Abdul Salim vs. The State Tax Officer

JUDGMENT

The petitioner who was an assessee under the Kerala Value Added Tax ('the KVAT Act' for short) was in arrears of tax for the assessment years 2009- 2010 and 2010-2011. For realization of the said tax arrears, the 3rd respondent initiated proceedings under the Revenue Recovery Act, and pursuant to an auction that was conducted, a prospective purchaser was identified, who paid an amount of Rs.5,73,750/-, being 15% of the bid amount for the property that was put in auction. It would appear that the said purchaser did not pay the balance consideration and accordingly, the 15% bid amount which he had paid was forfeited to the Government. 2.In the meanwhile, the petitioner, who was the original defaulter of revenue to the Government, opted for the benefit of the amnesty scheme that came into vogue through Finance Act, 2020. While computing the arrears for which the amnesty application was preferred, the petitioner reduced an amount of Rs. 5,72,750/-, being the amount forfeited by the Government under the earlier attempt for auctioning the property. It is the petitioner's contention that this forfeited amount must go to reduce the liability of the petitioner, for the realization of which the Government had resorted to the auction procedure under Revenue Recovery Act. In as much as the respondents refused to accept the said contention and consequently the application preferred by the petitioner for the benefit of the amnesty scheme, the petitioner has approached this Court through the present writ petition. 2.Through a statement filed on behalf of the 2nd respondent, the stand taken is that the amount forfeited in favour of the Government, consequent to the identified bidder at the auction not having made payment of the balance

WP(C).No.21533 OF 2020(N) 3 consideration, would enure to the benefit of the Government and it cannot go to reduce the liability of the petitioner to the Government. A reference is made to the provision of Section 49(3) of the Kerala Revenue Recovery Act which deals with the forfeiture of amounts to the Government. 4.I have heard the learned counsel appearing for the petitioner and also the learned Government Pleader appearing for the respondents. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I find that in the peculiar facts arising in this case, the auction steps initiated by the respondents have to be seen as for the purposes of realization of tax dues from the petitioner. It would follow, therefore, that any amount realized by the Government through the auction procedure that was resorted to for the purposes of realization of the dues from the petitioner, must go to reduce the liability of the petitioner to the Government. Although, it is a fact that the auction sale did not materialize, the forfeited amount must be seen as a portion of the sale consideration that the auction purchaser had paid, but which stood forfeited to the Government on account of the default committed by him in making the payment of the balance consideration. The said amounts forfeited to the Government should go to reduce the liability of the petitioner to the State Government. I note in this case that the petitioner had taken into account the said forfeited amount, while declaring the amounts already paid by him, in his application (Ext.P5) for the purposes of availing the benefit of the amnesty scheme. In the light of the discussions above, I am of the view that the Ext.P5 amnesty application preferred by the petitioner should be considered as a valid one for the purposes of the amnesty scheme, and the respondent should

WP(C).No.21533 OF 2020(N) 4 now act on the same and compute the balance amount payable by the petitioner in accordance with the amnesty scheme. I therefore, allow the writ petition, by directing the additional 4th respondent to pass orders on Ext.P5 application by granting credit of the forfeited amount to the petitioner while processing his application for amnesty. The additional 4th respondent shall process the application in the light of the directions issued above and intimate the petitioner of the amounts to be paid for the benefit of the amnesty scheme within a period of two weeks from the date of receipt of a copy of this judgment. A.K.JAYASANKARAN NAMBIAR JUDGE SJ

WP(C).No.21533 OF 2020(N) 5 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF NOTICE IN FORM 1 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P2 COPY OF NOTICE IN FORM 10 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P3 COPY OF RECEIPT ISSUED BY THE 3RD RESPONDENT. EXHIBIT P4 COPY OF AMNESTY APPLICATION FILED BY THE PETITIONER. EXHIBIT P5 COPY OF ANOTHER AMNESTY APPLICATION FILED BY THE PETITIONER. EXHIBIT P6 COPY OF LETTER SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P7 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P8 COPY OF LETTER SUBMITTED BY THE PETITIONER BEFORE THE 3RD RESPONDENT. EXHIBIT P9 COPY OF LETTER SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P10 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P11 COPY OF LETTER SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.