IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 17TH SEPTEMBER 2010 / 26TH BHADRA 1932 WP(C).No. 18626 of 2005(P) -------------------------- PETITIONER(S): ---------------------- 1. SHAJAHAN, ZENITH, 2ND FLOOR, TC 14/1376-2, BAKERYJUNCTION, PALAYAM, THIRUVANANTHAPURAM 695 033. 2. MEHARUNNISA KASSIM, AMK MANZIL, PALLICKAL P.O., VIA.KILIMANOOR, THIRUVANANTHAPURAM. 3. NAZEE BASHIRUDDIN, KACHERI THECKATHIL, HARIPPAD, KERALA. 4. SUSEENA SHUCKOOR, 319, GANDHI NAGAR, VAZHUTHAKKADU, THIRUVANANTHAPURAM. BY ADVS. SRI.ARIKKAT VIJAYAN MENON SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT(S): ------------------------ 1. DEPUTY TAHSILDAR, (REVENUE RECOVERY) TALUK OFFICE, CHIRAYINKEEZHU. 2. VILLAGE OFFICER, PALLICKAL VILLAGE, CHIRAYINKEEZHU. 3. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (ASSESSMENT), SPECIAL CIRCLE, KOLLAM. *ADDITIONAL R4 & R5 IMPLEADED 4. MOHAMMED ABDUL KHADER, AGED 75 YEARS, S/O. ABDUL RAHIMAN KUNJU, THEKKEVILA VEEDU, MANTHARA, EDAVA P.O., THIRUVANANTHAPURAM DISTRICT. ...2/- WP(C).No. 18626 of 2005(P) -2- 5 M. SHAJI, AGED 31 YEARS, S/O. MOHAMMED ABDUL KHADER, KIZHAKKEVILA, VENKULAM, EDAVA P.O., THIRUVANANTHAPURAM. *IMPLEADED AS ADDITIONAL R4 & R5 AS PER THE ORDER DATED 11/3/10 IN I.A.NO. 3307/10. R1 TO R3 BY GOVERNMENT PLEADER SRI. K.P. PRADEEP R4 & R5 BY ADV. SRI.P.SIVARAJ THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ...3/- WP(C).No. 18626 of 2005(P) -3- APPENDIX PETITIONER'S EXHIBITS: EXT.P1 : COPY OF THE DEMAND NOTICE IN FORM NO.1 ISSUED BY THE FIRST RESPONDENT FOR 84-85. EXT.P2 : COPY OF THE DEMAND NOTICE IN FORM NO.10 ISSUED BY THE FIRST RESPONDENT FOR 84-85. EXT.P3 : COPY OF THE DEMAND NOTICE IN FORM NO.1 ISSUED BY THE FIRST RESPONDENT FOR 85-86. EXT.P4 : COPY OF THE DEMAND NOTICE IN FORM NO.10 ISSUED BY THE FIRST RESPONDENT FOR 85-86. EXT.P5 : COPY OF THE DEMAND NOTICE IN FORM NO.1 ISSUED BY THE FIRST RESPONDENT FOR 86-87. EXT.P6 : COPY OF THE DEMAND NOTICE IN FORM NO.10 ISSUED BY THE FIRST RESPONDENT FOR 86-87. EXT.P7 : COPY OF THE DEMAND NOTICE IN FORM NO.1 ISSUED BY THE FIRST RESPONDENT FOR 87-88. EXT.P8 : COPY OF THE DEMAND NOTICE IN FORM NO.10 ISSUED BY THE FIRST RESPONDENT FOR 87-88. EXT.P9 : COPY OF THE DEMAND NOTICE IN FORM NO.1 ISSUED BY THE FIRST RESPONDENT FOR 87-88. EXT.P10 : COPY OF THE DEMAND NOTICE IN FORM NO.10 ISSUED BY THE FIRST RESPONDENT FOR 87-88. EXT.P11 : COPY OF THE REPRESENTATION SUBMITTED BEFORE THE 3RD RESPONDENT. RESPONDENT'S EXHIBITS: EXT.R4(a) : COPY OF INTERIM ORDER DATED 22.6.05 IN W.P.(C) 18626/05 OF THIS HON'BLE COURT. ...4/- WP(C).No. 18626 of 2005(P) -4- EXT.R4(b) : COPY OF ENCUMBRANCE CERTIFICATE ISSUED FROM S.R.O. NAVAIKULAM. EXT.R4(c) : COPY OF TAX RECEIPT DATED 29.11.79 ISSUED TO FATHER OF THE PETITIONER NO. 1 HEREIN. //TRUE COPY// P.S. TO JUDGE Mn P.R. RAMACHANDRA MENON, J. = = = = = = = = == = = = == = = = = = = W.P.(C) No. 18626 OF 2005 = = = = = = = = == = = = = = = = = = = = = DATED THIS, THE 17TH DAY OF SEPTEMBER, 2010. J U D G M E N T Petitioners, who are some of the legal heirs of the deceased Haneefa, who was a partner of a firm, are before this Court, challenging Exts.P1 to P10 notices issued under the Revenue Recovery Act, demanding some amounts stated as liable to be cleared by the firm and its partners to the State in respect of arrears of sales tax. 2. The challenge raised in the writ petition is mainly three fold. The first one is that no notice was ever issued with regard to the assessment to the petitioners prior to issuance of Exts.P1 to P10, that too, issued after a span of nearly two decades from the date of death of their father occurred on 20.11.1988. Secondly, the proceedings are barred by limitation on two different heads, more particularly, with regard to assessment years 1984-85 and 1985-86 and thirdly, on the ground that the petitioners have not inherited any assets from the deceased partner of the firm, ie. their father and as such, no proceedings will lie against them by virtue of the mandate under Section 20 of the Kerala General Sales Tax Act. 3. When the matter came up for consideration before this Court on 22.6.2005, the following interim order was passed: WP(C) 18626/2005 2 "If the arrears sought to be recovered from the defaulter and his property is time barred, then the amount should be recovered from the officers responsible for delay in initiating recovery proceedings. Therefore, detailed affidavit will be filed by the 3rd respondent explaining as to why delay has occurred in recovering the arrears and the persons responsible for delay in initiating or continuing recovery proceedings. There will be stay as prayed for, for three weeks." A counter affidavit has been filed by the third respondent on 15th November, 2005, contending in Para 3 that there is no delay in proceeding to recover the arrears from the defaulter and seeking to sustain the impugned notices referring to the facts and figures with regard to the relevant assessment years. 