title in such cases as against” any claim in respect of any tax or any other sum payable by the assessee” under the K.G.S.T. Act. In the present case, the transfers were effected after proceedings were initiated against the assessee under the Act. Therefore, the assignment deeds executed by the partners of theassessee firm in favour of the petitioners are void under S.26A. ExhibitP2 order is valid and the learned Single Judge has rightly rejected the contentions raised by the petitioners.'In this case, as is clear from Ext.P3 notice itself, for the year 1994-95, w.p.c.2274/07 3the 4th respondent had filed annual return under the KGST Act, the proceedings in respect of which were pending prior to the date of sale.
Operative part
It is settled law that for a particular year return should be filed before the 10th of May of the succeeding year. That being so, clearly the 4threspondent had filed returns prior to the purchase of the property by the petitioner and therefore, the proceedings for assessment were pending. In fact the Government Pleader would submit that assessment proceedings were pending for the years 1994-95 to 96-97.That being so, the ratio of the decision of the Division Bench in Hamsa's case (supra) is clearly attracted to the facts of the present case. Therefore, I do not find anything wrong with the impugned recovery proceedings. Accordingly, following that judgment, this writ petition is dismissed. Sd/- sdk+ S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge
Questions this judgment answers
What did the Court decide in this case?
The Court recorded the following disposition: Accordingly, following that judgment, this writpetition is dismissed
Which statutory provisions did this judgment involve?
Kerala General SalesTax Act, 1963 — s. 26A.
Which court decided this case, and when?
Kerala High Court, on 21 May 2009. The bench was S SIRI JAGAN.
Precedent status how later indexed judgments have treated this case
No known negative treatment found in the Courts & Cases corpus.
This is a result about the indexed corpus, not a finding that the judgment remains good law. Coverage may be incomplete.