R.Selvaraj vs. The State Tax Officer - Ii

Held

The Court held that there was no impediment to the registration of the discharge of liability to the bank. The Court directed the 3rd respondent (Sub-Registrar) to register the discharge of liability. However, the Court also observed that the attachment of the petitioner's property by the GST Department shall continue until the petitioner discharges the tax liability to the respondents or subject to the outcome of the remand proceedings from the earlier writ petitions. The Court found no reason to uphold the refusal slip and granted relief to the petitioner concerning the registration of the discharge receipt, while maintaining the status quo regarding the attached property pending resolution of tax dues.

Facts

The petitioner, R. Selvaraj, filed a writ petition challenging a Refusal Slip dated August 5, 2026, issued by the Sub-Registrar, Kattuputhur (3rd respondent). The petitioner sought to quash this refusal and direct the Sub-Registrar to register a discharge receipt dated March 27, 2026, issued by the State Bank of India. The petitioner had previously been in arrears of tax liability for seven assessment years (2017-18 to 2023-24), which were the subject of separate writ petitions. In those petitions, assessment orders were quashed and remitted back, subject to the petitioner depositing 25% of the disputed tax. The petitioner's property was attached by the GST Department (1st and 2nd respondents). The petitioner subsequently took a loan from the State Bank of India, mortgaging the property, and then discharged this liability. The Sub-Registrar refused to register the discharge receipt.

Key Issues

1. Whether the Refusal Slip dated 05.08.2026 issued by the 3rd respondent is liable to be quashed. 2. Whether the 3rd respondent should be directed to register the discharge receipt dated 27.03.2026. Petitioner's Arguments: The petitioner argued that the Refusal Slip was erroneous and that the discharge receipt should be registered. While the judgment notes the petitioner's contention of belated compliance with a previous court order regarding tax deposit, it also states there are no records to substantiate this compliance. Revenue/State's Arguments: The judgment does not explicitly record arguments from the revenue or state. However, the context implies their actions led to the attachment of the property and the refusal to register the discharge receipt, likely due to pending tax liabilities.