IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN TUESDAY, THE 3RD MARCH 2009 / 12TH PHALGUNA 1930 WA.No. 1771 of 2005() --------------------- AGAINST THE JUDGEMENTIN W.P.(C)NO.16299/2005 Dated 14/06/2005 .................... APPELLANT(S): PETITIONER. ---------------- KUNNATH MAMMAED HAJI, S/O.MOOSA HAJI, KUNNATH MANZIL, THIRURKKAD, MALAPPURAM DISTRICT. BY ADV. SRI.N.N.SUGUNAPALAN, SENIOR ADVOCATE SRI.S.SUJIN RESPONDENT(S): RESPONDENTS. ------------------- 1. THE TAHSILDAR, PERINTHALAMANNA. 2. THE DISTRICT COLLECTOR, MALAPPURAM. 3. K.HASSINAR, KAPPOOR HOUSE, BOMBAY AUTO GARAGE, ANGADIPPURAM P.O. PERINTHALMANNA TALUK, MALAPPURAM DISTRICT. 4. THE STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER SRI.K.P.PRADEEP FOR R1,R2,R4 THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 03/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R.RAMAN & P.S.GOPINATHAN, JJ. ------------------------------- W.A.No.1771 of 2005 ------------------------------- Dated this the 3rd March, 2009 J U D G M E N T Raman, J. The appellant is the petitioner in W.P.(C) No.16299 of 2005. The revenue recovery action, when initiated against the property belonging to the appellant, he has approached this Court by filing the writ petition, as W.P.(C) No.37392/2003. The revenue recovery action initiated against him was for realisation of sales tax arrears due from the third respondent herein. He sold the property in question to the petitioner by Ext.P1 document on 20.7.1992, contending that the petitioner is the bona fide purchaser, he resisted the action of the authorities in proceeding against the property. Since his objections were not considered, this Court by Ext.P4 judgment rendered in W.P.(C) No.37392 of 2003, directed the authorities to consider his objection before proceeding further. After considering the W.A.No.1771 of 2005 2 objection, Ext.P5 order was passed. Seeking to quash Ext.P5, this writ appeal is filed. 2. When the matter came up for consideration before the learned Single Judge, by the impugned judgment in this appeal, it was held that the matter was covered by the decision of this Court in Jaya v. State of Kerala (2005 (2) KLT 543). 3. The appellant contends that the prime question to be decided in this case is as to whether Section 26(A) of the Kerala General Sales Tax Act is attracted or not. Section 26(A) of the Kerala General Sales Tax Act is attracted and the transfer will be void only if such transfer is made during the pendency of any proceeding under the Act or after the completion thereof, and the assessee creates charge of any of his asset in favour of any person. Such charge would be void as against any claim in respect of any tax due or payable under the Act. W.A.No.1771 of 2005 3 4. It is contended that no proceedings, what so ever, were pending under the Act or completed prior to the transfer of the property in his favour by Ext.P1, and as such, Section 26(A) of the KGST Act has no application. 5. As per Ext.P5 order, the finding is that since the arrears relate to 1987-88 to 1993-94 and sale having taken place only in 1992, the sale must be deemed to have been made subsequent to the proceedings for recovery of sales tax. We are not at all satisfied with the reasoning made in Ext.P5. Merely going by the year, one cannot say whether as on the date of transfer in 1992, as per Ext.P1, there was any proceedings pending or completed. If there was any proceedings pending, as to when the proceedings commenced and how the matter came to the knowledge of the authorities concerned, is to be specified. If any assessment was already completed, necessarily, the date on which the assessment order was passed can also be referred. It cannot be inferred that merely because the year relating to which the arrears had fallen due is prior to the year of transfer of W.A.No.1771 of 2005 4 property in question, automatically, it should be deemed as though some proceedings is pending or completed. 6. Whether the proceedings are pending or completed is a question of fact. Therefore, it is for the authority to state specifically as to what were the proceedings pending as on the date on which the sale took place and in what manner such proceedings could be said to be pending. This being a crucial question and being a question of fact, in the absence of such finding in the first instance by the authorities, the question of applying Section 26(A) of the KGST Act does not arise. The necessary foundation for applying Section 26(A) has to be specified, and that should be discernible from the order itself. 7. Hence, we set aside the judgment of the learned Single Judge in W.P.(C) No.16299 of 2005 and remand the matter to the Tahsildar for fresh orders, in accordance with law, after hearing the parties. It is open to the Tahsildar to call for the records relating to the sales tax assessment of the year in W.A.No.1771 of 2005 5 question from the concerned Sales Tax Officer and also examine him, if found necessary, and enter a finding of fact as to what are the proceedings pending as on the date of transfer and pass orders afresh. The Tahsildar shall pass appropriate orders, as expeditiously as possible, at any rate, within a period of three months from the date of receipt of a copy of this judgment. The attachment, if any, of the property shall continue till then. Both the writ petition, W.P.(C) No.16299 of 2005, and the writ appeal are allowed as above. P.R.RAMAN, JUDGE P.S.GOPINATHAN, JUDGE. nj.