IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 19TH OCTOBER 2011 / 27TH ASWINA 1933 WP(C).No. 34565 of 2004(M) -------------------------- PETITIONER : --------------- K.C.JOY, KUZHITHALAVANAT VEEDU, PERUMPAYIKADU, KOTTAYAM. BY ADV. MR. K.G.ANIL BABU RESPONDENTS: --------------- 1. THE EXCISE COMMISSIONER, COMMISSIONERATE OF EXCISE, THIRUVANANTHAPURAM. 2. THE ASSISTANT EXCISE COMMISSIONEER, PALAKKAD. *3. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, DEPARTMENT OF TAXES * (suo motu impleaded as additional respondent No.3 vide judgment) BY GOVERNMENT PLEADER MR. SABU JOSEPH THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19/10/2011, THE COURT ON 19/10/2011 DELIVERED THE FOLLOWING: W.P.(c) 34565 OF 2004 APPENDIX PETITIONER'S EXHIBITS : EXT. P1 : THE TRUE COPY OF THE NOTICE ISSUED BY THE 2ND RESPONDENT DATED 18.05.2004 EXT. P2 : THE TRUE COPY OF THE OBJECTION DATED 05.10.2004 SUBMITTED TO THE 2ND RESPONDENT. EXT. P3 : THE TRUE COPY OF THE JUDGMENT IN O.P. NO. 5876/2003 DATED 01.07.2004 BEFORE THE HIGH COURT OF KERALA, ERNAKULAM. /TRUE COPY/ P.A. TO JUDGE P.R. RAMACHANDRA MENON J. ~~~~~~~~~~~~~~~~~~~~~~~ W.P (C) No. 34565 of 2004 ~~~~~~~~~~~~~~~~~~~~~~~ Dated, this the 19th October, 2011 JUDGMENT The issue involved in this case is whether the petitioner is liable to satisfy interest in respect of the amount admittedly remitted, but subsequently segregated; first towards interest and then to principal, is sustainable or not. 2. The petitioner was a licencee of toddy shops bearing Nos. 18, 19 and 23 to 28 of the Kuravilangad Excise Range during 1996 - '97, who has satisfied the entire 'kist' amount and was doing the business accordingly. By virtue of the enabling provisions of law, the petitioner used to transport toddy from Palakkad district, based on valid permit, paying the requisite tax, including tree tax as well.. Subsequently, by virtue of SRO No. 322 of 1996 dated 29.03.1996, levy of additional tax of Re. 1 per litre was imposed. Though challenge was raised against the said levy from some other corners, the same did not turn to be fruitful and finally the petitioner also satisfied the entire amount in respect of said year 1996 - '97, pursuant to the revenue recovery proceedings taken in 1999. W.P. (C) No. 34565 of 2004 : 2 : 2. While so, in the year 2004 the petitioner was served with Ext. P1, stating that, after appropriating the amount deposited, a sum of Rs, 1,32,200/ towards 'principal' and Rs. 1,81,818/- towards 'interest' were still to be satisfied (totaling to a sum Rs. 3,15,018/-) as on 30.04.2004. The petitioner was also directed to satisfy interest in respect of the balance principal amount @ 18 % p.a., which demand was disputed by the petitioner by filing Ext. P2, pointing out that the demand was per se wrong and illegal in all respects. 3. Heard the learned counsel for the petitioner and the learned Government Pleader at length. 4. Despite the fact that the matter is pending for more than 7 years, no counter affidavit has been filed from the part of the respondents. The learned counsel for the petitioner submits that there is no rhyme or reason for demanding 'interest' after 'fictional segregation' of the amount paid by the petitioner way back in the year 1999, that too after a long silence of more than five years. It is also stated that the petitioner was never informed of any such liability; otherwise he would have cleared the same then and there or would have availed the benefit under the 'Amnesty Scheme'; subsisting during the relevant time. It is also brought to the notice of this Court that, W.P. (C) No. 34565 of 2004 : 3 : exactly similar issue was considered by this Court earlier and as per Ext. P3 judgment dated 01.07.04 in O.P. 5876 of 2003, the said contention was upheld and the Government was directed to have the matter considered in tune with the observations therein. 5. The challenge raised in the said original petition, disputing the liability to satisfy interest under Rule 6 (29) of the Abkari Shops (Disposal in Auction) Rules, was in fact answered in favour of the revenue. But, with regard to the question whether the petitioner was actually liable to satisfy the amount, it was observed by the Court that the petitioner was not liable for the delay involved and hence the amount ought to have been realized from the concerned officers. The observations made by this Court in paragraph 2 and 3 of the judgment read as follows : 2. I heard the learned Government Pleader appearing for the respondent's also. The contention of the petitioner, that no interest can be levied under Rule 6 (29) of the aforementioned rules for the amount payable as tax for the transport of toddy cannot be accepted since Rule 6 (29) does not specify that only the amounts payable under Abkari Shops (Disposal in Auction) Rules alone can be collected with interest. Such an interpretation will be irrational and amounts due to the Government under the Act and Rules are liable to be collected with interest as provided therein. But, I find considerable force in the submission of the petitioner that he is not liable to pay any W.P. (C) No. 34565 of 2004 : 4 : interest to the amount due to the Government between the date of Exhibit P2 and the date of issuance of Ext. P4. If the demand was made in time, the petitioner would have cleared the amount. Therefore, I am of the view that the petitioner is not liable to pay any interest between 03.12.1998 and the date of service of Ext. P4. The amount lost by the government, as a result of this declaration can be recovered, if the Government thing fit, from the officers responsible for the delay in raising the demand on the petitioner. 3. The contention of the petitioner raised in ground F that he could not avail the benefit of Rule 6 (25A) of Abkari Shops (Disposal in Auction) Rules and could not pay the amount before 30.11.2001 with tax officials, have also be upheld. I feel that the Government should look into the grievance of the petitioner in this regard, hear him and take a decision, how the benefits under that rule which was introduced in 2000 can be now extended to the petitioner. This, the Government shall do, after affording an opportunity of being heard to the petitioner, within three months from the date of receipt of a copy of this judgment.” 6. Considering the facts and circumstances, this Court finds that the petitioner herein is also entitled get the similar benefit, being a similarly situated person, as the petitioner in O.P. 5876 of 2003. In the said circumstances, the State of Kerala, represented by the Secretary to Government, Department of Taxes is 'suo motu' impleaded as the additional 3rd respondent in party array. W.P. (C) No. 34565 of 2004 : 5 : The Writ Petition is disposed of, directing the additional 3rd respondent to consider the matter with reference to the observations made by this Court in Ext. P3, if the petitioner chooses to put forth a claim in this regard within 'three weeks' from the date of receipt of a copy of this judgment. Appropriate orders shall be passed in accordance with law, as expeditiously as possible, at any rate within three months thereafter. The coercive proceedings stated as initiated against the petitioner shall be kept in abeyance till such time. Sd/- P. R. RAMACHANDRA MENON, JUDGE kmd