IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR FRIDAY, THE 11TH JANUARY 2008 / 21ST POUSHA 1929 OP.No. 9655 of 2003(Y) ---------------------- PETITIONER: ------------ THE SUNDARAM FINANCE LTD., REPRESENTED BY ITS BRANCH MANAGER, P.SUDHAKARAN, ROOM NO.18, FIRST FLOOR, ASR PLAZA, PRIYADARSHINI ROAD, PALAKKAD. BY ADV. SRI.VPK.PANICKER SRI.GEORGE VARGHESE(PERUMPALLIKUTTIYIL) SRI.SAJAN PHILIP MATHEW SMT.SREELEKHA PUTHALATH RESPONDENTS: ------------- 1. THE STATE OF KERALA REPRESENTED BY THE SECRETARY, DEPARTMENT OF TAXATION GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. THE SALES TAX OFFICER, SALES TAX OFFICE, CHITTOOR, PALAKKAD 3. SALAVUDHEEN S.I., S.S.RICE MILL, PUDUNAGARAM, PALAKKAD. R1 AND R2 BY G.P. SRI. K.P. PRADEEP THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 11/01/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 ORDER ON CMP 16755 OF 2003 IN OP 9655 OF 2003 DISMISSED 11.1.2008 SD/-C.N.RAMACHANDRAN NAIR, JUDGE. APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE COPY OF THE AGREEMENT DATED 23.4.2002 BEARING NO. UK 0007 ENTERED INTO BETWEEN THE PETITIONER AND THE THIRD RESPONDENT. EXT.P2 TRUE COPY OF THE INVOICE OF PSN AUTOMOBILES PRIVATE LTD. IN RESPECT OF THE SAID VEHICLE EVIDENCING THE SALE TO THE THIRD RESPONDENT AND HYPOTHECATION IN FAVOUR OF THE PETITIONER. EXT.P3 TRUE COPY OF THE RELEVANT PAGES OF THE CERTIFICATE OF REGISTRATION OF SMOTOR VEHICLES IN RESPECT OF KL 09K 7045 EXT.P4 TRUE COPY OF THE ADVOCATENOTICE DATED 29.11.2002 ISSUED ON BEHALF OF THE PETITIONER COMPANY BY SRI. R. UMASANKAR, ADVOCATE. EXT.P5 TRUE RELEVANT EXTRACT OF THE AUCTION NOTICE DATED 6.3.2003 SHOWING THE DATE OF AUCTION AS 24.3.2003, TOOK DOWN THE OFFICERS OF THE PETITIONER COMPANY FROM THE OFFICE OF THE 2ND RESPONDENT. EXT.P6 TRUE COPY OF THE REPRESENTATION DATED 19.3.2003 SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT. RESPONDENTS' EXHIBITS:NIL TRUE COPY P.S. TO JUDGE. C.N. RAMACHANDRAN NAIR, J. -------------------------------------------- O.P. NO. 9655 OF 2003 -------------------------------------------- Dated this the 11th day of January, 2008 JUDGMENT Vehicle while being used for transport of goods was detained for evasion of tax. Penalty under Section 29A(4) and Section 45B of the KGST Act are levied on the owner/transporter of the vehicle. Petitioner is the financier who has first charge over the vehicle. Counsel for the petitioner contended that petitioner is entitled to repossess the vehicle because of the default committed by the owner. Even though Govt. Pleader submitted that recovery can be made by attachment and sale of the vehicle as defaulter is subject to penalty, there is no specific provision in the statute authorising first charge on the vehicle. In any case I do not think this Court should decide the matter at this distance of time because seizure was in 2003 and it is not known whether the owner of the vehicle has cleared the penalty. O.P. is accordingly disposed of leaving freedom to the petitioner to proceed for recovery against the borrower. If the vehicle is still in the custody of the department, there will be direction to the concerned officer to 2 hear the registered owner and the petitioner and if penalty is payable, to release the vehicle on payment of penalty. If the registered owner against whom penalty is levied does not clear the liability then the Officer will consider whether there is prior charge on the vehicle, and if so, petitioner should be given an option to remit the penalty and get the vehicle released. If Government has no priority over the petitioner's first charge, vehicle should be sold in public auction and sale proceeds should be appropriated first towards the amount due to the petitioner and then balance can be appropriated by the Government towards liability for penalty. Entire proceedings will be completed within a period of two months from the date of production of a copy of this judgment by the petitioner. (C.N. RAMACHANDRAN NAIR) Judge kk 3