IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH THURSDAY, THE 7TH OCTOBER 2010 / 15TH ASWINA 1932 OP(C).No. 62 of 2010(O) ----------------------- EA NO.1220/2009 IN EP.223/2008IN LAR 79/2003 OF SUB COURT, NORTH PARAVUR PETITIONER (S): -------------------- VIJAYASANKAR S/O.GOPALAKRISHNAN NAIR,'RANJINI'KARAMANA, MELATHUR MURI, CHEMBAZHASSERI VILLAGE, THIRUVANANTHAPURAM. BY ADV. SRI.C.CHANDRASEKHARAN RESPONDENT(S): --------------- 1. STATE OF KERALA, REPRESENTED BY THE DISTRICT COLLECTOR, ERNAKULAM. 2. THE SUB JUDGE, NORTH PARUR. BY GOVT. PLEADER SHRI B.JAYASURYA BY ADV. SHRI JOSE JOSEPH, COUNSEL FOR GOVT. OF INDIA (TAXES) THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 07/10/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: OP(C) NO.62/2010 APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE COPY OF MEMO DATED 27.1.2010 IN EA 1220/2009 IN EP 223/2008 IN LAR 79/2003 BY ADVOCATE P.S.HILAL BEFORE THE SUB COURT, N. PARUR EXT.P2 TRUE COPY OF APPLICATION DATED 12.3.2010 SUBMITTED BY PETITIONER IN EP 223/2008 IN LAR 79/2003 OF SUB COURT, NORTH PARUR EXT.P3 TRUE COPY OF PROCEEDINGS IN EP 223/2008 IN LAR 79/2003 OF SUB COURT, NORTH PARUR //TRUE COPY// THOMAS P. JOSEPH, J. -------------------------------------- O.P.(C) No.62 of 2010 -------------------------------------- Dated this the 7th day of October, 2010. JUDGMENT This petition is in challenge of Ext.P3, order on E.A.No.1220 of 2009 in E.P.No.223 of 2008 in L.A.R.No.79 of 2003 of the court of learned Sub Judge, North Paravur. Petitioner filed execution petition for a sum of Rs.25,91,453/- and since the amount was not deposited by the respondent, petitioner attached the sales tax amount to be remitted by M/s.Kochi Refineries Ltd. to the State Government at the rate of Rupees four lakhs per month. The attached amount was deposited by the garnishee in court. Following that, petitioner preferred Ext.P2, application for cheque. That application was returned as per order dated 15.09.2010, according to the learned counsel for the reason that the income tax payable from the said amount was not paid or deducted by petitioner. That order is under challenge. Learned counsel contends that it is not the function of the Land Acquisition Reference Court to adjudicate liability to pay income tax. 2. I have heard learned counsel for petitioner and learned standing counsel for Income Tax Department. 3. In Nalini v. Deputy Collector (2006(4) KLT 87) this Court has stated with reference to Sections 194 LA and 197 of the Income Tax Act, 1961 (for short, “the Act”) that deduction of income tax from compensation is not the function of the Land Acquisition court. In the case on hand, learned Sub Judge has not ventured to make any deduction of tax if any payable by petitioner or OP(C) No.62/2010 2 adjudicated liability of petitioner. It is only that the cheque application was returned. But going by Section 194 LA of the Act, tax in respect of compensation or enhanced compensation except where it related to agricultural land is to be deducted at source which means that it is the function of the Income Tax Authorities to do that. Section 197 of the Act deals with certification of deduction of income tax at lower rate which takes in Section 194 LA as well. Hence it is for the appropriate authority under the Act to decide whether petitioner is liable to pay tax on the amount of compensation deposited in the court and whether any deduction is allowable. Petitioner has to get a certificate from the appropriate authority under Section 197 of the Act before the amount in deposit is withdrawn. 4. Having regard to the position of law stated above, the order returning Ext.P2, application is set aside and the learned Sub Judge is directed to receive Ext.P2, application. But I make it clear that the amount will be disbursed to the petitioner only on producing a certificate under Section 197 of the Act. In the meantime, if learned Sub Judge finds that it is a time consuming process it is open to the learned Sub Judge to transfer the amount to the Treasury or a nationalized bank as the case may be after hearing counsel for petitioner also. Original Petition is allowed with the above directions. THOMAS P.JOSEPH, Judge. OP(C) No.62/2010 3 cks