IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 13TH JANUARY 2010 / 23TH POUSHA 1931 WP(C).No. 28823 of 2009(W) --------------------------------------- PETITIONER(S): ----------------------- K.G. CHEMPAKAKUTTY AMMA, ANIKKATTU HOUSE, POOVARANI P.O., PALA, KOTTAYAM DIST. BY ADV. MR.V.P.SUKUMAR, MR.KURYAN THOMAS. RESPONDENT(S): ------------------------ 1. THE COMMERCIAL TAX OFFICER, COMMERCIAL TAX OFFICE, PALA, KOTTAYAM DIST. 2. THE TAHSILDAR (RR), MEENACHIL, PALA. R1 & R2 BY GOVERNMENT PLEADER MR.C.K. GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 21/12/2009, THE COURT ON 13/01/2010 DELIVERED THE FOLLOWING: WP(C) NO. 28823/2009-W APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE MODIFIED ASSESSMENT ORDER DATED 28/06/2008 FOR 200-01. EXT.P2: COPY OF THE MODIFIED ASSESSMENT ORDER DATED 28/06/2008 FOR 2001-02. EXT.P3: COPY OF THE LETTER DATED 28/08/2008 ISSUED TO THE PETITIONER BY THE 1ST RESPONDENT. EXT.P4: COPY OF THE CHALAN NO.313 DATED 19/09/2008. EXT.P5: COPY OF THE SURETY BOND DATED 08/08/1994 EXECUTED BY THE PETITIONER AND HER HUSBAND. EXT.P6: COPY OF THE RR NOTICE DATED 21/01/2009 ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT. RESPONDENT'S EXHIBITS: NIL //TRUE COPY// P.S. TO JUDGE rs. C.K.ABDUL REHIM, J. ------------------------------ W.P.(C).No.28823 OF 2009 ------------------------------ Dated this the 13th day of January, 2010 J U D G M E N T ---------------------- 1. Assessment of the petitioner for the years 2000-01 and 2001-02 under the Kerala General Sales Tax Act was finalized by the 1st respondent as per Ext.P1 and P2 orders dt.28.6.2008. The amounts due under Ext.P1 and P2 were in arrears and the petitioner applied for benefit of the amnesty scheme as provided under Section 23B of the KGST Act, which was introduced through Act 21 of 2008. Through Ext.P3 order the petitioner was permitted to avail benefit under the amnesty scheme, and an amount of Rs.2,69,938/- was directed to be paid in 4 equal installments, first of which shall be paid within 15 days of receipt of intimation, and the balance in 3 equal monthly installments starting from the month of September 2008 onwards. Petitioner remitted the first installment as evidenced from Ext.P4. It is stated that due to financial difficulties she could not continue payment of the balance 3 installments within the time stipulated. 2. Meanwhile the petitioner along with her husband stood as sureties for taking registration with respect to business W.P.(C).28823/09-W 2 started by her son, Shri:N.S.Sunil Kumar, dealing with supply of firewood to tea factories. As evidenced from Ext.P5, the surety bond was executed by the petitioner and her husband, jointly undertaking liability to the extent of Rs.2 lakhs. Consequent to default committed by the son in payment of tax amounts due, revenue recovery steps were initiated against the petitioner and her husband. Ext.P6 is the copy of notice issued under Section 36 of the Kerala Revenue Recovery Act effecting attachment of immovable property of the petitioner for default of her son to the extent of Rs.1,73,000/-. 3. According to the petitioner eventhough she expressed willingness to pay the liability due with respect to registration in the name of her son to the extent of Rs.1,73,000/-, as demanded in Ext.P6, the 1st respondent has not accepted the same for the reason that her son is in arrears of more amount and therefore the petitioner should effect payment of the full arrears. It is contended by the petitioner that the extent of her liability with respect to registration granted to her son is limited to Rs.2 lakhs. Since an amount of Rs.27,000/- was already recovered, liability of the petitioner is confined only to the extent of Rs.1,73,000/-. Hence demand for payment of the entire amount due from her son is legally unsustainable, is the contention. W.P.