IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 15TH DECEMBER 2009 / 24TH AGRAHAYANA 1931 WA.No. 1661 of 2009() --------------------- AGAINST THE JUDGEMENT IN WPC.3021/2008 Dated 15/06/2009 .................... APPELLANT(S): APPELLANTS/RESPONDENTS ------------------------------------ 1. THE STATE OF KERALA, REP. BY THE PRINCIPAL SECRETARY TO GOVERNMENT, REVENUE DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. 2. THE DEPUTY TAHSILDAR(RR), MUKUNDAPURAM TALUK, THRISSUR DISTRICT. BY GOVERNMENT PLEADER SRI MOHAMED RAFFIQ. RESPONDENT(S): PETITIONERS -------------------------- 1. REGIONAL PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT FUND ORGANIZATION, SUB REGIONAL OFFICE, BHAVISHYANIDHI BHAVAN, KALOOR, KOCHI-17. (DELETED) 2. ASST. PROVIDENT FUND COMMISSIONER & RECOVERY OFFICER, EMPLOYEES PROVIDENT FUND ORGANIZATION, SUB REGIONAL OFFICE, BHAVISHYANIDHI BHAVAN, KALOOR, KOCHI-17.(DELETED) 3. MICROWAVE PRODUCTS(INDIA)LIMITED, REP. BY ITS DIRECTOR, K.V.GOPINATHAN NAIR, THACHERIL HOUSE, NADUVATH NAGAR, CHERTHALA, ALLEPPEY. 4. P.D.JOSE, PARAMBATH HOUSE, POOVATHUSSERY P.O., PARAKKADAVU, ERNAKULAM. 5. A.O.THOMAS, ACHAN DI HOUSE, ANNALLOOR P.O., CHALAKUDY. 6. THE RECOVERY OFFICER, DRT, ERNAKULAM. 7. CENTURION BANK OF PUNJAB LTD., WA 1661/09 REP. BY T.P.GEORGE, AREA HEAD(RECOVERY), CENTURION BANK OF PUNJAB LTD., INDIAN EXPRESS BUILDING, KALOOR, KOCHI-17. (R1 & R2 DELETED FROM PARTY ARRAY AS PER ORDER DATED 5.8.09) BY ADV. SRI.P.B.SURESH KUMAR FOR R7 THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 15/12/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & V.K.MOHANAN, JJ -------------------------------------------------- W.A.NO. 1661 OF 2009 -------------------------------------------------- Dated this the 15th day of December, 2009 J U D G M E N T Ramachandran Nair,J: The question raised in the writ appeal filed by the State is with regard to its first charge over the defaulter's property for recovery of arrears of sales tax. The Supreme Court has decided the issue in favour of the State vide judgment reported in Central Bank of India v. State of Kerala and others (2009)4 SCC 94. Counsel appearing for respondents 4 and 5 submitted that the defaulter company is in arrears of wages and other benefits to the employees covered by the Labour Court award. Since the property is now stated to be sold under interim order of this Court in this writ appeal, we feel the matter could be left for a decision by the recovery officer (the sixth respondent herein) to appropriate the sale proceeds in accordance with the priorities. However, considering the fact that the arrears of tax pertain to the W.A.NO.1661 OF 2009 :-2-: year 1989-90 onwards and since the interest charged is at the rate of 24% per annum which is almost equal to the tax arrears, we feel, 50% of the interest could be waived to protect the interest of the employees. We, therefore, direct the Recovery Officer to release payment of arrears of tax both under the K.G.S.T. and C.S.T. together with surcharge and 50% interest claimed, total of which will be Rs.26,44,449.50 first and then to consider priority claim of the employees for payment of wages and other benefits due to them. The payment should be thereafter made first to discharge the employees' liability and the Provident Fund arrears, if any more, are due and balance should be remitted to the creditor Bank. However, we make it clear that even if employees are not entitled to priority for their claims, the amount of interest on tax, waived by us, i.e., Rs.11,44,437.50 should be first utilised to meet the employee's liability and balance, if any, should be W.A.NO.1661 OF 2009 :-3-: credited to the Bank account, along with remaining amount. Subject to the above directions, the writ appeal is disposed of directing the Recovery Officer to consider the claim petition of all the parties and release payments based on the decision of the Supreme Court and statutory provisions. C.N.RAMACHANDRAN NAIR, Judge. V.K.MOHANAN, Judge. MBS/ W.A.NO.1661 OF 2009 :-4-: