IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH FRIDAY, THE 3RD APRIL 2009 / 13TH CHAITHRA 1931 WP(C).No. 9172 of 2009(N) ------------------------------------ PETITIONER(S): ---------------------- SRI. LAJI JOSEPH, ORMA INDUSTRIES, CHAVARA, KOLLAM. BY ADV. SRI.BECHU KURIAN THOMAS RESPONDENT(S): ------------------------- 1. STATE OF KERALA, REPRESENTED BY SECRETARY, TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 2. COMMISSIONER OF COMMERCIAL TAXES, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. 3. ASSISTANT COMMISSIONER, SPECIAL CIRCLE, KOLLAM. BY GOVERNMENT PLEADER SRI.C.K.GOVINDAN. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03/04/2009,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M.JOSEPH, J. ------------------------------------------------------ W.P.(C) No.9172 of 2009-N ---------------------------------------------- Dated, this the 3rd day of April, 2009 J U D G M E N T The prayers in the writ petition are as follows: “i). issue a writ of certiorari or other appropriate writ, order or direction quashing Ext.P5 and P6 to the extent it has calculated amounts as due from the petitioner under the Amnesty Scheme after adjusting payments made pursuant to Ext.P2 order towards interest. ii). issue a writ of mandamus or other appropriate writ, order or direction directing the 3rd respondent to recalculate the amount due under the Amnesty Scheme from the petitioner after adjusting the amounts paid by the petitioner towards sales tax and deducting interest on penalty. iii) issue a writ in the nature of declaration declaring that Section 23 (3) of KGST does not include penalty impugned under the KGST Act so as to carry interest or iv) issue a writ in the nature of declaration declaring the words “or any other amount assessed or due under the Act” in Section 23 (3) will not include penalty imposed under the Act.” 2. I heard learned counsel for the petitioner and learned Government Pleader. Petitioner applied under the Amnesty Scheme to clear the arrears. Ext.P4 is the application. Ext.P2 is the interim order passed by the Ist WPC No.9172/2009 -2- appellate authority. The order passed by the Ist appellate authority reads as under: “steps for collection of balance tax and surcharge due for the year 2001-2002 are stayed till the disposal of appeal subject to the condition that the appellant pays 50% from the balance tax and surcharge within two weeks from the date of receipt of this order. The appellant should also furnish adequate security for the balance to the satisfaction of the assessing authority. If any of the condition is not fulfilled stay granted will automatically vacate.” 3. The complaint of the petitioner is that instead of adjusting the payment made by the petitioner pursuant to Ext.P2 order towards tax, the adjustment is made against interest. The adjustment was made apparently on the strength of the provisions contained in Sec.55 C of the Kerala General Sales Tax Act (“KGST Act for short”). Sec.55 C of the KGST Act reads as under: 55C.Appropriation of payment:-(1) Where any tax or any other amount due or demanded under the Act is paid by any dealer or other person, the payments so made shall be appropriated first towards interest accrued on such tax or other amount under sub-section (3) of section 23 on such date of payment and the balance available shall be appropriated towards principal outstanding, notwithstanding any request to the contrary by the WPC No.9172/2009 -3- dealer or any person making such payments. (2) Notwithstanding anything contained in sub- section (1) where any dealer or other person has paid any amount towards tax or any other amount and such payment has been set off towards the principal amount prior to the coming into effect of this section, no recomputation of such payment shall be made under sub-section (1). It was brought into force on 1.1.2000. According to the petitioner this is not a case where he made a request within the meaning of Sec.55C for adjusting the amount against tax. Here is a case where the appellate authority directed the payment of money towards tax and surcharge and therefore, the amount has to be adjusted against the tax. Learned Government Pleader on the other hand points out that Sec.55C of the KGST Act is unambiguous and any amount paid after 1.1.2000 is bound to be adjusted against interest request notwithstanding and only the balance can be adjusted against tax. He also relied on the Division Bench decision of this court in Joseph Vs. State of Kerala (2000 (3) KLT 377) wherein this court held as follows: WPC No.9172/2009 -4- “The learned Single Judge also held that the appellant cannot insist on appropriation of the amount paid first towards the kist amount due and not towards the interest due on the kist amount. It is the entitlement of every creditor to appropriate payments made first towards the liability for interest and then only towards the principal due. The appellant and others have not made available any material before this court to show that they had made the payments by insisting that it should be first appropriated towards the kist amount. The fact that in the interim order the appellant and others were directed to pay 50% of the kist amount due as a condition for stay does not amount to a direction that the payments made must be credited towards the kist amount first and not towards the interest due. The appellant and others got the right for the abkari year 1981-82 after the above amendment had come into effect. It was in the face of this statutory rule and with eyes open that the appellant and others bid the right to vend arrack in the shops concerned. They defaulted in payment of the kist due. The appellant and others cannot be heard to contend that payments made by them pursuant to interim orders of the Supreme Court or of this court while they were trying to get out of their obligation to pay the kist should first be appropriated towards the kist amount due in the face of R.6 (25) of the Abkari Rules. 4. Of course, learned counsel for the petitioner Sri.Bechu Kurian Thomas made an attempt to distinguish the Division Bench decision and submitted that there is no provision akin to Sec.55C in the Abkari Act and that it is WPC No.9172/2009 -5- unique and in a situation where there is a direction by the Tribunal or court, it cannot permit adjustment against tax when interest is outstanding. I do not see any merit in the contention of the petitioner. The Section is unambiguous. Another way of looking is that when armed with the order of the authority the petitioner makes payment, impliedly he also makes a request that it may be adjusted towards tax. Therefore, it is not as if there is no request by him for adjusting the amount against tax. In that sense it cannot be said that there is merit in the contention of the petitioner. Also it is not open to make any adjustment contrary to the mandate of the statute. In such circumstances, the petitioner is not entitled for the relief. The writ petition fails, and it is dismissed. (K.M.JOSEPH) JUDGE. MS