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Mrs. Mariamma Antony Vs. Tahsildar, Udumbanchola Taluk and ors. - Court Judgment

SooperKanoon Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberO.P. No. 3512 of 1973
Judge
Reported in[1976]102ITR327(Ker)
ActsKerala Taxation Law (Continuation and Validation of Recovery Proceedings) Act, 1967 - Sections 3; Revenue Recovery Act, 1968 - Sections 7 and 17
AppellantMrs. Mariamma Antony
RespondentTahsildar, Udumbanchola Taluk and ors.
Appellant Advocate N.K. Varkey, Adv.
Respondent Advocate Government Pleader for respondent Nos 1 and 2
Excerpt:
- - an intimation to the assessee and an intimation to the recovery officer are mandatory and the failure to intimate the petitioner is fatal tothe legality of the revenue recovery proceedings. a failure to give that intimation, according to me, vitiates the revenue recovery step for the changed amount......ot the order of stay. on august 20, 1973, the village officer, ayyappancoil, attached the standing crops (cardamom) in the petitioner's land and also attached 40 kgs. of cured cardamom kept in the store room of the petitioner. the standing crops and the cured cardamom were put to auction on september 24, 1973. as there were no bidders, the auction was postponed and, ultimately, the standing crops were sold in public auction on october 15, 1973, and the cured cardamom was sold in public auction on october 17, 1973. the right to collect usufructs (standing crops) from the petitioner's cardamom estate for the period ending march 31, 1974, was sold for rs. 6,410 and the cured cardamom was sold for rs. 1,800 and the 3rd respondent was the bidder in both the auctions. alleging that these.....
Judgment:

Viswanatha Tver, J.

1. The petitioner is an assessee to agricultural income-tax. For the years 1971-72 and 1972-73, an amountof Rs. 15,033-64 was due as arrears of agricultural income-tax. Therefore, the Agricultural Income-tax Officer, Kumali, sent a requisition under Section 69(2) of the Revenue Recovery Act of 1968 to the District Collector, Idikki, to realise the same. The District Collector authorised the Tahsildar, Udumbanchola, under Section 73 of the Act to exercise the powers under the said Act for the realisation of the arrears. The petitioner had filed an appeal against the orders of assessment and that was pending when the Agricultural Income-tax Officer made the requisition to the Collector. The Tahsildar, Udumbanchola, furnished the village officer, Ayyappancoil, a demand in writing to proceed with the revenue recovery steps. Coming to know of this the petitioner filed an original petition, O.P. No. 2057 of 1973, before this court and obtained an order of stay in C.M.P. No. 6557 of 1973, staying the revenue recovery proceedings on condition that she remits an amount of Rs. 10,000 in two monthly instalments. The first instalment of Rs. 5,000was paid on July 16, 1973, and the second instalment was due on August 17, 1973. Before the latter date the appeal filed by the petitioner against the orders of assessment was decided. The expenses allowed by the Agricultural Income-tax Officer was found to be insufficient. A larger amount was allowed and a recomputation of the taxable income and the tax payable was ordered to be done by the Income-tax Officer. Exhibit P-1 is the order in appeal for the above assessment years and for the assessment year 1970-71. Possibly, due to this decision in appeal, the second instalment of Rs. 5,000 due on August 17, 1973, payable as per the orders of this court referred to earlier was not paid. The consequence was that the stay petition stood dismissed as per the terms ot the order of stay. On August 20, 1973, the village officer, Ayyappancoil, attached the standing crops (cardamom) in the petitioner's land and also attached 40 kgs. of cured cardamom kept in the store room of the petitioner. The standing crops and the cured cardamom were put to auction on September 24, 1973. As there were no bidders, the auction was postponed and, ultimately, the standing crops were sold in public auction on October 15, 1973, and the cured cardamom was sold in public auction on October 17, 1973. The right to collect usufructs (standing crops) from the petitioner's cardamom estate for the period ending March 31, 1974, was sold for Rs. 6,410 and the cured cardamom was sold for Rs. 1,800 and the 3rd respondent was the bidder in both the auctions. Alleging that these revenue recovery steps have been taken behind the back of the petitioner and alleging that the mandatory provisions of the Revenue Recovery Act have not been followed in effecting the attachment and conducting the subsequent auction proceedings, this original petition has been filed for quashing those revenue recovery steps.

