MUNEERU RAHAMAN v. STATE OF KERALA
Case at a glance
Outcome
Dismissed
present writ petitions stands dismissed
Provisions considered
Key paragraphs
- Para 66. It is not in dispute that the Company M/s.Thayyil Photographics Private Limited / M/s.Adams Photography & Technology Trading Private Limited is a private company and the petitioner is one of its Directors/promoters. Section 39 of the Act creates joint and several liability for payment…
Judgment
MS.RESHMITA RAMACHANDRAN-GP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 14.02.2024, ALONG WITH WP(C).20723/2022, 20728/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) Nos.20716, 20723 & 20728/22. 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH WEDNESDAY, THE 14TH DAY OF FEBRUARY 2024 / 25TH MAGHA, 1945 PETITIONER/S: WP(C) NO. 20723 OF 2022 MUNEERU RAHAMAN, AGED 41 YEARS, SON OF MR. THAYIL MUHAMMED HAJI, NO.6, PUZHAYORAM VILLAS, ANAKKAYAM (PO), MANJERI, MALAPPURAM DISTRICT, PIN-676509. BY ADVS. SHAJI CHIRAYATH JIJI M. VARKEY M.K.SAFEELA BEEVI SAVITHA GANAPATHIYATAN M.M.SHAJAHAN RESPONDENT/S: 1 2 3 STATE OF KERALA, REPRESENTED BY THE PRINCIPAL SECRETARY, DEPARTMENT OF TAXES, SECRETARIAT, THIRUVANANTHAPURAM ,PIN - 695001. COMMERCIAL TAX OFFICER, CIRCLE NO. IV, OFFICE THE STATE GOODS & SERVICES TAX DEPARTMENT, OLD RAILWAY STATION ROAD, KARGIL LANE, KACHERIPADY, ERNAKULAM PIN - 682018.
DEPAUTY TAHSIDAR (REVENUE RECOVERY), TALUK OFFICE ROAD, VAYAPPARAPADI, VELLARANGAL, MANJERI (PO), MALAPURAM DISTRICT PIN- 676517. BY MS.RESHMITA RAMACHANDRAN-GP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 14.02.2024, ALONG WITH WP(C) NOS.20716/2022 AND 20728/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) Nos.20716, 20723 & 20728/22. 3 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH WEDNESDAY, THE 14TH DAY OF FEBRUARY 2024 / 25TH MAGHA, 1945 PETITIONER/S: WP(C) NO. 20728 OF 2022 MUNEERU RAHAMAN, AGED 41 YEARS SON OF MR. THAYIL MUHAMMED HAJI, NO.6, PUZHAYORAM VILLAS, ANAKKAYAM (PO), MANJERI, MALAPPURAM DISTRICT, PIN-676 509 BY ADVS. SHAJI CHIRAYATH M.K.SAFEELA BEEVI SAVITHA GANAPATHIYATAN M.M.SHAJAHAN RESPONDENT/S: 1 2 3 STATE OF KERALA, REPRESENTED BY THE PRINCIPAL SECRETARY, DEPARTMENT OF TAXES, SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695 001.
COMMERCIAL TAX OFFICER, CIRCLE NO. IV, OFFICE THE STATE GOODS & SERVICES TAX DEPARTMENT, OLD RAILWAY STATION ROAD, KARGIL LANE, KACHERIPADY, ERNAKULAM, PIN - 682018. DEPAUTY TAHSIDAR (REVENUE RECOVERY), TALUK OFFICE ROAD, VAYAPPARAPADI, VELLARANGAL, MANJERI (PO), MALAPURAM DISTRICT ,PIN- 676517 BY MS.RESHMITA RAMACHANDRAN-GP THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 14.02.2024, ALONG WITH WP(C) NOS.20716/2022 AND 20723/2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) Nos.20716, 20723 & 20728/22. 4 J U D G M E N T [WP(C) Nos.20716, 20723 & 20728 of 2022] All the three writ petitions have been filed by the very same petitioner impugning the revenue recovery proceedings initiated by the 2nd respondent for recovery of arrears of tax, along with interest, under the provisions of the Kerala Value Added Tax Act, 2003 ('Act', for short) in respect of M/s.Thayyil Photographics Private Limited / M/s.Adams Photography & Technology Trading Private Limited, which was a registered dealer under the provisions of the Act and an assessee on the rolls of the 2nd respondent.
The petitioner was one of the promoters and directors of the private Company, namely, M/s.Thayyil Photographics Private Limited / M/s.Adams Photography & Technology Trading Private Limited. Exts.P1 and P2 are the impugned demand notices issued against the petitioner under Sections 7 and 34, respectively, of the Kerala Revenue Recovery Act, 1968. WP(C) Nos.20716, 20723 & 20728/22. 5
Assessments of the Company for the months of April to July, 2013 under Section 24(1) of the Act were completed. Since the Company ceased to function, the assessment orders were sent to the directors in their residential address, which was found to be the same as declared in the KVATIS portal. However, the orders were returned unserved with an endorsement “unclaimed”. The petitioner/assessee had not remitted any amount of tax as per the assessment orders. Since the respondents were unable to recover the aforesaid tax and interest from the company/dealer, revenue recovery proceedings have been initiated against its Directors by virtue of Section 39 of the Act.
