The petitioners herein with earnest desire to have a dwelling place, purchased a small extent of 1.97 cents of land with a single storied building thereon from the respondents 5 & 6, as per Ext.P1 'Sale Deed' dated 03.07.2007. The petitioners were residing in the building accordingly, also satisfying the tax in respect of the property concerned. While so, proceedings were taken by the 1st respondent under the R.R. Act in the course of realisation of the amount stated as due from respondents 5 & 6 and Ext.P2 came to be passed on 15.09.2010, whereby, Ext.P1 'Sale Deed' was nullified by virtue of the provisions under Section 44(2) of the R.R. Act. The petitioners challenged the said proceedings by filing revision petition before the 2nd respondent, which came to be rejected as per Ext.P3 order dated 11.06.2013. The petitioners took up the matter further, by approaching the 3rd respondent. It also did not turn to be fruitful and the same was rejected as per Ext.P5 order dated 11.02.2014, which in turn is under challenge in this writ petition.
2. The specific case of the petitioners is that they are the bonafide purchasers, who were never aware of the deeds and misdeeds of the respondents 5 & 6. However, on coming across the liability to be cleared by respondents 5 & 6 towards penalty, which was stated as the only liability at that point of time, the petitioners sought to clear the same by availing the benefit of 'Amnesty Scheme'. Accordingly Ext.P4(a) application was submitted on 21.12.2013, which was considered and sanctioned by the competent authority vide Ext.P4(b) order dated 27.12.2013. The due amount was satisfied by the petitioner accordingly, as evident from Ext.P4(c), a photocopy of the D.D. No.150525 dated 30.12.2013. In spite of satisfaction of the due amount, the 2nd revision pending consideration before the Government was not properly considered and the impugned orders were not intercepted, restoring Ext.P1 'Sale Deed', while Ext.P5 order was passed by the Government on 11.02.2014. This made the petitioner to approach this Court by way of the present writ petition.
3. The 3rd respondent has filed a counter affidavit dated 26.08.2014 and an additional counter affidavit has filed by the 4th respondent dated 14.11.2014.
4. The learned counsel for the petitioners submits as per the additional counter affidavit now filed before this Court that, some additional liability is sought to be realised with reference to Ext.R4(a)(b) orders dated 30.03.2012. It is stated that these orders were never in existence at the time of granting permission to settle the liability by way of Ext.P4(c) or at the time of executing Ext.P1 'Sale Deed' in the year 2007. The learned counsel points out that the said orders were passed only on the last day for finalising the assessment under Section 17(D) of the KGST Act, which was on '31.03.2012', as per the relevant Finance Act. It is also pointed out that, no such case was ever there for the 4th respondent when 'argument note' was submitted before the 2nd respondent in the first round of revision or before the 3rd respondent/Government in the second round of revision. Reliance is also sought to be placed on Section 44(2) of the R.R. Act, which stipulates that, it can be pressed into service only when a proper demand is raised on the defaulter. In the instant case, no such demand was raised in respect of Exts.R4(a)&(b) orders passed on 30.03.2012 and no such proceedings were pending, which barred the way of the respondents 4 & 5.
5. The learned Government Pleader submits in response to the said submission that the idea of understanding of the petitioners is wrong and misconceived. It is sated that Ext.R4(a)& (b) orders were passed only on 30.03.2012, which pertain to the assessment years 2003-04, 2004-05. It is pointed out that the petitioners were never entitled to have filed any application for the benefit of 'Amnesty Scheme', as he was not an assessee at any point of time. The competent authority was given to understand that, the only existing liability was in respect of the 'penalty' and no reference was made to the 'tax liability' or 'interest' payable in respect of the concerned assessment years. Ext.P4 is the application filed by the petitioner in this regard wherein, the amounts due under 'tax' and 'interest' have been shown as 'Nil' in the concerned column. The said application is dated 21.12.2013 ie, very much after passing Ext.R4(a) and R4(b) orders, which were finalised after serving notice to the defaulter in accordance with law. Since the said application for 'Amnesty' benefit was submitted by the petitioner, stepping into the shoes of the assessee (which alone could be the proper course), it has to be presumed that both the assessee/defaulter as well as the petitioners were aware of the actual proceedings and that there was clear suppression in this regard, leading to Ext.R4(b) order stipulating the liability to be cleared under the 'Amnesty Scheme'. This being the position, the said application or the order passed therein or satisfaction of the amount under the said Scheme, cannot have any bearing or significance, in so far as the issue involved in this case is concerned.
6. The learned Government Pleader also points out that the proceedings under the taxation stand on a different footing than normal proceedings under the R.R. Act by virtue of the Mandate of Section 26(A) of the KGST Act, which reads as follows:
“26A. Certain transfers to be void:- (1) Where, during the pendency of any proceedings under this Act or after the completion thereof, any assessee creates a charge on, or parts with the possession (by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever), of any of his assets in favour of any person, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the assessee under this Act.”
7. The taxable event is with reference to the sale or purchase and as such, passing of the assessment order or issuance of the demand notice is not having much relevance. This has been made clear by a Division Bench of this Court in the decision in Noushad Abbas and Others V. Commissioner of commercial Taxes, Tvm and Others (2013 (3) KHC 589 (DB)).
8. In the above circumstances, this Court finds that this is not a fit case to call for interference invoking the discretionary jurisdiction under Article 226 of the Constitution of India. The writ petition fails and it is dismissed accordingly.
9. However, considering the very small extent of the property concerned and the plight of the petitioners who sought to save the property even by availing the benefit of 'Amnesty Scheme' they could be given an opportunity to save the property, if they volunteer to satisfy the market value of the property, to be fixed by the Revenue Authorities. The petitioners are set at liberty to file an application before the 1st respondent within one month from the date receipt of a copy of the judgment, upon which the same shall be considered and appropriate orders shall be passed after hearing the petitioners, as expeditiously as possible. The amount paid by the petitioners vide Ext.P4(c) pursuant to Ext.P4(b) order passed on Ext.P4(a) application shall be given credit to and only the balance is to be recovered from the petitioner. Necessary entries shall be made with regard to the alleged satisfaction of the liability and it will be open for the respondents to proceed against the defaulters for recovering the penalty amount as well.
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P.R. RAMACHANDRA MENON, JUDGE.
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