Joseph Michael and Bros. Ltd. Vs. Agricultural Income-tax Officer and anr. - Court Judgment

P. Shanmugam, J.

1. The petitioner is a transferee of agricultural property having purchased agricultural lands on November 30, 1977, from Randathara Estate and Anjarakandy Essential Oil Company. The agricultural income-tax assessment for the year 1975-76 in respect of the vendors was completed on March 9, 1981, fixing a total tax due at Rs. 16,027.24 (Rs. 4,006.91 on each partner).

2. For the assessment year 1976-77, the assessment was made on March 25, 1982, fixing a tax effect of Rs. 70,448.18 and it was revised under Section 36 of the Kerala Agricultural Income-tax Act to Rs. 97,536.80. After recovering the tax due from the present owners the following amounts are pending to be realised from the petitioners :

Assessment year and date

of orderRR No.Amount pendingRs.75-76/9-3-817/81-82 to 10/81-82/23-12-814,368.647C-77/25-3-826/82-83/25-11-8246,963.18Total51,331.82

3. Section 23 of the Agricultural Income-tax Act, 1950, deals with the assessment in case of transfer of right in land. The proviso to the said section enables the Department to recover the tax from the transferee if the tax cannot be recovered from the transferor. By exhibit P-9 order the first respondent has found that the transferor cannot be found and hence it could not be recovered from him and, therefore, the transferee is liable for the tax liability during that period 1976-77. The finding is not seriously disputed before me since the officer has given in detail the steps taken for finding that transferor and as a matter of fact found that the petitioner has misguided the Department in giving wrong addresses of the vendors. Once this conclusion, viz., that the transferor could not be found and then the liability is fastened on the transferee is accepted, then the only question is whether it is open to the petitioner to seek for a notice of demand and to raise the plea of limitation, etc. The petitioners are directed to pay the tax arrears towards the discharge of liability in accordance with Section 23 of the Act. That means that whatever the liability that was in existence against the transferor will be recoverable from the transferee. It is not open to the petitioner to raise the plea of maintainability or legality of the assessment made on the transferor. As a matter of fact exhibit P-4 order of the Commissioner of Agricultural Income-tax held that the petitioner's revision challenging the assessment orders for the periods 1975-76 and 1976-77 were found to be not maintainable and incompetent. Those orders have become final and notices have been issued within the statutory period. Therefore, I do not find any illegality in the revenue recovery notices. Hence, the original petition fails and it is accordingly dismissed.