4. The learned counsel for the petitioners submits that there is no case for the respondents that the petitioners were served with any 'prior notice' before issuance of Exts.P1 to P10 Revenue Recovery notices, by the departmental authorities. Reference is also made to the final assessment originally completed in respect of different assessment years. With respect to 1984-85, the final assessment was completed on 3.11.1987 serving a demand notice on 26.11.1987. It is stated in the counter affidavit that, based on the appellate order dated 7.9.1988 of the Deputy Commissioner (Appeals), Kollam, the final assessment was modified on 25.10.1999. WP(C) 18626/2005 3 Similarly, in respect of the assessment year 1985-86, final assessment was completed on 29.1.1988 and based on the similar order passed by the Appellate Authority on 7.9.1988, final assessment was modified as per order dated 25.10.1999, thus showing that these modified orders were passed after ten years from the date of passing the order by the Appellate Authority. 5. Section 17(8) of the Kerala General Sales Tax Act reads as follows: "Any assessment or reassessment in pursuance of an order of appellate or revisional authority shall, be completed within a period of four years from the expiry of the year in which the order was received. Provided that all such assessments or reassessments pending as on the 1st day of April, 1993 shall be completed on or before the 30th day of September, 1998." The time stipulated for completion of the proceedings pursuant to the appellate/ revisional order is within 'four' years from the date of receipt of a copy of the order from the appellate authority/revisional authority. The date of the order of the Appellate Authority, as mentioned above, is 7.9.1988. When it is admitted that the assessment is modified only on WP(C) 18626/2005 4 25.10.1999, it is not stated in the counter affidavit as to when the order passed by the Appellate Authority was 'served' upon the concerned authority as to examine whether that came within the purview of the statutory period. Learned Government Pleader, making a reference to the 'proviso' to Section 17(8) prays to adopt a harmonious interpretation with reference to the contents of Section 17 A as well. Learned counsel for the petitioners submits that this issue has already been considered by this Court while rendering the judgment reported in Mohammed Kunju v. Asst. Commissioner of Commercial Taxes (2008 (4) KLT 157) and that the same has become final, as no appeal has been filed therefrom. The learned Government Pleader submits that, almost a similar instance has already been subjected to challenge from the part of the Government. Though they lost the same, the matter has been taken up by way of SLP before the Apex Court and that the same is pending. 6. It has been stated in Para 3 of the counter affidavit filed by the third respondent that, on 18.11.1988, the partnership was reconstituted by including Smt. Mohammed Pathummal (wife of T.M. Hanreefa and mother of Sri. M. Shana Babu) as a new partner. It is further stated in Para 5 that the assessment orders and demand notices for the assessment years 1984- 85, 85-86 and 86-87 were accepted by T.M. Haneefa as Managing Partner, WP(C) 18626/2005 5 simultaneously adding in Para 7 that the petitioners being the legal heirs of the deceased, are also liable to satisfy the liability of the deceased Managing Partner along with their mother and brother who were carrying on the business of the firm. 7. Nowhere in the said counter affidavit, has it been stated that the petitioners were conducting the business or that the petitioners had inherited the assets of the deceased Haneefa. On going through the averments in Para 6 of the writ petition, wherein the petitioners contend that the liability, if any, of a legal heir of a deceased assessee under the KGST Act is only to the extent of the assets of the deceased devolved upon him and the respondents have not carried out any such quantification, this Court finds that the matter requires to be considered by the third respondent along with the other contentions raised by the petitioners particularly as to the non service of 'prior notice' before issuance of Exts.P1 to P10 to the petitioners and also as to the question of 'limitation' with specific reference to the dictum in Mohammed Kunju's case (2008(4) KLT 157) which has been rendered after making a reference to the decision of the Full Bench of this Court in Geo Sea Foods v. Additional Sales Tax Officer 2006 (1) KLT 72 (FB). WP(C) 18626/2005 6 8. For the foregoing reasons, Exts.P1 to P10, in so far as they relate to the petitioners herein, will stand set aside and the third respondent is directed to finalise the proceeding by passing a speaking order, after giving an opportunity of hearing to the petitioners and also quantifying the liability, if any, of course answering the questions as aforesaid, before proceeding with further steps for recovery. This shall be done as expeditiously as possible, at any rate, within a period of 'three months' from the date of receipt of a copy of this judgment. Petitioners shall produce a copy of this verdict before the third respondent for taking further steps, forthwith. The writ petition is disposed of as above. P.R. RAMACHANDRA MENON, (JUDGE) KNC/-