Learned counsel for the petitioner submits that notices under Sections 7 and 34 of the Kerala Revenue Recovery Act, 1968 have been issued by the 3rd respondent to the petitioner, though the petitioner is not at all personally liable for the arrears of the VAT and interest, which are to be recovered from the Company. For recovery of arrears of tax and other statutory WP(C) Nos.20716, 20723 & 20728/22. 6 dues, proceedings have to be imitated against the Company first, and if the arrears of tax and other statutory dues are not recovered from the Company, then only the Directors are held liable. He, therefore, submits that without proceeding against the Company at the first instance, issuance of notices under Sections 7 and 34 of the Kerala Revenue Recovery Act against the petitioner is wholly illegal and are liable to be set aside.
On the other hand, Ms.Reshmita Ramachandran, learned Government Pleader, submits that assessments were completed and the orders and demands were issued to the directors/promoters of the Company. But, those orders returned with an endorsement “unclaimed”. She submits that under Section 39 of the Act, Directors of a private company are jointly and severally liable for the dues of the Company. Therefore, revenue recovery proceedings are being initiated against the petitioner, by virtue of Section 39 of the Act.
Section 39 of the Act reads as under: WP(C) Nos.20716, 20723 & 20728/22. 7
39. Liability of Directors of a Private Company :- Where any tax or other amount recoverable under this Act from any private company, whether existing or wound up or under liquidation, cannot be recovered for any reason whatsoever, every person who was a director of such company at any time during the period for which the tax or other amount is due under this Act shall be jointly and severally liable for the payment of such tax or other amount unless he proves that the non-recovery cannot be attributed to any negligence, misfeasance or breach of duty on his part in relation to the affairs of the company.
Operative part
It is not in dispute that the Company M/s.Thayyil Photographics Private Limited / M/s.Adams Photography & Technology Trading Private Limited is a private company and the petitioner is one of its Directors/promoters. Section 39 of the Act creates joint and several liability for payment of tax and other amounts recoverable from a company on its Directors in respect of a private WP(C) Nos.20716, 20723 & 20728/22. 8 company, unless the Directors prove that the non- recovery cannot be attributed to any negligence, misfeasance or breach of duty on their part in relation to the affairs of the Company. No such a plea has been taken by the petitioner. As the petitioner along with other Directors are jointly and severally liable to discharge the tax liability under Section 39 of the Act, the statutory authorities are well within the powers to proceed against the petitioner for recovery of the dues of the Company against his personal assets. I find no error of law or jurisdiction in issuing the impugned notices. These writ petitions have no merit and substance and the same are hereby dismissed. Pending interlocutory application, if any, in the present writ petitions stands dismissed. Sd/- DINESH KUMAR SINGH JUDGE WP(C) Nos.20716, 20723 & 20728/22. 9 APPENDIX OF WP(C) 20723/2022 PETITIONER EXHIBITS Exhibit P1 Exhibit P2 COPY OF DEMAND NOTICE UNDER SECTION 7 OF REVENUE RECOVERY ACT ISSUED BY THE 3RD RESPONDENT COPY OF DEMAND NOTICE UNDER SECTION 34 OF REVENUE RECOVERY ACT ISSUED BY THE 3RD RESPONDENT WP(C) Nos.20716, 20723 & 20728/22. 10 APPENDIX OF WP(C) 20728/2022 PETITIONER EXHIBITS Exhibit P1 Exhibit P2 COPY OF DEMAND NOTICE UNDER SECTION 7 OF REVENUE RECOVERY ACT ISSUED BY THE 3RD RESPONDENT COPY OF DEMAND NOTICE UNDER SECTION 34 OF REVENUE RECOVERY ACT ISSUED BY THE 3RD RESPONDENT WP(C) Nos.20716, 20723 & 20728/22. 11 APPENDIX OF WP(C) 20716/2022 PETITIONER EXHIBITS Exhibit P1 Exhibit P2 COPY OF THE DEMAND NOTICE UNDER SECTION 7 OF REVENUE RECOVERY ACT ISSUED BY THE 3RD RESPONDENT. COPY OF THE DEMAND NOTICE UNDER SECTION 34 OF REVENUE RECOVERY ACT ISSUED BY THE 3RD RESPONDENT.
Questions this judgment answers
What did the Court decide in this case?
The Court recorded the following disposition: present writ petitions stands dismissed
Which statutory provisions did this judgment involve?
Kerala Value Added Tax Act, 2003; Kerala Revenue Recovery Act, 1968 — ss. 7, 34; Kerala Revenue Recovery Act — ss. 7, 34.
Which court decided this case, and when?
Kerala High Court, on 14 Feb 2024. The bench was DINESH KUMAR SINGH.
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.