2. Three main points are raised before me. Firstly, it is contended that as there was a reduction of the tax by the appellate decision, intimation as required under Section 3(b)(ii) of the Kerala Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1967 (Act No. 23 of 1967), has not been given to the assessee. As per this provision when Government dues are reduced in appeal the taxing authority shall give intimation of the fact of such reduction to the assessee. This has not been, according to the petitioner, done. The Agricultural Income-tax Officer has not filed any counter-affidavit denying this contention. So I have to take it that such an intimation has not been given. It is no doubt seen from the counter-affidavit filed on behalf of the 1st respondent that the Income-tax Officer has intimated the 1st respondent of the change in the assessment. The petitioner contends that this is not enough as per the provision referred to above. An intimation to the assessee and an intimation to the recovery officer are mandatory and the failure to intimate the petitioner is fatal tothe legality of the revenue recovery proceedings. The normal procedure when a person is assessed to tax is to serve a notice of demand asking him to pay the tax. Whenever there is a change in the tax amount, a fresh demand is called for. But the legislature thought that this need not be done in the case of a change occasioned by an appeal if already a demand has been made as per the original assessment. That is why Section 3(b)(ii) was enacted in Act No. 23 of 1967. The person liable to pay the tax must know the amount payable by him-which, if he pays, can avert compulsory steps under the Revenue Recovery Act, When there is a change in the tax liability, the amount payable by him should be definite and known to him and, therefore, a strict compliance of the provisions of Section 3(b)(ii) is mandatory. A failure to give that intimation, according to me, vitiates the revenue recovery step for the changed amount. Therefore, the first contention urged by the petitioner's counsel has to be sustained.

3. The second contention seems to be equally tenable on the language of Section 7 of the Revenue Recovery Act, 1968. Under this section the authorised officer (in this case the 1st respondent) has to furnish the village officer a demand in writing to be shown to the defaulter. If the defaulter fails to pay the amount demanded immediately the demand in writing is shown to him, the village officer is entitled to proceed with the attachment of the movable property of that defaulter. The authority to attach the movable property is obtained by the village officer only if the defaulter on being shown the demand in writing fails to pay the arrears. If the demand in writing is not shown to the defaulter, the village officer, on the language of Section 7, has no authority to proceed with the attachment. In this case it is admitted by the 1st respondent that the demand in writing was shown only to the superintendent of the estate belonging to the petitioner. The definition of 'defaulter' in the Act does not take in any person who is managing the property of the defaulter. Therefore, it is not enough to show the demand in writing to the superintendent. It should have been shown to the defaulter. Admittedly, that has not been done. Therefore, the village officer has no authority to make attachment in the instant case. Section 8(3) of the Act does not apply to a case of attachment and sale of growing crops or ungathered products. What has been attached in this case is partly growing crops and partly cured cardamom. If the dafaulter is absent when the person employed to attach goes to the place pf attachment, there is no machinery for any substituted service or showing of the demand in writing. This seems to be a lacuna in the Act. So long as there is no provision for dispensing with showing the demand in writing to the defaulter, the terms of Section 7 will have to be complied with in the matter of making attachment of growing crops. In this case there is nocompliance with Section 7 and, therefore, so far as attachment of the growing crops is concerned, it is defective and cannot be sustained.

4. Lastly, it is contended that the provisions of Section 17 have been violated by the 1st respondent in selling by public auction the right to take the usufructs from the estate for a period up to March 31, 1974. Under Section 17 if the growing crops are fit for reaping or gathering they can be sold. If they are not so fit, they can only be reaped or gathered in due season and stored in proper places and then sold. In the first case alone a sale is permitted. In this case the attachment report in the file shows that the cardamom is fit for reaping or gathering. If that was so, that alone should have been sold. But what has been done is that the right to take the usufructs up to March 31, 1974, is auctioned. This cannot be justified by the terms of Section 17. Therefore, in the matter of the sale of the growing crops the provisions of Section 17 have not been complied with and the sale by public auction of the growing crops cannot be sustained. For all these reasons I hold that the steps taken by the respondent for realising the amount of tax are violative of the provisions of Section 3(b)(ii) of Act No. 23 of 1967 and Sections 7 and 17 of Act No. 15 of 1968, namely, the Revenue Recovery Act.

5. In the result, I allow this original petition and quash the revenue recovery steps taken against the petitioner including the attachment of the growing crops in the cardamom estate belonging to the petitioner and also the attachment of the cured cardamom stocked by the petitioner. As the cured cardamon crops have already been sold for a sum of Rs. 1,800, it is not possible to restore the said cured cardamom crops to the petitioner. The petitioner will be entitled to get a sum of Rs. 1,800 being the sum realised by public auction of the said crops. The 3rd respondent is hereby restrained from taking the yield from the cardamom estate attached on August 20, 1973. The attachment of growing crop effected on that date is vacated. The original petition is disposed of as above. The parties shall bear their costs.


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