(C).28823/09-W 3 4. Further grievance of the petitioner is that eventhough the petitioner had expressed her willingness to make payment of the balance 3 installments outstanding under the amnesty scheme, before expiry of the period provided under Section 23B, the 1st respondent had not accepted such payments, alleging default in payment of amounts under the amnesty scheme within the time stipulated. Under the above circumstances the petitioner is seeking directions for accepting the balance payment under Ext.P3 order and also for a direction to the 1st respondent to receive the amount demanded under Ext.P6 revenue recovery notice in full and final settlement of liability of the petitioner under Ext.P5 surety bond. 5. In the counter affidavit filed on behalf of the 1st respondent it is stated that the petitioner had failed to make payment of the balance 3 installments due under Ext.P3. It is stated that on default in payment of those installments the petitioner was issued with an intimation dt.3.1.2009, pointing out that on failure to pay the balance amount, the benefit of amnesty facility will be treated as lapsed, without any further intimation. It is contended that inspite of acceptance of such a letter the petitioner had failed to fulfill the condition under Ext.P3. W.P.(C).28823/09-W 4 6. With respect to the liability under the surety bond contention of the respondent is that her claim for limiting the liability to the extent of bond is not sustainable in view of the judgment reported in 2009 (17) KTR 317. 7. Going by provisions of Section 23B it is noticed that on failure of payment of amounts stipulated under the amnesty scheme, the assessing authority is bound to issue notice to the assessee. Further it is noticed that on failure to comply with demand raised through such notice, the assessing authority has to revoke the benefit granted under the amnesty scheme. In the case at hand it is evident that the petitioner had remitted 25% of the amount settled under the amnesty scheme. Of course there was default in payment of the balance 3 installments. But the specific case of the petitioner is that the 1st respondent has refused to accept the payment of the balance 3 installments, pursuant to initiation of recovery proceedings against the petitioner on the basis of the surety bond. It is contended by the petitioner that she had offered payment of the balance installments before the expiry of the period of the amnesty scheme. Eventhough there is mention in the counter affidavit about a notice issued, the 1st respondent has not produced copy of any such notice nor any evidence to prove that it was served W.P.(C).28823/09-W 5 on the petitioner. Further it is noticed that the amnesty benefit granted to the petitioner was never revoked on issuing any order as contemplated under Section 23B. Under such circumstances having taken note of the fact regarding payment of 25%, I am of the opinion that the petitioner can be permitted to make payment of the balance in 3 installments along with interest due thereon from the respective due dates of payment. It is contended by the respondents that the benefit granted under the amnesty scheme is purely on a contractual basis and if the dealer wants to avail the benefit, she should comply with the conditions as per the statute. Any failure in strict compliance of the benefit granted under the scheme will disentitle the petitioner from availing such benefit, is the contention. 8. However, as stated above, since there is no specific revocation of the amnesty benefit, the contention of the petitioner could not be negatived in full and she should not be denied of the benefit under the amnesty scheme which was already granted under Ext.P3. Therefore the respondents are directed to accept payment of the balance 3 installments due under Ext.P3 order, if such payment is made along with interest due under the statute from the respective due dates of payment. The petitioner is granted 6 weeks time from today for effecting W.P.(C).28823/09-W 6 such payment. 9. With respect to liability under Ext.P5 surety bond, it could not be said that the petitioner has got any liability beyond the extent of the limit prescribed therein. Therefore it is evident that the liability under Ext.P5 surety bond with respect to the arrears due from the petitioner’s son is limited to the extent of Rs.2 lakhs. As evidenced from Ext.P6 the demand raised against the petitioner is only to the extent of an amount of Rs.1,73,000/-, after crediting payments already received. Therefore it is declared that the liability of the petitioner with respect to Ext.P5 surety bond will be limited to the extent of the demand raised in Ext.P6 notice. The writ petition is disposed of with the above observations. C.K.ABDUL REHIM, JUDGE. okb