IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON TUESDAY, THE 5TH JANUARY 2010 / 15TH POUSHA 1931 WP(C).No. 33494 of 2009(F) -------------------------- PETITIONER --------------- TONY ABRAHAM, AGED 41 YEARS, S/O.P.J.ABRAHAM, PUTHENPURAYIL HOUSE, KAINADY MURI, KAVALAM, ALAPPUZHA. REPRESENTED BY HIS POWER OF ATTORNEY HOLDER V.J.ANTONY, AGED 69 YEARS,VENATTIL HOUSE,DOOR NO. 46/993 D, VADUTHALA, KOCHI. BY ADV. SRI.K.S.HARIHARAPUTHRAN SRI.GEORGE MATHEW RESPONDENTS: --------------- 1. STATE OF KERALA REPRESENTED BY THE SECRETARY TAXES, THIRUVANANTHAPURAM. 2. THE DISTRICT COLLECTOR, ALAPPUZHA. 3. THE THAHASILDAR, KUTTANADU 4. THE VILLAGE OFFICER, KAINAKARI NORTH VILLAGE, ALAPPUZHA. BY GOVERNMENT PLEADER ADV. MR. C.K. GOVINDAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05/01/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R. RAMACHANDRA MENON, J. .............................................................................. W.P.(C) No.33494 OF 2009 ......................................................................... Dated this the 5th January, 2010 J U D G M E N T The petitioner is challenging Ext. P2 notice issued by the respondent Nos. 2 and 4 for sale of his personal property which was purchased as per Ext. P4 sale deed, for realisation of the arrears of sales tax due from M/s. Kainady Tanneries Pvt. Ltd., a Company incorporated under the Indian Companies Act, of which the petitioner was one of the Directors. 2. The case put forth by the petitioner, as highlighted by the learned Counsel for the petitioner, is that there is absolutely no justification on the part of the respondents for having issued Ext. P2 notice for realisation of the amounts, stated as due from the Company, by proceeding against the personal property of the petitioner, particularly when there is no case for the respondents that the said property was procured utilising the assets of the Company either directly or indirectly. The learned Counsel further submits that the respondents were also not W.P.(C) No.33494 OF 2009 2 justified in placing reliance on Sec.26C of the KGST Act, which clearly contemplates that any such step shall be taken only after arriving at a finding that the tax cannot be recovered from the Company for any reason whatsoever. 3. The above contention is sought to be answered from the part of the respondents by the learned Government, placing reliance on the contention raised by the petitioner himself in paragraph No. 4 of the Writ Petition, which is extracted below: “It is further submitted that the said company was running in heavy loss and the Kerala Financial Corporation, from where loan was availed, took possession of the assets of the company & sold the same in public auction for the realization of its money. As such, there is absolutely no assets at present for the company.” (emphasis is supplied) 4. In view of the admitted factual position, as above, stating that the Company does not have any assets at all, there W.P.(C) No.33494 OF 2009 3 is absolutely no requirement to pursue any further 'fact finding exercise', so as to ascertain the chance for invoking the said provision, submits the learned Government Pleader. It is also brought to the notice of this Court that there is a clear cut provision as provided under Section 22(4) whereby necessary steps can be taken for collection of the arrears from the Director of a Company, when the dealer fails to pay the tax collected by him under Sub section(1) of the Act to the Government, by taking such steps against any person or persons responsible for such collection on behalf of the dealer including the Director, Manager, Secretary or other officers of the Company, who shall be jointly and severally liable to effect payment as above, as if it were a tax due from him. 5. In the above facts and circumstances, the challenge raised from the part of the petitioner against the steps taken by the respondents for realisation of the due amount issuing Ext. P2 is not assailable under any circumstances, the same being within the four walls of the law. The Writ Petition fails in this regard and no interference is warranted. W.P.(C) No.33494 OF 2009 4 6. However, taking note of the persuasive submission made from the part of the petitioner through the learned counsel seeking for some breathing time to satisfy the liability, this Court finds it fit and proper to permit the petitioner to satisfy the amount due under Ext. P2 by way of 'six' equal monthly installments, the first of which shall be effected on or before 25.02.2010 to be followed by similar installments to be effected on or before the 25th of the succeeding months. Subject to the above, all coercive steps pursuant to Ext. P2 shall be kept in abeyance. It is made clear that if any default is committed by the petitioner in satisfying the liability as above, the respondents will be at liberty to proceed with further steps for realisation of the entire amount in a lump sum, by pursing such steps from the stage where it stands now. The Writ Petition is disposed of. P.R. RAMACHANDRA MENON, JUDGE. lk