IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN WEDNESDAY, THE 19TH MARCH 2008 / 29TH PHALGUNA 1929 OP.No. 7506 of 2001(R) -------------------------------- PETITIONER: ------------------- K. RAVIKUMAR, S/O. K. KUMARAN, GANDHI SEVA SADANAM, PERUR AMSOM AND DESOM, OTTAPALAM TALUK, PALAKKAD DISTRICT. BY ADV. SRI.SANTHEEP ANKARATH. RESPONDENT: ---------------------- 1. STATE OF KERALA, REPRESENTED BY DISTRICT COLLECTOR, PALAKKAD. 2. TAHSILDAR (REVENUE RECOVERY), PALAKKAD,TALUK OFFICE, PALAKKAD, PALAKKAD TALUK. 3. THE SALES TAX OFFICER, SALES TAX OFFICE, WADAKKANCHERY. BY GOVERNMENT PLEADER SRI. VINOD CHANDRAN. THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 19/03/2008,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON C.M.P. NO. 12306/2001 IN O.P. NO. 7506/2001-R DISMISSED 19/03/2008. SD/- P.R.RAMAN, JUDGE. APPENDIX PETITIONER'S EXHIBITS : EXT.P.1: COPY OF THE DEMAND NOTICE DTD. 30/10/2000. EXT.P.2: COPY OF THE DEMAND NOTICE DTD. 20/02/2001. EXT.P.3: COPY OF THE APPEAL FILED BY THE PETITIONER DTD. 18/11/2000. RESPONDENT'S EXHIBITS: NIL. //TRUE COPY// prv. P.R.RAMAN, J. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ O.P.No.7506 of 2001-R ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Dated this the 19th day of March, 2008 J U D G M E N T The petitioner challenges the revenue recovery proceedings initiated against him vide Exts.P1 and P2. According to him, he was a Director of a private limited company by name Prerana Engineering Enterprises. The company was given an exemption from payment of sales tax for a period of five years. Due to heavy loss, the company was wound up and, according to the petitioner, the company was not functioning after 1987. Later, in 2000, the petitioner was served with notice under the Revenue Recovery Act demanding payment of sales tax arrears for the year 1985-86 and 1988-89. According to the petitioner, liability of the shareholder is limited to his shares as per the provision of the Companies Act and a Director of the private limited company against recovery proceedings could be initiated only by virtue of Section 26C of the Kerala General Sales Tax Act, inserted later in the year 1999. The liability, admittedly, is of the company which was wound up and that too for a period prior to introduction of Section 26C of the K.G.S.T Act. It is on those premises that the writ petition is filed. O.P.No.7506/2001-R -: 2 :- 2. I have heard both sides. It is not necessary at this stage to go into the question as to the ultimate liability of the petitioner if any. However, it is said that before issuing the revenue recovery demand, no adjudication, whatsoever, was made after hearing the petitioner. In the circumstances, without adjudication of the question involved and before serving a demand, based on such adjudication, straight-a-way revenue recovery proceedings could not have been initiated. On that short ground, the revenue recovery proceedings initiated as per Exts.P1 and P2 are quashed. In case the authority thinks the petitioner is otherwise liable, it is open to them to issue notice, give him an opportunity of being heard in the matter and pass an order. In case such an order is adverse to the petitioner, it will be open to him to challenge the same in accordance with law. Leaving open all such contentions, the original petition is allowed. P.R.RAMAN, Judge ms O.P.No.7506/2001-R -: 3 :- P.R.RAMAN, J. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ O.P.No.7506 of 2001-R ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ J U D G M E N T 19th March, 2008